Module II

Modes of Entry into Global Markets

…cont…session 9

Bandana Chadha
Terracota Army, Xi’an
• Terracotta sculptures depicting
the armies of Qin Shi Huang,
the first Emperor of China.
• Shaanxi province.
• Dates to 3rd century BC.
• Discovered by farmers in 1974.
• A form of funerary art buried
with the emperor in 210–209
BC.
• Purpose was to protect
emperor in his afterlife & to
make sure that he had people
to rule over.
• Designated UNESCO world
heritage site in 1987
Bandana Chadha
 Global Marketing
Global marketers have to make global marketing
strategy decisions like:
1. Target market
2. Target product
3. Mode of entry
4. Time of entry
5. Marketing-mix plan
6. Promotion
7. Control systems to check the performance
in foreign markets Bandana Chadha
Modes of Entry into Global Markets
1. Export
• Indirect
• Direct
2. Production Abroad
• Assembly/Contract Mfg
• Licensing
• Franchising
• Joint Ventures
• Mergers & Acquisition
• Wholly owned subsidiary
Bandana Chadha
Factors affecting Modes of Entry
into Global Markets
1. Firm size
2. Resources
3. Risk capacity
4. Mgt. Attitude
5. Market potential
6. Profit Target
7. Competition
8. Knowledge/experience
9. Business Environment
10. Barriers
Bandana Chadha
11. Degree of Control
 Modes of Entry into Global Market
high Acquisition/
Wholly-Owned Subsidiary

Joint
Ventures
Foreign Market Presence

Franchising
Licensing
Control and

Assembly & Contract Mfg

Direct
Exporting
Indirect
Exporting

Production in the Production Abroad

low
Home Market

low Resource Deployment high

Export
 Indirect Exports
• Process of exporting through domestically
based export intermediaries.
• The exporter has no control over its products
in the foreign market.
• Used by companies which lack resources,
knowledge or want to avoid financial risk.
Indirect Exports can be done through:
1. Export Trading Companies
2. Export agents
3. Merchant Traders
4. Buying houses Bandana Chadha
 Indirect Exports Bandana Chadha

• Intermediary provides support services like

warehousing, shipping, insuring and billing for
one or more suppliers.
• Locate buyers, present the product, make
quotations, do documentation etc. in their
own name.
• Act like an outsourced Export Department.
• Attractive to suppliers not familiar with export
• Often bear all commercial risk of exports.
 Indirect Exports
….cont… Indirect exports

• Intermediary work for commission/profit.

• Japan - half of the exports is through large
ETCs called “Sogo shosha” (general trading co’s) :
Top 7 ETC’s :
1. Mitsubishi Corporation
2. Mitsui & Co.
3. Sumitomo Corporation
4. Itochu
5. Marubeni
6. Toyota Tsusho
7. Sojitz Bandana Chadha
Module II- Modes of Entry into Global Markets
Session 10
MBA (Fin) dtd 21.8.18 – 9:15-10:10am: Sec A dtd 28.8.18 – 2:15-3:10pm:
Sec B dtd 27.4.18 11:15-12:10am: Sec C dtd 29.8.18 - 12:15-1:10pm ;
Sec D dtd 5.9.18 1:15-2:10pm

Bandana Chadha
REVIEW - Modes of Entry into Global Markets
Bandana Chadha
1. Export
• Indirect
• Direct
2. Production Abroad
• Assembly
• Contract Mfg
• Licensing
• Franchising
• Joint Ventures
• Merger/Acquisition
• Wholly owned subsidiary
 Indirect Exports
….cont… Indirect exports

S. Korea – Hanwa, Hyundai, Samsung C&T,

LG Int’l, SK Networks.
China – Li & Fung, Minmetals Development
Shanghai Material Trading, Xiamen C&D
India - Adani Enterprises, Tata International,
Reliance Petroleum, Ruchi Int’l, MMTC.

