INTERNATIONAL MARKETING MANAGEMENT SESSION 6 ALTERNATIVE MODES OF

INTERNATIONAL MARKETING MANAGEMENT SESSION 6: ALTERNATIVE MODES OF MARKET ENTRY 1

EXTERNAL INTERNAL Management Objectives Country Characteristics n n n • Commitment Market size and growth • Risk Management Political and Economic environment Country Selection Strategy Market infrastructure Mode of Entry Strategy n Speed n Sequencing Trade Barriers and Government Regulations n Direct trade barriers n Indirect trade barriers Product Characteristics 2

MODES OF OPERATION Indirect Exports (via agents) EXPORT Co-operative Export (shared) Direct Export (own sales org. ) Licensing - Franchising CONTRACTUAL Contract Manufacturing Agreements Joint Venture/Strategic Alliance WHOLLY-OWNED SUBSIDIARIES Acquisition Greenfield 3

EVALUATING MODES OF OPERATION Based On: n Resource Requirements q Financial q Managerial n Control n Contact Over Operations With End Market n Flexibility q Ability to reallocate resources q Commitment to other organizations 4

EXPORTING 5

CONTRACTUAL AGREEMENTS 6

WHOLLY-OWNED SUBSIDIARIES 7

SUMMARY n Importance of fit with long-run international expansion strategy n Evaluate mode of operation based on control contact with end-market, and flexibility (as well as cost) n Implications can be long-lasting and lock firm in 8