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Unformatted text preview: Chapter 12: Entering Foreign Markets Basic Entry Decisions 1. Which markets to enter? 2. When to enter those markets? Timing of Entry 3. Size of scale of entry? Which Markets to Enter? Base your decision on an assessment of a nation’s long run profit potential.- Potential market depends on the nation’s benefits, costs, and risk. Nation’s function of factor is key to entering a market- Size of the market, present wealth (purchasing power), and future present wealth Risks associated with business in foreign nations are lower in economically advanced and politically stable democratic nations.- Although China and India are relatively poor, they are growing rapidly attracting investors. Value creating in a foreign market.- Introducing a non-widely available product that satisfies an unmet need. When to enter those markets? Timing of Entry – when a business enters a foreign market- Considered early when an IB enters before other foreign firms- Considered late when and IB enters after already established firms First-Mover Advantages – advantages associated with early entrance to market 1. Ability to preempt rivals and capture demand by est. a strong brand name 2. Ability to build sales volume and ride down the experience curve 3. Ability to create switching costs that tie customers down First-Mover Disadvantages – disadvantages affecting early entrants to foreign market...
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- Spring '08
- Economics, partner, foreign market