Bandana Chadha
 FORBES 2000- World’s biggest Trading Co’s -2017

http://www.forbes.com/global2000/list/#industry:Trading%20Companies
 FORBES 2000 - World’s biggest Trading Co’s -2017

http://www.forbes.com/global2000/list/#industry:Trading%20Companies
 FORBES 2000 - World’s biggest Trading Co’s -2017

http://www.forbes.com/global2000/list/#industry:Trading%20Companies
 For FORBES 2000 - World’s biggest Trading Co’s
in 2018 see:
https://www.forbes.com/global2000/list/#industry:
Trading%20Companies
 Indirect Exports
Advantages: Bandana Chadha
• Fast market access & Low risk.
• Little or no financial commitment. The export
partner usually covers most expenses associated
with international sales.
• Good for companies which consider their
domestic market to be more important.
• Good for companies just entering international
markets and have no international exposure.
• The management team is not distracted.
• No direct handling of export complexities.
 Indirect Exports
Disadvantages:
• Lower margin due to payment to intermediary
• No control over price, distribution, sales,
marketing, buyer etc.
• Don’t learn how to operate overseas.
• Intermediary may provide no or inadequate
market feedback, thereby affecting the
international success of the company.
• Potentially lower sales as compared to direct
exporting. Bandana Chadha
 Direct Exports Bandana Chadha

• No use of an intermediary
• Usually, Co.’s have their own Export Dept. or some
direct foreign market presence
• Allows economies of scale in production based in
the home country
• Affords better control over customer, price,
distribution, etc.
• Works well till volumes are moderate; Very large
volumes of export may trigger protectionism
Types of Direct Exports
1. Manufacturer/Producer or Service provider
Exporters
2. Sales Representatives
3. Importing Distributors
 Direct Exports Bandana Chadha
1. Manufacturer/Producer Exporter
Exporters who manufacture/produce the product and
then exports it.
Service providers
Provide services, usually IT, ITES, Software & e-
business.

Manufacturer Exporter/Service Providers can be:

 EOU’s
100% Export Oriented Units
 Units in :
EPZs Bandana Chadha
Export Processing Zones
 Direct Exports
SEZs Bandana Chadha

Special Economic Zones

AEZs
Agri Export Zones (AEZs)
EHTPs
Electronic Hardware Technology Parks
STPs
Software Technology Parks
BTPs
Biotechnology Parks
 Types of Direct Exports
2. Sales Representatives
• Represents exporter in foreign market for
commission/salary.
• Provide support services like local advertising/
sales presentations/customs clearance/legal
requirements.
• Best for manufacturers of highly technical
services or products such as production
machinery. Bandana Chadha
 Types of Direct Exports
3. Importing distributors
• Purchase product in their own right &
resell it in local markets to wholesalers,
retailers or both.

• Is a good market entry strategy for

products that are carried in inventory,
such as toys, appliances, prepared
food.
Bandana Chadha
 Direct Exports
Advantages: Bandana Chadha

• Control over selection of foreign markets and

choice of foreign representative companies.
• Good information feedback from target
market.
• Better protection of trademarks, patents,
goodwill, and other intangible property.
• Potentially greater sales than with indirect
exporting.
 Direct Exports
Disadvantages:
• Higher start-up costs and higher risks as
opposed to indirect exporting
• Greater information requirements.
• Longer time-to-market as opposed to
indirect exporting

Bandana Chadha
Production Abroad
 Why Produce Overseas ?
Where exporting may not be appropriate or possible, shift
to production overseas may be required due to :

