Entry Strategies Flashcards
1
Q
Different Entry Strategies
A
External: - Exports - Turnkey Projects - licensing - franchising - alliances Internal: - Joint Venture - FDI
2
Q
Export
A
Issues with exporting:
- vulnerable to tariffs
- side kick distance–> hard to get insights into foreign markets
- might be more expensive due to transport cost or tarifs
3
Q
Turnkey Projects
A
Firm builds up production plant in foreign country and then gives it over to domestic owners
- minimal risk but also minimal potential for future profits
4
Q
Licensing
A
- Right to intangible property such as:
- patents, inventions, formulas etc
- specified period of time
- specified compensation
5
Q
Licensing vs franchising
A
License: Right to use or do something under legal framework (offer a service, method etc)
Franchise: Buying a business in a box, license is in the whole “box” already
6
Q
alliances
A
international strategic alliances:
- cooperative agreements between competitiors from different countries
7
Q
advantages first mover
A
- build a strong brand
- create high switching prices
- –> creating standards
- elstablish important relationships
8
Q
disadvantages first mover
A
- time to learn dos and donts
- high cost to built infrastructure
- high risk
- pioneering costs
9
Q
what makes stron joint ventures?
A
1) shared vision of the future
2) complementary skillsets
