GLOBAL MARKET ENTRY STRATEGIES Chapter Nine John Wiley & Sons, Inc c 1998

Global Market Entry Strategies Chapter Nine Overview 1. Target Market Selection 2. Choosing the Mode of Entry 3. Exporting 4. Licensing 5. Franchising 6. Contract Manufacturing 7. Wholly Owned Subsidiaries 8. Cross-Border Strategic Alliances John Wiley & Sons, Inc c 1998

Overview John Wiley & Sons, Inc c 1998

1. Target Market Selection Exhibit 9-1 A Logical Flow Model of the Entry Decision Process Exhibit 9-2 Method for Pre-Screening Market Opportunities: Example Exhibit 9-3 Opportunity Matrix for Henkel in Asia Pacific John Wiley & Sons, Inc c 1998

2. Choosing the Mode of Entry Decision Criteria for Mode of Entry Market Size and Growth Risk Government Regulations Competitive Environment Local Infrastructure Exhibit 9-4 Entry Modes and Market Development John Wiley & Sons, Inc c 1998

2. Choosing the Mode of Entry (cont) Company Objectives Need for Control Internal Resources, Assets, and Capabilities Flexibility Mode of Entry Choice : A Transaction Cost Explanation John Wiley & Sons, Inc c 1998

3. Exporting Indirect Exporting Cooperative Exporting Direct Exporting John Wiley & Sons, Inc c 1998

4. Licensing Benefits Caveats John Wiley & Sons, Inc c 1998

5. Franchising Benefits Caveats John Wiley & Sons, Inc c 1998

6. Contract Manufacturing John Wiley & Sons, Inc c 1998

7. Joint Ventures Benefits Caveats Exhibit 9-5 Conflicting Objectives in Chinese Joint Ventures John Wiley & Sons, Inc c 1998

7. Joint Ventures (cont) Drivers Behind Successful International Joint Ventures Pick the Right Partner Establish Clear Objectives from the Beginning Bridge Cultural gaps Top Managerial Commitment and Respect Incremental Approach Works Best John Wiley & Sons, Inc c 1998

8. Wholly Owned Subsidiaries Benefits Caveats Acquisitions (and Mergers) Greenfield Operations John Wiley & Sons, Inc c 1998

9. Cross-Border Strategic Alliances Types of Strategic Alliances Exhibit 9-6 RISC Alliance Groups, Early 1992 Exhibit 9-7 Cross-Border Technology-Based Strategic Alliances The Logic Behind Strategic Alliances Exhibit 9-8 Generic Motives for Strategic Alliances Defense, Catch-up, Remain, Restructure John Wiley & Sons, Inc c 1998

9. Cross-Border Strategic Alliances (cont) Cross-Border Alliances that Succeed Alliances between strong and weak partners seldom work. Autonomy and flexibility Equal ownership John Wiley & Sons, Inc c 1998