marketentrystrategies(also called international entry modes).pptx

8/17/2019 marketentrystrategies(Also called international entry modes).pptx

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k e t r y

r a t e g i e s


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• VINEET SANSARE - 05

• ANCHAL BHAGLAL -03

• SAJID GADANE - !

• J"#$ BAB$ - 55

• NITIN S% - 0&

)y*

• IMRAN +HAN - !5

• NILA$ 'ANCHAL - ,

•S"NIA SHARMA - &

• G.R'REET SINGH - 53

• SHASHI+ANT B"MMA -33


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I N T R "

• When an organization has made a decision to enter an overseas

market, there are a variety of options open to it.

• These options vary with cost, risk & the degree of control which

can be exercised over them.

• One of the most important strategic decisions in international

business is the mode of entering the foreign market.


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A market entry strategy is te

12anne( et4( 4 (e2i6eringg44(s 4r ser6i7es t4 atarget arket an( (istri)8ting

te tere% 9en i14rting 4re:14rting ser6i7es; it reers t4esta)2ising an( anaging74ntra7ts in a 4reign 748ntry%


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B A S I C

I S S . E S n organization willing to !go international"

faces # ma$or issues.

• Marketing % which countries, which

segments, how to manage, how to enter,

with what information.

• Sourcing % whether to obtain products,

make or buy.

• Investment & Control % oint 'enture,

global partner, ac(uisition.


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STRATAGIES

• )*+OT-/

• 0-1)2-/

• 314-2-/

• O-T ')T5-/

• 1OT1T 6531T5-/

• 6)/)2 & 1752-T-O2

• 35008 OW)9 6531T5-/ 31-0-T-)2

• 1O5T) T9)

• T5:)8 1OT1T2

• T4-9 1O5T8 0O1T-O


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E = ' " R T

I N G•

)xporting is the most traditional and well establishedform of operating in foreign markets.

• )xporting can be defined as the marketing of goods

produced in one country into another.

• Whilst no direct manufacturing is re(uired in an

overseas country, significant investments in marketing

are re(uired.

• The tendency may be not to obtain as much detailed

marketing information as compared to manufacturing in

marketing country.


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• Those firms who are aggressive have clearly defined plans and

strategy, including product, price, promotion, distribution and

research elements.

• -n countries like Tanzania and ;ambia, which have embarked on

structural ad$ustment programs, organizations are being

encouraged to export, motivated by foreign exchange earnings

potential, saturated domestic markets, growth and expansionob$ectives, and the need to repay debts incurred by the borrowings

to finance the programs.

• The type of export response is dependent on how the pressures areperceived by the decision maker.


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A ( 6 a n t a

g e s 4

5

E : 1 4 r t i n

gThe advantages of exporting are <

• 6anufacturing is home based thus, it

is less risky than overseas based

• /ives an opportunity to =learn=overseas markets before investing in

bricks and mortar

• educes the potential risks of

operating overseas.


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D i s a ( 6 a

n t a g e

s

4 5 E :

1 4 r t i n g Te (isa(6antage isain2y tat 4ne 7an

)e at te >er7y> 446erseas agents an(s4 te 2a7k 4 74ntr42as t4 )e ?eige(

against tea(6antages%


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# R A N C H

I S I N G

• Players : Franchisor & Franchisee.

• -n terms of distribution, the franchisor is asupplier who allows an operator, or a

franchisee, to use the supplier>s trademark

and distribute the supplier>s goods.

• -n return, the operator pays the supplier afee.

• Thirty three countries, including the 5nited

2tates, and ustralia, have laws that

regulate franchising.

• Franchising is the practice of using

another firm>s successful business model.


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• 3or the franchisor, the franchise is an alternative to

building ?1hain 2tores@ to distribute goods thatavoids the investments and liability of a chain.

•The franchisor>s success depends on the success ofthe franchisees.

• The franchisee is said to have a greater incentive

than a direct employee because he or she has adirect stake in the business.


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E : a 3 1 2 e s


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A D

V A N T

A G E S

• #ree(4 4

E124yent

• 'r46en 1r4(87ts @Ser6i7es

•'r46en Tra(e Mark

• Re(87e( Risk 4#ai28re


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L I C E N S I N

G Li7ensing is (ene( as

>te et4( 4 4reign41erati4n ?ere)y a rin 4ne 748ntry agrees t41erit a 741any in

an4ter 748ntry t4 8sete an8a7t8ring;1r47essing; tra(eark;

kn4?-4? 4r s4e 4terski22 1r46i(e( )y te2i7ens4r>%


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• 0icensing involves little expense and involvement.

• The only cost is signing the agreement and policingits implementation.

• -t is (uite similar to the =franchise= operation.

• 1oca 1ola is an excellent example of licensing.• -n ;imbabwe, 5nited Aottlers have the license to

make 1oke.


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A ( 6 a n t a g

e s 4 5

L i 7 e n

s i n g%

• /ood way to start in foreign

operations and open the door to

low risk manufacturingrelationships

• 0inkage of parent and receiving

partner interests means both getmost out of marketing effort

• 1apital not tied up in foreign

operation and

• Options to buy into partner existor provision to take royalties in

stock


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D i s a ( 6 a

n t a g

e s

4 5 L i 7 e n s

i n g%

• 0imited form of participation B to length ofagreement, specific product, process or

trademark.

