Internal test of International marketing

Submitted by: Shashwat Shukla

Submitted to: Prof. Aditya Kumar
A1833318033
Section E
Semester 5
Q. Explain various mode of entries of the company operating in service based business? Justify
your choice for entry?
There are a lot of ways through which company enter in international markets which are
Exporting , Licensing and Franchising , Contract Manufacturing and Outsourcing , Partnerships
and Strategic Alliances , mergers and acquisitions .
1.Exporting :
It means the sale abroad of an item produced , stored or processed in the
supplying firm’s home country. It is a convenient method to increase the
sales. Passive exporting occurs when a firm receives canvassed
them. Active exporting conversely results from a strategic decision to
establish proper systems for organizing the export functions and for
procuring foreign sales.

When it comes to service based business exporting is less likely an option of a company
Franchising
It is a system in which semi independent business owners (franchises) pay fees and royalty to a
parent company (franchiser) in return for trademark , brand , to sell its product or services ,
business model.
Advantages
 It is less risky
 Advantage of expertise of franchiser.
 Highly motivated employees
Disadvantages
 Difficulty in keeping trade secrets.
 Franchisee may become a future competitor.
 A wrong franchisee may ruin company name and goodwill.
2.Licensing :
In this mode of entry ,the domestic manufacturer leases the right to useits intellectual property
(ie) technology , copy rights ,brand name etc to a manufacturer in a foreign country for a fee.
Here the manufacturer in thedomestic country is called licensor and the manufacturer in the
foreign iscalled licensee. The cost of entering market through this mode is lesscostly. The
domestic company can choose any international location andenjoy the advantages without
incurring any obligations and responsibilitiesof ownership ,managerial ,investment etc.
Advantages
 Low investment on the part of licensor.
 Low financial risk to the licensor.
 Licensor can investigate the foreign market without much efforts on
 his part.
 Licensee gets the benefits with less investment on research and
 development
 Licensee escapes himself from the risk of product failure.
Disadvantages:
 It reduces market opportunities for both
 Both parties have to maintain the product quality and promote the
 product . Therefore one party can affect the other through their
 improper acts.
 Chance for misunderstanding between the parties.

6.Joint Venture
Two or more firm join together to create a new business entity that is
legally separate and distinct from its parents. It involves shared ownership.
Various environmental factors like social , technological economic and
political encourage the formation of joint ventures. It provides strength in
terms of required capital. Latest technology required human talent etc. and
enable the companies to share the risk in the foreign markets. This act
improves the local image in the host country and also satisfies the
governmental joint venture.
Advantages:
1. Joint venture provide large capital funds suitable for major projects.
2. It spread the risk between or among partners.
3. It provide skills like technical skills, technology, human skills ,
expertise , marketing skills.
4. It make large projects and turn key projects feasible and possible.
5. It synergy due to combined efforts of varied parties.
Disadvantages:
1. Conflict may arise
2. Partner delay the decision making once the dispute arises. Then the
operations become unresponsive and inefficient.
3. Life cycle of a joint venture is hindered by many causes of collapse.
4. Scope for collapse of a joint venture is more due to entry of
competitors changes in the partners strength.
5. The decision making is slowed down in joint ventures due to the
involvement of a number of parties.

Mergers and acqusitions

A domestic company selects a foreign company and merger itself with

foreign company in order to enter international business. Alternatively the
domestic company may purchase the foreign company and acquires it
ownership and control. It provides immediate access to international
manufacturing facilities and marketing network.

Q2 How technology had modified the logistics management operations? Explain ?

Logistics is the system designed to add place value and time value (as defined by the customer)
to the product. There are important aspects that either flow from this definition or support this
definition:
(1) A customer (of a system) is the entity which receives the output of that system.
(2) The customer, and only the customer, defines or determines place and time value.
(3) The customer can be either internal or external.
(4) Value is the thing for which the customer is prepared to pay.
(5) The logistic system will be successful to the degree to which it can add place and time value.
(6) The success of the value-adding process will be determined by the level of knowledge of
what the customer needs, i.e. what the customer sees as value.
Management is the improvement of the system to ensure long-term survival. In order to improve
the system management must:
 • Create the ability, in the system, to generate the variety (desired state) required at any point in
time. This also can be seen as the ability to "innovate" in the broad sense of the word.
• Control the variability or randomness in the system in order to achieve an almost regular and,
as such, predictable behaviour pattern. There are again some important aspects of the definition
that need to be highlighted: (1) It is the responsibility of management to create a system that can
generate the required variety, i.e. innovate or adapt.
Technology comprises structured systems (knowledge, skills, tools, machines, etc.) designed to
achieve a defined set of goals, within a defined system, through a well defined, structured set of
processes and interfaces. The purpose of technology is the creation of utility or value. Important
aspects of this definition are:
(1) The application or use of technology is the focus of the definition.
(2) Technology is a structured system; without structure ''technology'' is potentially useless or of
limited use.
(3) Adding value within a defined system, or set of systems, is the purpose of technology.
Technology will only add its full potential value within the system for which it was designed.
(4) The interfaces in the technology and in the system (in which the technology is applied) must
be well understood and continuously managed.
(5) Technology embedded in an unstructured or illdefined system with ill-defined interfaces may
add chaos rather than value.