...report on Modes of Entry into Foreign Markets. Sir, It’s been pleasure for me to submit my report on “Modes of Entry into Foreign Market”. This report contains the structure and material as instructed by you. I have tried hard to do my best and fulfill your expectation. The assigned work and the information gathering process involved with it gave me access to the areas, which I didn’t know before. However it is needless to say that, there may be some mistake in my organization, presentation and style. In completing the report I have tried my best in imparting ever available details of the, “Modes of Entry into Foreign Market” avoiding unnecessary amplification of the report. Thanking you, Yours faithfully Md.RazibulMatin ID. No: 801414091 EMBA Program Department of International Business University Of Dhaka. Table of Content SL NO. | TOPIC NAME | PAGE NO | | Letter of Transmittal | 1 | | Executive summary | 3-4 | Chapter-1 | Introduction | | 1.1 | Problem of Modes of Foreign Markets Entry | 5-6 | 1.2 | Rationale for Modes of Foreign Markets Entry | 6 | 1.3 | Scope and Objectives of the study | 6-7 | 1.4 | Methodology of the Study | 7 | 1.5 | Limitation of The Study | 7 | Chapter-2 | Literature Review | 8 | Chapter-3 | Modes of Entry into Foreign Market | | 3.1 | Market entry strategy | 9 | 3.2 | Market Entry Modes | 10 | 3.2.1-3.2.7 | Different Markets Entry Modes | 11-16...
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...“Assess the merits and demerits of international licensing as a mode of entry into new markets” Disney does not have to produce t-shirts, USB sticks and even waffles with Mickey Mouse’s happy face on it. Instead, it can license the right to use its famous character to different companies around the globe and enjoy the hefty royalties, which in 2010 totaled 28.6 billion dollars (Rorie, 2011). Does it then mean that licensing as a mode of entry into foreign markets is the best option available? Not necessarily so. Given a multitude of foreign market entry methods, all of them being used in practice in some contexts, it is crucial to determine under which circumstances licensing will pay off. The decision factors include the specifics of the foreign market; ownership, location and internalization advantages; resources and capabilities; and the general global strategy of a company. This essay will attempt to analyse what kind of environment would be favourable for the introduction of licensing and use this analysis as a context to assess the pros and cons of this mode of foreign market entry. It is useful to start with the detailed definition of the subject matter. According to Daniels, 2003, “under a licensing agreement, a company (the licensor) grants rights to intangible property to another company (the licensee) to use in a specified geographic area for a specified period in exchange for a fee” (called royalty). The “intangible property” might encompass patents, designs...
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...Selection of Market Entry Mode Naveed Hussain Malik (naveed.hm@gmail.com) 770325-3059 Masood Hussain Chudary(zindagi03@hotmail.com) 801014-5855 Supervisor: Eva Wittbom Masters Degree Thesis in Business Administration School of Management Sciences Date of submission Abstract Development in infrastructure limits the communication gap, speedy travel and low cost tariff barriers as well other drivers of globalization have made overseas markets easier to get small firms and gave more opportunities to SME´s internationalize. The market entry mode choice or selections have strong effect the success or failure of the company. For instance an insufficient or wrong entry mode selection can decrease opportunities and limit important choice for the firm and could lead to high financial loss as well as lose control on overseas market. The purpose of research study is to provide a deep and better understanding of the factors those effecting SME´s selection of market entry mode. Research question how can the influence of internal and external factors on the selection of market entry mode. A frame of reference led to the building of summary which in turn became the basis for data collection. Two qualitative case studies for Pakistani SME´s namely socks knitter Pakistan and RK International were undertaken. The main findings shows the clear link between the theories claim to be internal and external factors influencing market entry mode choice between...
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...Technology Mara Malaysia, Shah Alam, 15-17 June 2009, Volume 2, pp. 128-137 Entry Mode Strategies of Malaysian Service Firms: A Resource-Based Approach Mohammadreza Asgari*, Mohd Nazari Ismail**, Syed Zamberi Ahmad*** Faculty of Business and Accountancy, University of Malaya, Kuala Lumpur ABSTRACT The rapid progress in services has attracted scholars to study the behaviour and decisions of service firms. Firms from Malaysia, as a developing country, with a fast growing economy that increasingly relies on services have shown a remarkable expansion into foreign markets, which has resulted in high foreign direct investment (FDI) outward inflows and increasing exports of services. This paper utilizes the resource-based theory, in which the main determinants of the choice of entry mode are organizational variables compared to environmental factors, to explain the choice of entry strategies made by Malaysian service firms and the motives for it. This study aims to develop a framework for the choice of entry mode strategies that has fewer shortages than others, analyze the determinants of entry mode strategy in order to find the similarities and differences existing between firms in the decision-making process for the choice of entry mode, and consider the role of psychic distance in adopting an appropriate strategy in different markets. Suggestions for future research are also presented. Keywords: Entry mode strategy, developing country, Malaysia, service industries, multinational...
