INTERNATIONAL ENTRY MODES AND SALES DEVELOPMENT

1 CLAUDE OBADIA, PH.D.

International Entry Mode

2

The organization set by an exporter in order to penetrate an overseas market

Integration vs. Delegation

3

Integration or Internalization Action to perform a task internally

Delegation or Externalization Delegation of a task to a third party

Exporting Entry Modes

4

INTEGRATED Direct Sales Sales Subsidiary Sales Office

DELEGATED Trading Company Export Management Company Foreign Distributor Foreign Agent Licensing Franchising (2) Franchising (3)

Franchising (1)

Integrated Entry Modes

Manufact. DIRECT SALES SALES SUBSIDIARY

SALES OFFICE
Product Flow Negotiation Flow

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Coordinat.

EXPORTER

EXPORTER

EXPORTER

Importing

Exporting

FOREIGN SALES SUBSIDIARY Wholesale

FOREIGN DISTRIBUTOR (S)

SALES OFFICE

OVERSEAS

Retailing

FOREIGN RETAILERS

OR

FOREIGN RETAILERS

OR

FOREIGN ENDUSERS

OR

FOREIGN ENDUSERS

OR

OR

FOREIGN ENDUSERS

OR

Delegated Entry Modes

Manufact. TRADING COMPANY EXPORTER EXPORT MGT EXPORTER

DISTRIBUTOR

AGENT
Product Flow Negotiation Flow

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Coordinat.

EXPORT MANAGEMENT COMPANY TRADING COMPANY

EXPORTER

EXPORTER

Exporting

EXPORTER

Importing

Wholesale

FOREIGN DISTRIBUTOR (S)

FOREIGN DISTRIBUTOR (S)

FOREIGN DISTRIBUTOR (S)

FOREIGN DISTRIBUTOR (S)

FOREIGN AGENT

OVERSEAS

Retailing

OR

FOREIGN RETAILERS

OR OR

FOREIGN RETAILERS

OR

FOREIGN RETAILERS

OR

FOREIGN RETAILERS

OR

OR

FOREIGN ENDUSERS

OR OR

FOREIGN ENDUSERS

OR OR

FOREIGN ENDUSERS

OR

OR

FOREIGN ENDUSERS

OR

Licensing and Franchising

Manufact. LICENSING FRANCHISING (1) (Delegated)

7 FRANCHISING (2)
(Delegated)

FRANCHISING (1) (Integrated)

Product Flow Negotiation Flow

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Coordinat.

EXPORTER

EXPORTER

EXPORTER

EXPORTER

Manufact.

Exporting

FOREIGN LICENSEE MASTER FRANCHISER MASTER FRANCHISER

Wholesale

OVERSEAS

FOREIGN WHOLESALER

Retailing

OR

FOREIGN RETAILERS

OR

FOREIGN FRANCHISEES

FOREIGN FRANCHISEES

FOREIGN FRANCHISEES

OR

FOREIGN ENDUSERS

OR

FOREIGN ENDUSERS

FOREIGN ENDUSERS

FOREIGN ENDUSERS

Agency Entry Modes

Manufact. EXPORT MGT EXPORTER AGENT

SALES OFFICE
Product Flow Negotiation Flow

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Coordinat.

EXPORT MANAGEMENT COMPANY

EXPORTER

EXPORTER

Exporting

EXPORTER

Importing

FOREIGN DISTRIBUTOR (S)

FOREIGN DISTRIBUTOR (S)

FOREIGN AGENT

FOREIGN DISTRIBUTOR (S)

SALES OFFICE

OVERSEAS

Wholesale

Retailing

OR OR FOREIGN RETAILERS OR

FOREIGN RETAILERS

OR

OR

FOREIGN RETAILERS

OR

OR

FOREIGN ENDUSERS

OR

OR

FOREIGN ENDUSERS

OR

OR

FOREIGN ENDUSERS

OR

Distributorship Modes
Manufact. TRADING COMPANY EXPORTER DISTRIBUTOR

FOREIGN SUBSIDIARY

Product Flow Negotiation Flow

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Coordinat.

EXPORTER TRADING COMPANY

EXPORTER

Importing

Exporting

Wholesale

FOREIGN DISTRIBUTOR (S)

FOREIGN DISTRIBUTOR (S)

FOREIGN SALES SUBSIDIARY

OVERSEAS

Retailing

OR

FOREIGN RETAILERS

OR

FOREIGN RETAILERS

FOREIGN RETAILERS

OR

FOREIGN ENDUSERS

OR OR

FOREIGN ENDUSERS

OR

OR

FOREIGN ENDUSERS

OR

Decision Criteria 1: OFFERING

10

AGENCY OR DISTRIBUTORSHIP PRODUCT (SERVICE) CHARACTERISTICS LICENSING OR FRANCHISING

Decision Criteria 2: Economic Blocks

11

CURRENCY LOGISTICS

AGENCY OR DISTRIBUTORSHIP