8. Define the different modes of entry a firm may choose from when entering a foreign market. Choose three entry modes and discuss the key ads and diss of each using Eg Flashcards
1
Q
States all the mode of entry
A
WLET-FJ
Wholly Owned Subsidiary Licensing Exporting Turnkey Projects Franchising Joint Ventures
2
Q
Define Wholly Owned Subsidiary
A
100% of the stocks are owned by the firm.
This can be done by a greenfield venture or an acquisition
3
Q
Define Licencing
A
A business arrangement where one company gives permission to another company to produce its products for a specified length of time
4
Q
Turnkey Projects
A
A contractor is in charge of the project for a foreign client. The contractor is in charge of the personnel and training.
In charge of every detail of the project
5
Q
Joint Ventures
A
2 independent cooperations working together
6
Q
Advantages and disadvantages of Franchising
A
Ads:
Low development costs + risks = everything is already set up
Disadvantages
Lack of control over quality
Unable to engage in global strategic cooperation
