Approaching global markets

Question 1

Things to consider:

Answer 1

• which international market?
• is the chosen market suitable for entry?
• when is the best time to enter and how big should they enter?
• which market entry strategy should they use?
• level of adaption and local infrastructure?

Question 2

International business

Answer 2

• exporting and importing

Question 3

Indirect exporting

Answer 3

• selling products to a local company that resells those products in foreign markets

Question 4

Cooperative exporting

Answer 4

Partnering with another company which could be local foreign in order to make use of their distribution networks to export goods

Question 5

Direct exporting

Answer 5

a company set up its own distribution network to export goods to foreign markets which works well for large corporations

Question 6

Sourcing

Answer 6

• out sourcing production labour to foreign markets because it is cheaper

Question 7

Licensing

Answer 7

• branding strategy with the licensor office and property rights to licenses in exchange for royalty fees
• allows the licensee to navigator around in Port barriers attain access to new markets

Question 8

Franchising

Answer 8

Franchise gives rights to aspects of the business to a franchisee in exchange for royalty fees and other fees. for example, trademark symbol business models
- main benefit is to maximise existing winning business formula with minimum investment needed

Question 9

Joint ventures

Answer 9

A single country entry strategy with partners which could be local foreign share ownership of a nearly created business entity
- viable way for entering foreign market specially emerging markets

Question 10

Strategic alliances

Answer 10

A form of partnership between two or more organisations to achieve strategically beneficial goals that are mutually beneficial

Question 11

Foreign direct investment

Answer 11

a stake in a company or project by a foreign entity
- most risky
and expensive entry strategy
- can be done through acquisitions and mergers

Question 12

Why use acquisitions and mergers?

Answer 12

• rapid access to new markets
• Instant access to distribution outlets

Question 13

Risks with acquisition and merges

Answer 13

• differences in corporate culture
• maybe blocked in countries where there are anti-trust relink sadly to anti-competitive behaviour

Question 14

Reasons for exiting global markets

Answer 14

• Business is experiencing sustained losses
• volatility of the market
• premature entry entry was not properly planned
• ethical reasons= compliance with business/home country policies
• intense competition so cost rise while profits fall
• resource reallocation/scarcity

Question 15

Risks of exiting a global market

Answer 15

• fixed cost of exit
• disposition of assets
• Signal to other markets or competitors
• Loss of long-term opportunities

Question 16

What can we do before exiting?

Answer 16

• contemplate and assess options in order to try salvage the foreign business
• incremental exits can help to reduce cost of and reduce impact on the reputation or brand image
• try to migrate customers to possibly an online space