How would you define the business that AOL is in? What are the key factors for success (KSFs) in that business? 06 国贸 1 班 何启芬

AOL means American on line. AOL is a network as yahoo. Its business is involved in the politics, entertainment, civilization,finance, society,sports and weather. You can find the latest news all around the world through AOL.

It can also provide free ,AOL Moviefone,ICQ,AOL Instant Messager, Spinner,Swinamp and so on. It will be very useful to us in our daily life. At the same time,its business expends to the cable television fields including CNN, TBS, HBO, Cinemax, Cartoon Network, TNT, WB.

The key factors for success in this business are that the company should provide the comprehensive services for consumers who use it. It has to insure that people can get the useful and specific information from this cites and it is convenient for them to find the messages. So AOL should cover more relevant information for consumers and provide free services to attract more users. So the accuracy and timelineless are some of the key factors to AOL.

What are the main obstacles to international expansion in this business? 黄碧云

The main obstacles to international expansion in this business are languages 、 cultural differences and the barrier from the national governments. 黄碧云

Is the service mobile, with competitive advantages (FSAs and CSAs) intact? 黄碧云

Yes,the service mobile has competitive advantages. In the area of FSAs,AOL has large user base and it use the local language to provide users with localized service.At the aspect of CSAs,AOL establish a strategic alliance with a number of countries in different fields and at all levels. 黄碧云

How would you evaluate the market opportunity for AOL abroad? 06 国贸 1 班 黄霞

Popular social networking sites in America, including MySpace and Facebook, MyYearbook, Tagged and Bebo in the declined order, take great different proportions in the USA market. Because the first two occupies most of the market, while the latter three takes no more than 2%. Compared with fierce competition at home, I think it is wise for AOL to open the overseas market.

Only 16% of AOL’s benefit is from overseas market in 2001, but the AOL aims to make the number to 50% in the following 10 years. They put great attention on China as well as India which they think with at least 100 million potential visitors will be a large market. With so large potential demand,it is good opportunity for AOL to occupy the markets.

As the first-mover in the new marker, AOL can easily survive without competitor, as well enlarge its scale then get much profit. Of course, it sometimes takes much time and money only to end up with failing. After building its brand in the user, AOL can well face with the new competitors, what is more, I think it can benefit a lot from being a leader.

Judging from above we could say that opportunity abroad for AOL is more attractive.

What are the different foreign entry modes for the service? 黄秀娣 There are four types of foreign entry modes for the service ： Into the export mode, including direct and indirect exports. Into the model contract, including license model, franchise mode, contract manufacturing mode and so on. Investment mode, including into the joint venture and into the wholly-owned. International strategic alliance mode.

Into the export mode Advantages: Less capital investment, Help companies achieve economies of scale and location advantages; Access to export experience in an effective way; With a high degree of flexibility. Disadvantages: Tariffs and non-tariff barriers could lead to the loss of export products and the competitive edge of local products; High transport costs; Local products reach the market too long; Difficult to maintain the local agents and local demand for inspection of the producer.

Into the model contract Advantages: Can bypass the import restrictions and obstacles to investment climate; To avoid the high cost of transport; Reduce investment risks; Foreign direct investment in the country may be restricted from access to the technical process proceeds; Project to save operating time. Disadvantages: Only when enterprises have advanced technology or brand to highlight only effective; Lack of control over technology; Face the risk of new competitors; As a result of the contract period and lead to less flexibility; Projects with low returns characteristics

Investment mode Advantages: Business-to-market of foreign control of the relatively high; Higher income levels. Disadvantages: Enterprises involved in the international market, the extent of the deeper; In the face of the needs of the country in which a variety of risk.

International strategic alliance mode Advantages: Broke through the boundaries of time and space; Fewer resources and low cost; Enterprises from the international market risks. Disadvantages: Exchange rate fluctuations from time to time makes domestic enterprises in the export trade at risk; Foreign importers to maintain a successful working relationship more difficult or costly.

What should AOL do in Hong Kong? 何启芬 AOL should give the franchise to the company in HongKong and cooperate with this company to earn profits together. AOL should make some agreements with the company on certain terms and conditions to run the business and then it can provide free services to consumer. AOL can gain the markets and let this comsumers be familiar with the network in this way.