Entering and Operating in International Makertz

Question 1

Pros of exporting

Answer 1

Can test the market very easily
No need for a national presence
Fast to start up
Retention of ownership of product/service = keeps quality and consistency

Question 2

Cons of Exporting

Answer 2

Little information on local tastes
Little opportunity to market to new country
No local presence

Question 3

Pros of Franchising

Answer 3

Product must already have successful operation
Easy to grow
Equipment and branding available
Brand image

Question 4

Cons of Franchising

Answer 4

Can be costly for the franchisee
Can damage reputation
No scope to diversify

Question 5

Pros of JV

Answer 5

Access skills and knowledge
Costs of R+D shared
Shared risk
Shared expertise

Question 6

Cons of JV

Answer 6

Potential disputes
Shared profit
Loss of control

Question 7

Pros of FDI

Answer 7

Potential greater returns
Access to local market
Increases employment in host

Question 8

Cons of FDI

Answer 8

Costly to invest
Difficult to leave
High risk
Cultural differences

Question 9

How to enter - Equity/Non Equity Mode

Answer 9

Non Equity mode
Entering foreign markets through exports and contractual agreements often reflects relatively smaller commitments to overseas markets

Equity mode (FDI)
Entering foreign markets through Joint Ventures and wholly owned subsidiaries (JVs and Wholly-Owned Subsidiaries)  indicates a relatively larger, harder-to-reverse commitment