• Size of the market

• Overcome Trade & Tariff barriers
• Logistics
• Proximity & access to cheap raw material & labour.
• Proximity to Market & entry to other neighbouring
markets
• Tax benefits
• Local presence to respond to changing market
conditions
• Competition Bandana Chadha
• Diversification of Risk
Module II-Modes of Entry into Global Markets
Session 11
MBA (Fin) dtd 28.8.18 – 9:15-10:10am; Sec E dtd 30.8.18 – 12:15-2:10pm:
Sec A dtd 31.8.18 – 9:15-10:10am; Sec C dtd 5.9.18 – 12:15-1:10pm
Sec D dtd 6.9.18 10:15-11:10pm; Sec B dtd 7.9.18 – 10:15-11:10am

Bandana Chadha
 REVIEW - Direct Exports
1. Manufacturer Exporter/Service Providers
can be:
 EOU’s
100% Export Oriented Units

 Units in :
EPZs
Export Processing Zones
Bandana Chadha
 REVIEW - Direct Exports
SEZs
Special Economic Zones
AEZs
Agri Export Zones (AEZs)
EHTPs
Electronic Hardware Technology Parks
STPs
Software Technology Parks
BTPs Bandana Chadha
Biotechnology Parks
REVIEW - Modes of Entry into Global Markets
Bandana Chadha
1. Export
• Indirect √
• Direct √
2. Production Abroad
• Assembly
• Contract Mfg
• Licensing
• Franchising
• Joint Ventures
• Merger/Acquisition
• Wholly owned subsidiary
 Assembly & Contract Manufacturing
Assembling Bandana Chadha

• Compromise between exporting & foreign mfg.

• Firm produces domestically all or most of the
components/ingredients of its product
• Ships them to foreign markets to be put together
as a finished product
• By shipping in CKD (completely knocked down)
form, firm saves on transportation & custom
tariffs which are generally lower on unassembled
equipment than on finished products.
 Assembly & Contract Manufacturing
Assembling
• Benefit of local employment facilitates
integration of firm in the foreign market
e.g. used in automobile & farm equipment
industries.
Coca-Cola ships its syrup to foreign markets,
local bottlers add water & the container.

Bandana Chadha
 Assembly & Contract Manufacturing
Bandana Chadha
Contract manufacturing
• Product is produced in the foreign market by
local producer under contract.
• A form of outsourcing.
• Contract covers only manufacturing,
marketing is handled by a sales subsidiary.
• Obviates the need for plant investment,
transportation costs, custom tariffs & firm
gets advantage of advertising its product as
locally made
 Assembly & Contract Manufacturing
Contract manufacturing
• Enables the firm to avoid labour and other
problems that may arise from its lack of
familiarity with the local economy and culture
•
e.g. iPad and iPhone of Apple are manufactured
in China by Foxconn

Bandana Chadha
 Licensing
Int’l licensing agreement allows foreign firms to
transfer the rights to make & sell a product or
use a Brand/Patent/Trade Mark/ design/logo/
mark/ copyright or other intellectual property
in the host country in return for a fee
• The Licensor in the home country transfers
limited rights or resources available to the
Licensee in the host country, while retaining
proprietary IPR
• The licensor is saved the botheration of
opening a new operation overseas Bandana Chadha
 Licensing Bandana Chadha

• Licensor earns a one time payment, technical

fees &/or royalty on sales
• Transfer of knowledge between parent Co. &
the licensee is strong
• Should be used only in those countries where
respect for intellectual property is strong to
avoid competing with each other markets
• Is a relatively flexible work agreement that can
be customized to fit the needs and interests of
both, licensor and licensee
 Licensing Bandana Chadha

• Tokyo Disneyland is a licensing agreement

between Walt Disney (WD), U.S. & Oriental
Land Corp. (OL) of Japan, which owns the park
• WD received a license fee of 7% of sales in
exchange for providing OL with managerial
and technological know-how
• Tokyo Disneyland & its companion park, Tokyo
DisneySea, are the only Disney parks not
wholly or partially owned by WD
 Licensing
Trademark and brand licensing -Andre Agassi
tennis clothing
Artwork and character licensing - Walt
Disney, Looney Tunes, Godzilla, Batman,
Harry Potter characters
Licensing of rights to copy books, software,
music, films, photographs, etc.

