MAURICIO DAVID GARCIA BUESTAN
Entry modes in the global marketplace
- Degree of control the company has over operations. - Ranges from high control in wholly-owned subsidiaries to lower control in licensing agreements.
Control
- Ability to adapt to changing market conditions and strategies. - Exporting and licensing offer more flexibility compared to FDI, which can be relatively rigid.
- Control over the company's brand image in the foreign market. - Franchising provides a balance between brand control and local autonomy.
Brand Control
Adaptability and Flexibility
- Challenges posed by cultural and language differences in marketing and operations. - Strategic alliances can help bridge these gaps through local partners.
- Level of risk involved in terms of capital investment and market uncertainty. - Exporting and licensing often entail lower risk and investment compared to FDI.
Risk and Investment
Cultural and Language Barriers
- Speed at which a company can establish a presence in the foreign market. - Exporting and licensing typically offer faster entry compared to FDI.
Speed of Entry
- Necessity to understand and comply with local laws and regulations. - Licensing and franchising may involve fewer legal complexities compared to FDI.
Legal and Regulatory Compliance
- Resources (financial, human, technological) required for each entry mode. - FDI often requires substantial resource commitment, while exporting may be more resource-efficient.
- Potential for profit and return on investment in the foreign market. - FDI and wholly-owned subsidiaries may offer higher profit potential over the long term.
Profit Potential
Resource Commitment
- Company's knowledge of the foreign market and ability to adapt. - Strategic alliances can provide access to local market knowledge and expertise.
Market Knowledge
Activity 7. Entry Modes Mind-Map_garcía
David García
Created on September 8, 2023
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Transcript
MAURICIO DAVID GARCIA BUESTAN
Entry modes in the global marketplace
- Degree of control the company has over operations. - Ranges from high control in wholly-owned subsidiaries to lower control in licensing agreements.
Control
- Ability to adapt to changing market conditions and strategies. - Exporting and licensing offer more flexibility compared to FDI, which can be relatively rigid.
- Control over the company's brand image in the foreign market. - Franchising provides a balance between brand control and local autonomy.
Brand Control
Adaptability and Flexibility
- Challenges posed by cultural and language differences in marketing and operations. - Strategic alliances can help bridge these gaps through local partners.
- Level of risk involved in terms of capital investment and market uncertainty. - Exporting and licensing often entail lower risk and investment compared to FDI.
Risk and Investment
Cultural and Language Barriers
- Speed at which a company can establish a presence in the foreign market. - Exporting and licensing typically offer faster entry compared to FDI.
Speed of Entry
- Necessity to understand and comply with local laws and regulations. - Licensing and franchising may involve fewer legal complexities compared to FDI.
Legal and Regulatory Compliance
- Resources (financial, human, technological) required for each entry mode. - FDI often requires substantial resource commitment, while exporting may be more resource-efficient.
- Potential for profit and return on investment in the foreign market. - FDI and wholly-owned subsidiaries may offer higher profit potential over the long term.
Profit Potential
Resource Commitment
- Company's knowledge of the foreign market and ability to adapt. - Strategic alliances can provide access to local market knowledge and expertise.
Market Knowledge