Chap014 - Chapter 14 Entry Strategy and Strategic Alliances...

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Chapter Entry Strategy and Strategic Alliances 14
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Case: Diebold Began to sell ATM machines in foreign markets in 1980’s 1980’s Distribution agreement with Philips 1990 Diebold establishes joint venture with IBM 1997 foreign sales 20% of Diebold’s total revenues Diebold decides to go it alone with local manufacturing presence for local customization Through acquisitions joint ventures
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Basic foreign expansion entry decisions A firm contemplating foreign expansion must make three decisions Which markets to enter When to enter these markets What is the scale of entry
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Which foreign markets Favorable Politically stable developed and developing nations Free market systems No dramatic upsurge in inflation or private- sector debt Unfavorable Politically unstable developing nations with a mixed or command economy or where speculative financial bubbles have led to excess borrowing
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Timing of entry Advantages in early market entry: First-mover advantage. Build sales volume. Move down experience curve and achieve cost advantage. Create switching costs. Disadvantages: First mover disadvantage - pioneering costs. Changes in government policy.
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Scale of entry Large scale entry Strategic Commitments - a decision that has a long-term impact and is difficult to reverse. May cause rivals to rethink market entry.
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This note was uploaded on 09/08/2011 for the course MGNT 3650 taught by Professor Grimes during the Spring '11 term at Georgia Southwestern.

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Chap014 - Chapter 14 Entry Strategy and Strategic Alliances...

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