文档介绍：International Business
Lecture 8
Entry Strategy and Strategic Alliances
Introduction
Any firm contemplating foreign expansion must struggle with the following decisions
Which foreign market(s) to enter, when to enter them, and on what scale
Which mode of entry will be utilized
Which Foreign Markets
The choice must be based on an assessment of a nation’s long-run profit potential
(China, India but not Indonesia)
The attractiveness of a country depends upon balancing the benefits, costs, and risks associated with doing business in that country
Benefits include
Size of market
Present wealth of the consumers in the market
Likely future wealth of consumers
Economic growth rates
Timing the Entry
Advantages frequently associated with entering a market early monly known as first-mover advantages
The ability to preempt rivals and capture demand by establishing a strong brand name
Ability to build sales volume
Ability of early entrants to create switching costs
Disadvantages associated with entering a foreign market before other international businesses are referred to as first-mover disadvantages
Pioneering costs are costs that an early entrant has to bear (KFC introduced the Chinese to American-style fast food, but a latter entrant, McDonald, has capitalized on the market in China)
Possibility that regulations may change
Scale of Entry
Large scale entry
mitments - a decision that has a long-term impact and is difficult to reverse (Intel)
May cause rivals to rethink market entry
May lead to petitive response
Small scale entry
Time to learn about market
Reduces exposure risk
Entry Modes
Firms can use six different methods to enter a market
Exporting
Turnkey Projects
(assemble and rung a plex process, . refining petroleum or steel)
Licensing
Franchising
Joint Ventures
Wholly Owned Subsidiaries
Exporting
Advantages:
Avoids cost of establishing manufacturing operations
May help achieve experience curve and location economies
Sony – TV; Samsung – computer me