International Market Entry Strategies Flashcards

International Market Entry Strategies Flashcards
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Franchising: Advantages

Opening a business with this strategy provides you will a business model that is already known to be a success. Developmental work is already completed and you have a clear path to follow.

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Foreign Licensing Agreement

You enter into this kind of agreement if you agree to let a company sell your products in another country in exchange for royalties. You may lose control of your information in this process.

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Exporting

This strategy for entering a foreign market has the lowest amount of risk. It involves selling a product to people in a different country and may require high transportation costs.

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Franchising

You can spread into a foreign market with this strategy by entering into an agreement to use the name and processes of another company.

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Joint Venture

A strategy to enter a foreign market that requires you to partner up with a company local to this new market. You may need to deal with disputes with this partner.

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Licensing

Businesses enter a foreign market using this strategy when they agree to pay another company a fee in order to produce a service or product that is already established.

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Foreign Direct Investment

A method to break into a foreign market that is very risky and that costs a lot, since you buy into another company. However, it does allow you to have control of your business.

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15 cards in set

Flashcard Content Overview

You can work with these flashcards to go over the pros and cons of different international market entry strategies, including:

  • Franchising
  • Licensing
  • Foreign direct investment
  • Joint ventures
  • Exporting

These cards also offer you the chance to review the uses of offshoring, outsourcing and contract manufacturing.

Front
Back
Foreign Direct Investment

A method to break into a foreign market that is very risky and that costs a lot, since you buy into another company. However, it does allow you to have control of your business.

Licensing

Businesses enter a foreign market using this strategy when they agree to pay another company a fee in order to produce a service or product that is already established.

Joint Venture

A strategy to enter a foreign market that requires you to partner up with a company local to this new market. You may need to deal with disputes with this partner.

Franchising

You can spread into a foreign market with this strategy by entering into an agreement to use the name and processes of another company.

Exporting

This strategy for entering a foreign market has the lowest amount of risk. It involves selling a product to people in a different country and may require high transportation costs.

Foreign Licensing Agreement

You enter into this kind of agreement if you agree to let a company sell your products in another country in exchange for royalties. You may lose control of your information in this process.

Franchising: Advantages

Opening a business with this strategy provides you will a business model that is already known to be a success. Developmental work is already completed and you have a clear path to follow.

Fiduciary Duties

These require one individual to always act in ways that serve another person's best interest. In a joint venture, all partners share these duties with one another.

Anti-Trust Laws

These regulations stop a company from absorbing all competition in order to control a market. Joint ventures may be subject to these regulations.

Balance of Trade

You can look at this to determine the difference between the total value of goods exported from a country and the total value of goods imported into a country.

Free Trade

This practice works to eliminate quotas, tariffs and other taxes on exported products. This is limited between some countries, such as the U.S. and North Korea, Iran and Cuba.

Contract Manufacturing

The process of hiring an outside company to complete a portion of your manufacturing process. This many lower the cost for your company, which is considered its most important advantage.

Foreign Direct Investment: Advantages

Businesses may consider using this method of investment to access markets that otherwise limit foreign sales, often with quotas or tariffs. It also lowers production costs and provides resources.

Offshoring

Businesses participate in this when they buy things from different countries or when they move production facilities to foreign markets, which can result in a loss of control.

Outsourcing

A process wherein a business hires someone outside of the company to complete a task. The person hired may live in the same country. This can lower company costs and increase flexibility.

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