Market Entry - Lecture 3 Flashcards
What options does an MNC have for entering a countries market?
An MNC has various options for entering a countries market that include exporting, licensing, franchising, joint ventures and wholly owned subsidiaries
What are the risks/rewards associated with these options for an MNC for entering a country
The risks and rewards for these options for an MNC to enter a country include factors such as control over operations, financial investment, regulatory compliance, intellectual property, protection market access, and potential for long-term growth and profitability
There are four dimensions across which entry modes differ. What are these?
The four dimensions across which entry modes differ include the level of control, the degree of financial commitment, the extent of risk exposure and the level of managerial involvement
In what ways might an MNCs focus
An MNC’s focus on preserving its core competencies might influence its decision regarding the mode of entry by favouring strategies such as joint ventures or acquisitions to leverage existing strengths or licensing to maintain control over proprietary technology or expertise.
What three basic decisions must an MNC consider when entering a foreign market
When entering a foreign market, an MNC must consider when to enter to leverage advantages or learn from early entrants also consider which market to enter based on the size of the market and potential market growth and the final one is how to enter to balance the risks and rewards based on the potential of the market and the risk tolerance.
Which factors should be considered in each decision and explain their relevance
when entering a foreign countries market factors that should be considered are market size, growth rates competition and product stability to ensure alignment with the MNCs business model and goals. The timing of the entry requires analysing potential market conditions and competitive landscape to capitalise on advantages or learn from early entrants. How to enter is very important as it involves balancing risks and rewards based on market potential and the risk tolerance
How do the decisions link together. Are there trade-offs between risk and reward associated within each decision and across decisions
The decisions of which market to enter, when to enter and in what scale to enter are all interlinked as they collectively shape the entry mode strategy of an MNC. These decisions do involve trade offs between risk and reward, both within each decision, and across decisions as different strategies entail varying levels of risk exposure and potential returns =