Bandana Chadha
 Indian Licensees
• Arvind Lifestyle Brands– Licensee for
Wrangler, Arrow, Lee, Nautica, Jansport,
Calvin Klein, Flying Machine, US Polo, Kipling,
Debenhams, Next, Gap & Tommy Hilfiger.
• The Murjani Group - licensee for FCUK,
Tommy Hilfiger (initially for 25 yrs; now JV with Arvind), Gucci,
Bottega Veneta, Jimmy Choo.
• Madura Garments (Adirya Birla Group)- Van Heusen,
Louis Philippe, Allen Solly, Esprit
• Spencers Retail – is licensee for Beverly Hills
Polo Club (BHPC) Bandana Chadha
 Indian Licensees
• India Today Group – is licensee for publishing
& distributing licensed Disney magazines in
India

Bandana Chadha
 Licensing
Advantages
• Licensor obtains extra income for technical
know-how & services.
• Can reach new markets not accessible by
export from existing facilities.
• Expand without much risk & large capital
investment.
• Paves the way for future investments in the
market. Bandana Chadha
 Licensing
…… cont….Advantages

• Good way to enter & retain established

markets closed by trade restrictions.
• Political risk is minimized as the licensee is
usually 100% locally owned.
• Is highly attractive for companies that are new
in international business.

Bandana Chadha
 Licensing
Disadvantages:
• Lower income than in other entry modes.
• Lack of control over licensee’s manufacturing
& marketing may lead to loss of quality &
margin.
• Risk of having the trademark and reputation
ruined by a incompetent partner.
• The foreign partner can also become a
competitor by selling its production in places
where the parent company is already in.
 Modes of Entry into Global Markets
Module II-
Session 12
MBA (Fin) dtd 30.8.18 – 9:15-10:10am; Sec A dtd 4.9.18 – 2:15-3:10pm;
Sec D dtd 7.9.18 – 11:15-12:10pm; Sec C dtd 10.9.18 – 9:15-10: 10am
Sec B dtd 10.9.18 – 11:15-12:10am

Bandana Chadha
 Franchising
Franchising is the practice of using another
firm's successful business model.

• Semi-independent business owners

(franchisees) pay fees & royalties to a parent
company (franchiser)
• in return for the right to become identified with
its trademark, to sell its products or services,
and replicate its business format and system.
Bandana Chadha
 Franchising Bandana Chadha

• Franchisor not only shares trademark/patents

but also operating know-how of business and
offers rights & resources like:
 equipments
managerial systems
operation manual
initial trainings
site approval and
all support necessary for the franchisee
to run its business in the same way it is
done by the franchisor.
 Franchising

• Coca-Cola, Pepsi, Pizza Hut, McDonalds,

Subway, KFC, Dunkin Donuts, TGIF, Wal-mart,
Starbucks, Taco-Bell, Levis, Holiday Inn, Hyatt,
NIIT use the Franchising model.

Bandana Chadha
 Franchising
Advantages:
• Well selected partners bring financial
investment as well as managerial
capabilities to the operation.
• Low political risk
• Low cost for franchiser
• Allows quick expansion into different
regions of the world
• Established brand from day one Bandana Chadha
 Franchising Bandana Chadha
Disadvantages:
• Franchisees may turn into future competitors.
• For new franchisors, demand of franchisees
may be less, which can lead to making
agreements with the wrong candidates.
• A wrong franchisee may ruin the company’s
name and reputation in the market.
• Compared to export & licensing, franchising
requires greater financial investment to
attract and support and manage franchisees.
 Franchising vs. Licensing
• Uses another firm's successful • Gives limited permission to use IP.
business model including IP &
operating systems.