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...International Review of Business Research Papers Vol.3 No.1. March 2007, Pp.183 - 196 Entry Modes For International Markets: Case Study Of Huawei, A Chinese Technology Enterprise Donglin Wu* and Fang Zhao** This case study analyses and discusses the internationalization process of Huawei, a leading telecommunication equipment manufacturer in China. Our research aims to explore the special features of the internationalization of Chinese hi-tech firms through a case study and to identify the factors that affect Chinese hi-tech firms’ international entry mode decision. In this paper, several foreign market entry modes were discussed. Issues of why and how to take into account the factors of industrial characteristics, environmental factors, firm factors, and moderators for internationalization and how to employ different entry modes in different host markets are discussed and illustrated based on this case study. It is found that industrial characteristics and home country’s technological reputation affect to a great extent the internationalization path of the hi-tech firm studied. The research also shows that in terms of hi-tech enterprises’ internationalization, the factors such as international experience and firm size are not as important to traditional manufacturers as to hi-tech enterprises. Field of Research: Management 1. Introduction After two decades’ development, many Chinese technology enterprises stride their first step in internationalization. Among them...
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...The objective in this article is to discuss on the effective modes of entry for businesses that is planning to venture into international market. The entry modes methods discussed are aimed to help businesses to formulate an effective international business strategy and to position themselves to be successfully established in the global market. The central theory introduced in this article is developed based on a comprehensive framework of the entry modes choices. These modes of choices would determine the success factor of the international business strategy, and to choose these choices there are several important factors to be considered. These factors include situational firm factors, foreign environment review, and moderating factors that would directly influence the firm’s desired mode of choice. Referring to Appendix A is the mode choice of framework by Driscoll that depicts the whole concept discussed. To briefly illustrate, the firm would need to evaluate the two situational factors that would directly affect its desired level of different modes of characteristics. Subsequent from the selected desired modes, the firm would also need to determine the potential moderating influences, which would affect the desired mode. Thus, reassessment based on the moderators would take place to determine the most effective modes of entry. By selecting the right mode of entry, the firm would incorporate an effective business strategy for its international business plans. The...
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...Market Entry Mode Strategies – A study of Bangladesh Mobile Telecommunication Market for Foreign Companies Authors: Debashish Barua Examiner: Prof. Anders Pehrsson Marketing, Master Programme Tutor: Prof. Mosad Zineldin Mahmudur Rahman Chowdhury Subject: Master Thesis, 4FE02E Marketing, Master Programme Level and Semester: Master, Spring, 2014 i Acknowledgement We express our gratitude to those people who helped us a lot in conducting the research work successfully. Their cooperation helped us to write a good thesis paper. We are grateful to our tutor Prof. Mosad Zineldin and examiner Prof. Anders Pehrsson who have provided valuable critiques, encouraged and guided us to write the thesis paper in right direction. Moreover, we would like to thank the three mobile telecom companies which have provided valuable information in conducting the research work. Finally, we would like to thank to our family members and friends for their motivational support throughout the study. Linnaeus University, Växjö School of Business and Economics June 2014 Debashish Barua Mahmudur Rahman Chowdhury ii Abstract Title: Market Entry Mode Strategies – A study of Bangladesh Mobile Telecommunication Market for Foreign Companies. Background: Now-a-days, the forces of globalization derive firms to go to international market. When a firm thinks to expand its business outside of the home market, it needs to explore the form of operation through which it will enter into the foreign market. International...
