The theme of my presentation is “Overseas Market Entry Methods”
In this case I would like to tell you about :
1) Scheme of the Methods;
2) Exporting;
3) Joint Venture;
4) Direct Investment;
5) Advantages and Disadvantages
First method includes:
1)Direct Export - the organization produces their product in their home market and then sells them to customers overseas
2)Indirect Export - the organizations sells their product to a third party who then sells it on within the foreign market
Another less risky market entry method is licensing. Here the Licensor will grant an organization in the foreign market a license to produce the product, use the brand name etc in return that they will receive a royalty payment. ( ex. Coca-Cola)
Another of form on market entry in an overseas market which involves the exchange of ideas is contracting. The manufacturer of the product will contract out the production of the product to another organization to produce the product on their behalf. Clearly contracting out saves the organization exporting to the foreign market. (example: hotel chain “Hilton”)
The ultimate decision to sell abroad is the decision to establish a manufacturing plant in the host country. The government of the host country may give the organization some form of tax advantage because they wish to attract inward investment to help create employment for their economy.
Joint Venture Ownership is a cooperation of foreign and local investors of the capital in order to create a local business that they own and manage jointly.
And the third method is Direct Investment. It is the direct ownership of facilities in the target country. It involves the transfer of resources including capital, technology, and personnel. Direct investment may be made through the acquisition of an existing entity or the establishment of a new enterprise.
And the end I would like to focus your attention on the chart. You can see advantages and disadvantages of each method.
Thank you for attention, if you have questions, you are welcome.