GLOBAL MARKET ENTRY

STRATEGIES

Chapter Nine

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 Global Market Entry Strategies
Chapter Nine

• Overview
• 1. Target Market Selection
• 2. Choosing the Mode of Entry
• 3. Exporting
• 4. Licensing
• 5. Franchising
• 6. Contract Manufacturing
• 7. Wholly Owned Subsidiaries
• 8. Cross-Border Strategic Alliances

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 Overview

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 1. Target Market Selection

• Exhibit 9-1 A Logical Flow Model of the

Entry Decision Process
• Exhibit 9-2 Method for Pre-Screening
Market Opportunities: Example
• Exhibit 9-3 Opportunity Matrix for Henkel
in Asia Pacific

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 2. Choosing the Mode of Entry

• Decision Criteria for Mode of Entry

– Market Size and Growth
– Risk
– Government Regulations
– Competitive Environment
– Local Infrastructure
– Exhibit 9-4 Entry Modes and Market
Development
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 2. Choosing the Mode of Entry (cont)

• Company Objectives
• Need for Control
• Internal Resources, Assets, and Capabilities
• Flexibility
• Mode of Entry Choice : A Transaction Cost
Explanation

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 3. Exporting

• Indirect Exporting
• Cooperative Exporting
• Direct Exporting

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 4. Licensing

• Benefits

• Caveats

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 5. Franchising

• Benefits

• Caveats

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6. Contract Manufacturing

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 7. Joint Ventures

• Benefits
• Caveats
– Exhibit 9-5 Conflicting Objectives in Chinese
Joint Ventures

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 7. Joint Ventures (cont)

• Drivers Behind Successful International

Joint Ventures
– Pick the Right Partner
– Establish Clear Objectives from the Beginning
– Bridge Cultural gaps
– Top Managerial Commitment and Respect
– Incremental Approach Works Best

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 8. Wholly Owned Subsidiaries

• Benefits
• Caveats
• Acquisitions (and Mergers)
• Greenfield Operations

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 9. Cross-Border Strategic Alliances

• Types of Strategic Alliances

– Exhibit 9-6 RISC Alliance Groups, Early 1992
– Exhibit 9-7 Cross-Border Technology-Based
Strategic Alliances
• The Logic Behind Strategic Alliances
– Exhibit 9-8 Generic Motives for Strategic
Alliances
– Defense, Catch-up, Remain, Restructure
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 9. Cross-Border Strategic Alliances
(cont)

• Cross-Border Alliances that Succeed

– Alliances between strong and weak partners
seldom work.
– Autonomy and flexibility
– Equal ownership

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