• Simple, loosely knit relationship

• Complex, standardized internal based on mutual agreement
systems, operations, marketing &
distribution
• No support from Parent Co.
• Full support, Training & knowledge
from parent co.
• Exclusive Territorial rights offered • No exclusive territorial rights to
to Franchise. the licensee; several licensees
may exist in territory.

• Pay royalty from the sales/profit. • Usually fee, licensee may get to
keep the profit.

• Strictly monitored & control by • Freedom of operation.

parent Co. Bandana Chadha
 Joint Ventures
Strategic Alliances in which parties agree to
create a new entity by contributing equity.
The common objectives of JV’s are:
i. Joint Market entry
ii. Leveraging both partners core strength
iii. Risk/reward sharing
iv. Technology sharing
v. Joint innovation & product development
vi. Conforming to government regulations
Bandana Chadha
 Joint Ventures
• Maruti-Suzuki ; Hero-Honda
• Sony-Ericsson
• Virgin Mobile – Virgin Atlantic & Tata Teleservices
• Bharti-Wal-Mart
• Bharti Airtel -Singapore Telecom
• Toyota Kirloskar Motor
• Marks & Spencer & Reliance Retail
• Reliance Industries & BP PLC – Indian Gas solutions
• Kinetic Honda
• LML Paggio
• Inditex Trent - Inditex & Tata Group's Trent –market Zara
Bandana Chadha
 Joint Ventures
• Tata Starbucks
• Tata Docomo
• Bajaj Allianze Insurance
• Lee Cooper India Ltd. - Lee Cooper & Pantaloon Retail
• Tata AIG
• Renault Nissan
• Vistara - Tata Sons & Singapore Airlines
• Nokia Siemens Networks
• Cadbury Schweppes PLC
• Caradigm – Microsoft & GE (health IT Co.)
• Hisun-Pfizer – Pfizer & Zhejiang Hisun
• Dow Corning – Dow Chemical Co. & Corning Bandana Chadha
http://infomory.com/famous/famous-joint-venture-companies/
 Joint Ventures
Star Union Dai-ichi Life Insurance - Bank of India, Union Bank
of India & Dai-ichi Life, Japan.
ICICI Prudential Prudential - ICICI Bank & Prudential plc UK
Cholamandalam MS General Insurance (Chola MS) -
Murugappa Group & Mitsui Sumitomo Insurance Group ,
Japan.
ICICI Lombard General Insurance - ICICI Bank Limited &
Fairfax Financial Holdings Limited, Canada
IFFCO Tokio General Insurance - Indian Farmers Fertilizer
Cooperative (IFFCO) & Tokio Marine and Nichido Fire Group.
Tata AIG General Insurance - Tata Group &
American International Group (AIG).
HDFC Life - HDFC & Standard Life plc., UK Bandana Chadha
 Joint Ventures Bandana Chadha
Advantages
Leveraging Resources – pooling of resources
while limiting exposure.
Exploiting complementary skill, capabilities &
Expertise.
Partners are able to learn from each other.
Sharing Liabilities.
Market access where local law restricts
foreign entry or mandates local partner.
View to integrate the operations of the JV into
the main company in the future.
 Joint Ventures Bandana Chadha
Disadvantages:
• Conflict over new investments/mgt. style etc.
• Transparency & Mistrust over proprietary
knowledge.
• Performance ambiguity - how to split the pie.
• Lack of parent firm support.
• Cultural clashes.
• If, how, and when to terminate the relationship.
• JVs partners have conflicting pressures to
cooperate and compete.
 Modes of Entry into Global Markets
Module II-
Session 13
MBA (Fin) dtd 4.9.18 – 9:15-10:10am; Sec E dtd 6.9.18 – 12:10-2:10pm;
Sec A 7.9.18-9:15-10:10 am; Sec C dtd 12.9.18 – 9:15-10:10am;
Sec D dtd 12.9.18-1:15-2:10pm; Sec B dtd 12.9.18- 3:15-4:10pm