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...EFFECTS ON ENTRY MODE DECISIONS OF MULTINATIONAL MANUFACTURING ENTERPRISES: A QUALITATIVE STUDY IDENTIFYING ISSUES FOR FURTHER RESEARCH IN THE AREA OF COUNTRY CONDITIONS AND THEIR IMPACT ON ENTRY MODE ALEX KOUZNETSOV, Melbourne Institute of Technology ASHELEY JONES, Melbourne Institute of Technology This study examines entry modes employed by foreign multinational manufacturing enterprises (MMEs) when entering Russia. This exploratory study focuses on country-specific conditions associated with the chosen entry mode - an important component in the consideration of overall entry strategy. Information from field studies representing 18 manufacturers – 10 directly manufacturing in Russia and 8 selling their products in Russia via representative/sales offices – was obtained by means of personal interviews with senior management in Moscow and constituted the primary qualitative data. Research questions are posed for further examination of conditions in Russia and the effects of such conditions on the entry mode decisions of MMEs. The study finds economic conditions to be the only important determinant of entry modes for large multinational manufacturing companies investing in Russia with other country factors playing no role in their choices. INTRODUCTION With the expansion of global business activity, the ability to analyze the key characteristics of potential host countries becomes increasingly important. The key to successful international market entry is an understanding...
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...Because of globalization in the world’s markets, a multinational financial manager is more likely than a domestic financial manager to specialize in finance to the exclusion of other fields of business. ANS: False. The multinational financial manager must be well versed in each of the business disciplines in which the MNC is involved. 3. The domestic financial manager must be knowledgeable in several areas within finance, whereas the multinational financial manager usually specializes in a single area, such as corporate finance, investments, or financial markets. ANS: False. The multinational financial manager is likely to require knowledge of several fields within finance. 4. The investment opportunity set is the set of investments available to the corporation; that is, the set from which the company must select. ANS: True. 5. Types of market efficiency used to describe the performance of financial markets are allocational, operational, and transactional efficiency. ANS: False. Three types of market efficiency are allocational, operational, and informational. 6. An informationally efficient market is one with abundant information. ANS: False. It is a market in which prices fully reflect available information. 7. Allocational efficiency refers to how efficiently a market channels capital toward its most productive uses. ANS: True. 8. Allocational efficiency refers to whether a market allocates capital to those investments deemed...
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...one human group from another... Culture, in this sense, includes systems of values; and values are among the building blocks of culture’. The cultural dimensions measure the cultural distance between a home and a host country. The dimensions that influence entry mode decision making are ‘power distance’ and ‘uncertainty avoidance’. The firm and country characteristics influence entry mode decision making and they are divided in 5 groups: Internal factors, product, desired more characteristics, transaction-specific factors and external factors. While entry modes can be distinguished in 3 groups of which this study only focuses on contractual agreements and fully owned subsidiaries. The conclusion drawn from this literature review states that internal factors such as firm size and international experience determine the resource commitment of a firm. High resource commitments are needed to establish fully owned subsidiaries. ‘ Control’ is a factor which is part of the desired mode characteristics and is influenced directly by cultural distance. A high cultural distance between the home and host country, requires a high level of control by the parent firm on their foreign activities, which results in a hierarchical entry mode. The academic recommendations point out that future research should be devoted to industry characteristics...
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...The Strategic Decision of Foreign Market Entry by Service Firms Name Institution Table of Contents Abstract 4 Chapter One: Introduction 5 Research Question 9 CHAPTER 2 – Literature review 10 Literature review 10 Definition of Terms 11 Motives for Foreign Market Entry 11 External Forces 11 Internal Forces 13 Entry Modes 16 CHAPTER 3 – Methodology 17 The Research approach and hypothesis 18 Sampling 19 Procedure 21 Focus groups 21 Interviews 22 Analysis plan 22 Validity and reliability 24 Assumptions 25 Scope and Limitations 27 Chapter 5: Conclusion and Recommendations 32 References 36 Summary This research aims to study and clearly express why firms joins foreign markets. In addition, the paper also shows the whole process of entry. This is whereby firms have to make strategies before they join these foreign markets. The paper shows how firms can survive after they finally make this decision. To expound on this, it is of great importance that firms regularly explore and join foreign markets. This helps them with significant number of benefits, among them coping with stiff competition. In addition, firms gain more knowledge based on these strategies on the survival means in the new markets. This makes it important for firms to speculate on how to make entries to foreign markets. In addition, the paper expounds further on this whole procedure. Abstract This research paper aims to find out more about the operations of a service firm. This mostly...