• +otential returns from marketing and

manufacturing may be lost.

• +artner develops knowBhow and so

license is short.

• 0icensees become competitors B

overcome by having cross technology

transfer deals and

•e(uires considerable fact finding,planning, investigation and interpretation.

N


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J " I N

V E N

T . R E

S• oint ventures can be defined as

=an enterprise in which two ormore investors share ownership and

control over property rights and

operation.=

• -t is a very common strategy of

entering the foreign market.


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• ny form of association which implies collaboration for

more than a transitory period is a $oint venture.

• $oint venture may be brought about by a foreign investor

showing an interest in local company,

• local firm ac(uiring an interest in an existing foreign firm

or

• Ay both the foreign and local entrepreneurs $ointly forming

a new enterprise.


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A ( 6 a n t a

g e s

• 2haring of -2:.

• oint financial strength.

• 6ay be only means of entry insome countries.

D i s a (

6 a n t a g

e s • +artners do not have full control

of management.

• 6ay be impossible to recover

capital if need be.• +artners may have different

views on expected benefits.


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E : a 3 1 2 e s

E


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C " .

N T E

T R A

D E•

0argest indirect method of exportingis countertrade.

• 1ompetitive intensity means more

and more investment in marketing.

• -n this situation the organization

may expand operations by

operating in markets wherecompetition is less intense but

currency based exchange is not

possible.


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• lso, countries may wish to trade in spite of the degree of

competition, but currency again is a problem.

• 1ountertrade can also be used to stimulate home

industries or where raw materials are in short supply.

• -t can, also, give a basis for reciprocal trade.

• )stimates vary, but countertrade accounts for about CDB

#DE of world trade, involving some FD nations and

between 52 GHDDBHID billion in value.


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• ADVANTAGES*

-ts main attraction is that it can give a firm a way to financeexport when other means are not available.

• DISADVANTAGES*o 'ariety is low so marketing is limited

o 9ifficult to set prices and service (uality

o -nconsistency of delivery and specification,

o 9ifficult to revert to currency trading B so (uality may decline

further and therefore product is harder to market.


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T . R N

+ E $

C " N T R A C

T S• T8rnkey 74ntra7ts are

744n in internati4na2)8siness in te s8112y;ere7ti4n @ 74issi4ning 412ants; as in te 7ase 4i2reneries; stee2 i22s;7eent @ erti2ier 12ants

et7%% C4nstr87ti4n 1r4e7ts @ran7ising agreeents%


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• turnkey operation is an agreement by the seller to

supply a buyer with a facility fully e(uipped & ready to be

operated by the buyer, who will be trained by the seller.

• The term is used in fast food franchising when a franchiser

agrees to select a store site, build he store, e(uip it, train

the franchisee & employee.

• 6any turnkey contracts involve governmentJpublic sector

as buyer.

• turnkey contractor may subcontract different

phasesJparts of the pro$ect.


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C " N T R

A C T

M A N . # A C

T . R I N

G

• company doing international

marketing contracts with firms in foreigncountries to manufacture or assemble

the products while retaining the

responsibility of marketing the product.

• This is a common practice in

international business.

• 6any multinationals employ this in

-ndia example< +ark 9avis 4industan

0ever, +onds.


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A ( 6 a n t a g

e s •-t frees the company from risks of

investing in foreign countries.

• -t does not have to commitresource for setting up

production facilities.

• There can be a loss on

manufacturing.

• 0ess control over manufacturing

process.• isk of developing potential

competitors. D i s a ( 6 a

n t a g e

s

$


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T H I R D

C " . N T R $

L " C

A T I " N

• This is sometimes used as an entry

strategy.

• When there is no commercial

transaction between C nations

because of political reasons,

• or when direct transactions

between C nations are difficult &

• if one nation wants to enter other

nation,• then the nation will have to operate

from the third country base.


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• -t may be helpful to take advantage of the friendly trade

relations between the third party & the foreign marketconcerned.

• 2ometimes commercial reasons encourage third country

location.

• )xample< ank *erox found it convenient to enter 522

through its -ndian $oint venture 6odi *erox.


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M E R G E R

S @

A C

. I S I T I " N

S• This strategy is also known as an

expansion strategy.

• 6&s have been imp & powerful

driver of globalization.• Aetween HFKD % CDDD the value of

cross border grew at an average

annual rate of LDE.

• large no. of foreign firms have

entered -ndia through ac(uisition.

• )xample< utomobiles, +harmacy,

banking, telecom etc.


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A ( 6 a n t a

g e s

• In7reasing te arket14?er%

• A78isiti4n 4 Te7n424gy%

• "1ti8 8ti2iati4n 4Res48r7es%

• Miniiati4n 4 Risks%

• Ta: Benets


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D i s a ( 6 a

n t a g e

s

• S4e 4 te 8nits

a78ire( ?482( a6e1r4)2es s87 as 42(12ant; 4)s42etete7n424gy; s8r128s; 4r

(e4ra2ie( 2a)4r%

• Te r ay n4t a6e

te e:1erien7e @e:1ertise t4 anage te8nit taken 46er i it is anentire2y ne? e2(%

marketentrystrategies(also called international entry modes).pptx

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