Bandana Chadha
 Bandana Chadha
McDonalds
• Globally, does not like to own its ventures or operate
them.
• Its preferred model is a low-risk, low-hassle: franchise
model.
• Charge a fee plus royalty on sales.
• So, the more the outlets sell, the more money
McDonald's makes.
• Of its 37,000 outlets in 120 countries, 80% are through
franchise route.
• In some developing countries, McDonald's also enters
via the ownership model.
http://articles.economictimes.indiatimes.com/2013-09-24/news/42361242_1_india-wazir-advisors-countries
 Bandana Chadha
McDonalds in India
• India- Entered in 1995, with two 50:50 joint
ventures for 25 years valid till 2020:
Vikram Bakshi for North & East - Connaught
Plaza Restaurants
Amit Jatia for South & West - Hardcastle
Restaurants
• Both Bakshi and Jatia had a footprint in real estate.
• In a public notice on August 30, 2013, McD said
Bakshi had “ceased to be the managing director of
Connaught Plaza Restaurants”, their joint venture.
htpp//articles.economictimes.indiatimes.com/2013-09-24/news/42361242_1_india-wazir-advisors-countries
 Bandana Chadha
McDonalds in India
• McD claimed Bakshi had business interests outside the
JV which were profiting from him being the MD.
• McD also alleged that funds had been diverted to
Bakshi's other hospitality business.
• McD obtained a Delhi High Court order restraining
Bakshi from selling his shares in the JV until Company
Law Board (CLB) issues an interim order.
• In Dec ‘13, McD approached the London Court of
International Arbitration (LCIA) for arbitration even
though the matter was being heard at CLB.
• In Dec ‘14 Bakshi proposed to CLB his willingness to
sell his stake in the JV for Rs 1,800 crores against
McD’s offer of just Rs 48-50 crores.
• http://articles.economictimes.indiatimes.com/2014-02-05/news/47049418_1_vikram-bakshi-cprl-lcia
 Bandana Chadha
McDonalds in India
• On 22nd Aug 2017 McD announced that it would not
allow CPRL to any of McD’s intellectual property
resulting in the closure of 169 outlets spread across
North and East India.
• 84 outlets had to shut on December 25 2017 after
Bakshi-led CPRL's logistics partner Radhakrishna
Foodland discontinued its supply services.
• Bakshi, however, reopened all with new logistics
vendor ColdEX to resume supply to affected outlet.
Wholly owned subsidiaries (WOS)
Is a company entirely owned & controlled by
another company. The owner of a WOS is called
the parent company or holding company.
WOS are preferred by companies wanting to retain
complete control & ownership e.g. high-tech
companies want to retain control & ownership of
their technology.
e.g. Coca-Cola India Pvt Ltd., GlaxoSmithKline
Pharmaceuticals Ltd. (GSK India), Nestle India,
Citigroup, IBM, Xerox, Oracle, LG Electronics India,
Alcon Laboratories India Pvt. Ltd (Nestle’s eye care company),
Bandana Chadha
 Wholly owned subsidiaries (WOS)
Nike entered India in 1992 through a 7 year license but is now
a 100% subsidiary of the US parent company.

Adidas India Marketing originally into a JV with Delhi-based

Magnum International Trading Company to engage in
sourcing, distribution & marketing of sports footwear,
sportswear and sports equipment in India. It has bought
out Magnum to become a 100% WOS.

Volkswagen Group of America, Inc., including distinguished

brands such as Audi, Bentley, Bugatti, Lamborghini and
Volkswagen, is a wholly owned subsidiary of Volkswagen
AG.
Bandana Chadha
 Wholly owned subsidiaries (WOS)
Marvel Entertainment and EDL Holding Company LLC are
wholly owned subsidiaries of The Walt Disney Company

Starbucks Japan is wholly owned subsidiary of Starbucks

Corp.

