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

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

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

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

EXPORTING 5

6 CONTRACTUAL AGREEMENTS

7 WHOLLY-OWNED SUBSIDIARIES

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