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...JBR Paper June 27, 1999 DIVERSIFICATION AND MARKET ENTRY CHOICES IN THE CONTEXT OF FOREIGN DIRECT INVESTMENT Ram Mudambi University of Reading and Case Western Reserve University Susan McDowell Mudambi John Carroll University Address for correspondence: Dr. Susan McDowell Mudambi Department of Management, Marketing and Logistics Boler School of Business John Carroll University University Heights OH 44118 Phone: FAX: Email: (216) 397-3094 (216) 397-1728 smudambi@jcu.edu DIVERSIFICATION AND MARKET ENTRY CHOICES IN THE CONTEXT OF FOREIGN DIRECT INVESTMENT Abstract Multinational enterprises consider many factors when making decisions in the context of foreign direct investment (FDI). In deciding what to produce, the multinational enterprise (MNE) must decide whether to diversify or to concentration on its main line of business. This paper offers insights into influences on this choice, and identifies a number of conditions under which diversification is more likely to be chosen. Factors affecting the foreign entry mode decision are also analyzed. The international business literature has generally treated these strategic choices as independent. This paper introduces a more realistic selection model, in which the diversification choice and the entry mode choice are made sequentially and are therefore related. The model is tested using a data set of FDI into the United Kingdom by MNEs in engineering and related industries. The analysis indicates a strong relationship...
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...Ulset Title: International Modes of Entry Subtitle: The Case of Disney By, Carlos Gonzalez Hernandez This thesis was written as a part of the master program at NHH. Neither the institution, the supervisor, nor the censors are -through the approval of this thesis- responsible for neither the theories and methods used, nor results and conclusions drawn in this work. International Modes of Entry: The Case of Disney 1 Abstract The case of Disney’s theme parks represents an opportunity to test major internationalisation theories in a setting of large investments with little chance for reversal of commitments. The purpose of the research is to study the benefit of different entry modes dependent on Disney’s Theme Parks value-generating resources and capabilities while conditioned to certain local industrial and institutional conditions in foreign markets. Five major theories and frameworks were used to analyze all four Disney’s ventures abroad. This resulted in 20 individual hypotheses analyzed. Results indicate that Disney followed a predictable internationalisation process in the cases of Tokyo, Hong Kong and Shanghai, but that it went off-path in the Paris one. In successful cases Disney followed a cautious approach, involving local partners to transfer and adapt the “Disney Experience”. In the case of Paris the company decided to enter the market alone, which neglected the unique needs of the local market. Page | 2 International Modes of Entry: The Case of Disney Table...
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...Introduction Marketing entry strategies can be divided into three part: Entry objective, Timing of Entry and Mode of Entry (Lasserre 2008, p. 210). Entry objective always address question about “WHY”. Timing Entry asks about “WHEN” and lastly my main topic of the assignment is Entry Mode- “HOW”. Major Decision Criteria There some external and internal factor that will affect the choice of market entry strategies by Company. Koch (2001) contends that External factor comprises of Market Size/Growth/Barrier, Risk (Political, Operational, Economic and Competitive), Local Government Regulation/Requirement, Competitive Environment and Local Infrastructure. Internal factor include Entry Objective (Market Development, Resources Access, Learning, Co-ordination), Need for control, Internal Resource and Capabilities, and Cost-Benefit analysis (Lasserre 2008).These both factors can be identifying through some framework like Porter Country Diamond (Porter, 1990), Country Risk, Market & Industry Attractiveness and PEST. Timing of entry comprises four phase: Premature phase, Window phase, Competitive growth phase and Mature phase. The wrong choice of timing can have a great impact of a company on Sales, Performance, Brand Awareness and etc. According to Frynas& Mellahi (2011, p. 164), the Entry Mode can be use by MNE(Multinational Enterprise) grouped into five main categories, that are Export, Licensing, Franchising, Joint Venture and Wholly Owned Subsidiaries- Greenfield...
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...International business or Global marketing is growing at a fast rate and there are more than 180 nations-sates in the world with different market and profitable potential. However for an organization to earn sufficient income in the global market it needs to know the right time and form of market entry mode whilst entering International market (Hill, 2003). Therefore this essay will focus and assess the need for an organisation to use a range of modes of entry while entering the international market. In due course it will give an overview on International marketing literature review, views on variety of entry modes, entry selection criteria, examples based on cased studies and conclusion. General Understanding of International marketing refers to marketing of goods and services from one country to another. Producing and marketing of products in more than one country is also termed as international or multinational marketing. But according to Mc Auley (2001) International marketing can be defined quite simply as “the performance of business activities that direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit” much similar to domestic marketing. However Kahler (1983) argues and identifies that “International marketing differs from domestic marketing for one basic reason: it involves doing business with individuals, firms, organizations, and/or government entities in other countries”. The author further argues that the difference...
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