Bandana Chadha
Wholly owned subsidiaries (WOS)

Two types of strategies:

1. Greenfield investment
2. Acquisitions or Brownfied investment

Bandana Chadha
 Wholly owned subsidiaries (WOS)
Bandana Chadha
1. Greenfield investment
Is the establishment of a new WOS.
• Often complex and potentially costly, but
offers full control to the firm & has the most
potential to provide above average return.

• Mostly preferred where physical capital

intensive plants are planned or
• if there are no competitors available to
transfer competencies/skills/routines/culture.
 Brownfield Investment
2. Acquisition/Merger Bandana Chadha

Alternatively, a Co. can grow by merging or

acquiring most, if not all, of the target company's
ownership stakes in order to assume control.
Advantages :
• Fastest access & way to achieve greater market
share.
• Lower risk than Greenfield investment.
• Attractive if there are well established firms
already in operations or competitors want to
enter the region.
 Wholly owned subsidiaries (WOS)
Disadvantages of Acquisition Bandana Chadha

• Integrating two organizations is complex due

to different organization cultures, control
system, and relationships.
• Expensive way to enter; heavy external
borrowing to finance an acquisition may cause
bankruptcy.
• Leads to too much diversification which may
cause problems.
• Mgt. may fail to manage the diversification
 Wholly owned subsidiaries (WOS)
Biggest Acquisitions by Indian Co.’s Bandana Chadha
1. Tata Group Acquired Corus, October 2006
Deal size: $12.98 billion, Country: United
Kingdom
2. Bharti Airtel acquired Zain Africa, February
2010
Deal size: $10.7 billion, Country: Kenya
3. Hindalco Industires acquired Novelis ,
February 2007
Deal size: $5.73 billion, Country: Canada
 Wholly owned subsidiaries (WOS)
Biggest Acquisitions by Indian Co’s Bandana Chadha
4. ONGC acquired Kashagan Oilfields,
November 2012
Deal size: $5 billion, Country: Kazakhstan
5. ONGC acquired Imperial Energy, August
2008
Deal size: $2.62 billion, Country: United
Kingdom
6. Tata Motors acquired Jaguar Cars and Land
Rover, March 2008
Deal size: $2.3 billion, Country: United
 Wholly owned subsidiaries (WOS)
Biggest Acquisitions by Indian Co’s Bandana Chadha
7. Tanti Group of Companies and Arcapita
Bank BSCc acquired Honiton Energy, April
2010
Deal size: $2 billion, Country: China
8. Adani Enterprises acquired Port Terminals,
May 2011
Deal size: $1.97 billion, Country: Australia
9. Essar Global acquired Algoma Steel, April
2007
Deal size: $1.79 billion, Country: Canada
Wholly owned subsidiaries (WOS)
Biggest Acquisitions by Indian Co’s Bandana Chadha
10. Reliance Industries acquires Oil & Gas
Assets (Marcellus Shale), April 2007
Deal size: $1.7 billion, Country: United
States
11. Indian Hotels Co acquired Orient-Express
Hotels, October 2012
Deal size: $1.67 billion, Country: Bermuda
12. Essar Global acquired Minnesota Steel, April
2007
Deal size: $1.65 billion, Country: United
Wholly owned subsidiaries (WOS)
Biggest Acquisitions by Indian Co’s Bandana Chadha
13 Zomato acquired Urbanspoon, U.S. in 2015;
Deal size US$ 55 mill
14. Tata acquired Tetley, UK in 2000;
Deal size US$ 55 mill
 Choice of Entry Mode
Type of Entry Characteristics Bandana Chadha

Indirect Export Low cost, risk, return, control

Direct Exports Higher cost, risk, return; higher
control
Licensing
Low cost, risk, return, control
Franchising
Low cost, risk; better return & control
JV Shared cost/resources/risk; problems
of compatibility
Acquisition Quick access, high cost, complex
negotiations & integration
WO Subsidiary High cost/risk/return; Max control
Thank You !!