FOREIGN MARKET ENTRY

STRATEGIES

ACQUISITION Domestic company merge with foreign

company to enter Int’l market Domestic company may acquire /

purchase foreign company Example: Nokia (fin) – siemens

(germany) data n/w & telecommunication division

Advantages:-immediate grab of market share-less time & quick to execute

Disadvantages:-tedious task (bankers, lawyers from both countries)

STRATEGIC ALLIANCE This strategy seeks to enhance the long

term competitive advantage of the firm by forming alliance with its competitors, existing or potential in critical areas, instead of competing with each other.

The goals are to leverage critical capabilities increase the flow of innovations and increase flexibility in responding to the market & technological changes.

3 DISTINGUISHING CHARACTERISTICS: They are frequently between firms in

industrialized nations. The focus is often only creating new

products and/or technologies rather than distributing existing ones

They are often only created for short term durations.

FREE TRADE ZONES is a specific class of special economic zone. They

are a geographic area where goods may be landed, handled, manufactured or reconfigured, and re-exported without the intervention of the customs authorities.

Free-trade zones are organized around major seaports, international airports, and national frontiers—areas with many geographic advantages for trade. It is a region where a group of countries has agreed to reduce or eliminate trade barriers.

Free trade zones can also be defined as labor-intensive manufacturing centers that involve the import of raw materials or components and the export of factory product.