Group 4

Feruz Ashurmatov

Xayitov Shodiyor

Behzod Saidahmatov

Alisher Lapasov

Jonona Jaxongirova

Fatxulla Asatullayev

Doston Umarov

International Market Entry Mode

Last time we have choosen Romania as a potential market. Now we are to select our market
entry mode. Even though there are a variety of reasons that make export modes a viable entry
strategy for us, there are also many other reasons that will encourage our company to switch
to intermediate modes of entry. In this case what happens is that production is moved to a
foreign country. This is usually done via contract manufacturing, whereby manufacturing is
outsourced to an external partner specialised in production or production
technology. Contract manufacturing is grounded on paying a foreign manufacturer on the
basis of the unit produced, this way, by not establishing a wholly-owned subsidiary, our
company can decide to exit a country with a limited sunk cost.

As we know there are three main Intermediate Entry Modes. And we have opted for Joint
Venture which is a strategic alliance or a partnership between two or more parties which is
caused by the opportunity to work together. 

The following factors have determined our choice:

 The opportunity of being closer to the customer

 Lower foreign production costs

 Transportation costs may render heavy or bulk productions non-competitive

 Accessing governmental favour towards national suppliers

 The opportunity to increase the speed of market entry

 Cost savings, as global operations’ management, are very expensive

 Obtaining extra income for technical know-how and services

 Paving the way for future investments in the market