INBS 346--Chapter 15, Ball et al

INBS 346--Chapter 15, Ball et al - Chapter Fifteen Chapter...

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Chapter Fifteen Chapter Fifteen Entry Modes
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1-2 15-2 Pioneers vs. Fast Followers Pioneers vs. Fast Followers h Pioneers 1 Can gain and maintain competitive edge in new market 1 May not perform as well in the long run as followers 1 Are most successful when 1 High entry barriers exist 1 Firm has sufficient size, resources, and competencies 1 Followers 1 Many become followers by default 1 May let pioneer take initial risks 1 Are most successful when 1 There are few legal, technological, cultural, or financial barriers 1 They have sufficient resources and competencies to overwhelm the pioneer’s early advantage
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1-3 15-3 Entering Foreign Markets Entering Foreign Markets Non Equity Modes Non Equity Modes h Exporting 1 Selling some regular production overseas 1 Requires little investment 1 Relatively free of risk 1 Indirect exporting 1 Direct exporting 1 Subcontracting 1 Countertrade (discussed in Chapter 21) 1 Licensing 1 Franchising 1 Contract Manufacturing
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1-4 15-4 Non-Equity Mode Non-Equity Mode h Indirect exporting through home-based exporters 1 Manufacturers’ export agents 1 sell for the manufacturer 1 Export commission agents 1 buy for overseas customers 1 Export merchants 1 purchase and sell for own accounts 1 International firms export to their own affiliates 1 use the goods overseas
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1-5 15-5 Non-Equity Mode Non-Equity Mode h Indirect Exporting 1 Advantages 1 Simpler than direct exporting 1 Disadvantages 1 Commission paid to export agents, commission agents, export merchants 1 Foreign business can be lost if exporters decide to change their sources and supply 1 Exporting firm gains little experience from transactions handled by others
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1-6 15-6 Non-Equity Mode Non-Equity Mode h Direct exporting refers to the exporting of goods and services by some entity within the producing firm 1 Sales company 1 Business established to market goods and services produced by others 1 Internet has simplified direct exporting 1 Cost of trial low
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1-7 15-7 Non-Equity Mode Non-Equity Mode Turnkey Projects Turnkey Projects h Turnkey projects are used to export 1 technology 1 management expertise 1 capital equipment (some cases) 1 Exporter of a turnkey project may be a 1 contractor that specializes in designing and erecting plants in a particular industry
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This note was uploaded on 12/17/2010 for the course INBS 346 taught by Professor Ike during the Fall '10 term at Montclair.

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INBS 346--Chapter 15, Ball et al - Chapter Fifteen Chapter...

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