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448 Week 5 Final Quiz - Patrick Lowery MGT 448 Professor...

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Patrick Lowery MGT 448 Professor Solomon June 12, 2011 Describe the different modes of entry that companies use to do global business. When entering into a market an organization must think about the mode to adapt in order to enter into the marketplace. These issues include resources and investments needed to enter the market. The type of corporate control the organization can have in the foreign market. The organization must think about how much knowledge they can gain to be competitive in the foreign marketplace. The type of market entry includes exporting, franchising, joint ventures, and strategic alliances. There are many advantages of exporting. For example, manufacturing is home-based. It gives an opportunity to learn overseas markets before investing in bricks and mortar and setting up a company abroad. This then reduces the potential risks of operating overseas. There is minimum risk and investment because of the lack of investment in the production facilities. The disadvantage of exporting is mainly trade barriers and tariffs the host country may impose on the organization. Trade barriers and tariffs are added to the cost, as well as transport costs. Exporting methods include direct or indirect export. In direct exporting, the organization may use an agent, distributor, or overseas subsidiary. Indirect marketing and direct marketing are a firm’s two options for carrying out exporting. Franchising is a contractual agreement between a franchisor and a franchisee, which allows the franchisee to conduct a given form of business under the established name. The United States have many franchising brands
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throughout the world. The basic product sold by the franchiser is a well-recognized brand name,
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