5\ What are the advantages and disadvantages of licensing, joint venture and exporting as market entry strategies? Which strategic options for market entry or expansion did your brand choose?
licensing
joint venture
exporting
advantages
◆Lower-risk entry mode.
◆Limits exposure to economic, financial, and political instability.
◆Permits the company access to markets that may be closed or that may have high entry barriers.
◆Higher control, potentially resulting in higher profits.
◆Costs and risks shared with joint-venture partner.
◆Local partner shares market expertise, relationships, and connections to local government.
◆Manufacturing is home based thus, it is less risky than overseas based
◆Gives an opportunity to ‘learn’ overseas markets before investing in bricks and mortar
◆Reduces the potential risks of operating overseas.
disadvantages
◆Can produce a new competitor: the licensee.
◆Can be problematic if licensee cannot guarantee quality – it affects the brand’s overall reputation.
◆Problematic if franchisee cannot guarantee quality.
◆Repatriation of profits may be difficult if local government has control over joint-venture partner.
◆Can produce a new competitor.
◆70% of all joint ventures break up within 3.5 years.
◆one can be at the “mercy” of overseas agents and so the lack of control has to be weighed against the advantages.
Brand: SAMSUNG
country
time
Entry mode
reason
America
1979
Direct export→exclusive investment
◆large market
◆technology
◆American encourage policy
China
1992
Direct export→joint venture
◆price of labor
◆tariff walls
◆opening level
6\ What factors are important in the standardisation versus adaptation product decision process?【有哪些重要因素在
标准
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化与适应产品决策过程?】
①Factors encouraging standardization are :
1、economics of scale in production and marketing
2、consumer mobility—the more consumers travel the more is the demand
3、technology
4、image -- for example “Japanese”，“made in”
②Factors encouraging adaptation are:
1、 Differing usage conditions—these may be due to climate , skills , level of literacy , culture or physical condition.
2、 General market factors—incomes , tastes etc.
3、 Government—taxation , import quotas , non tariff barriers , health requirements.
4、 History.
5、 Financial considerations.—in order to maximize sales or profits , the organization may have no choice but to adapt its products to local conditions.
6、 Pressure.—the suppliers are forced to adapt to the rules and regulations imposed on them if they wish to enter into the market.
Example: McDonald's creats wealth with beef in many countries , but in India , it can not use beef to make hamburger because cattles are regarded as halidom by Indian.
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