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Chapter 15 - Entry strategy and strategic alliances. After reading this chapter you will be able to: Explain the three basic decisions that firms contemplating foreign expansion must make: which markets to enter, when to enter those markets, and on what scale; compare and contrast the different modes that firms use to enter foreign markets; identify the factors that influence a firm's choice of entry mode;. | International Business 9e By Charles W.L. Hill McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 15 Entry Strategy and Strategic Alliances What Are The Basic Decisions Firms Make When Expanding Globally? Firms expanding internationally must decide Which markets to enter depends on long run profit potential favorable markets are politically stable, have free market systems, have relatively low inflation rates, and have low private sector debt less desirable markets are politically unstable, have mixed or command economies, and have excessive levels of borrowing LO1: Explain the three basic decisions that firms contemplating foreign expansion must make. What Are The Basic Decisions Firms Make When Expanding Globally? When to enter them and on what scale must consider the timing of entry first mover advantages and disadvantages the scale of market entry strategic commitment Which entry mode to use exporting licensing or franchising to a company in the host nation establishing a joint venture with a local company establishing a new wholly owned subsidiary acquiring an established enterprise LO1: Explain the three basic decisions that firms contemplating foreign expansion must make. How Can Firms Enter Foreign Markets? These are six different ways to enter a foreign market Exporting – a common first step for many manufacturing firms later, firms may switch to another mode Turnkey projects - the contractor handles every detail of the project for a foreign client, including the training of operating personnel at completion of the contract, the foreign client is handed the "key" to a plant that is ready for full operation LO2: Compare and contrast the different modes that firms use to enter foreign markets. How Can Firms Enter Foreign Markets? Licensing - a licensor grants the rights to intangible property to the licensee for a specified time period, and in return, receives a royalty fee from the licensee patents, . | International Business 9e By Charles W.L. Hill McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 15 Entry Strategy and Strategic Alliances What Are The Basic Decisions Firms Make When Expanding Globally? Firms expanding internationally must decide Which markets to enter depends on long run profit potential favorable markets are politically stable, have free market systems, have relatively low inflation rates, and have low private sector debt less desirable markets are politically unstable, have mixed or command economies, and have excessive levels of borrowing LO1: Explain the three basic decisions that firms contemplating foreign expansion must make. What Are The Basic Decisions Firms Make When Expanding Globally? When to enter them and on what scale must consider the timing of entry first mover advantages and disadvantages the scale of market entry strategic commitment Which entry mode to use exporting licensing or franchising to a .
