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Chapter 9 - Chapter 9 Market entry modes as strategic...

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Chapter 9 Market entry modes as strategic decisions o o It depends on: Vision, Attitude toward risk, Available investment capital, How much control is desired Exporting o Nature: o Advantages: o Disadvantages Licensing o Nature : is a contractual arrangement whereby one company (the licensor) makes a legally protected asset available to another company (the licensee) in exchange for royalties, license fees, or some other form of compensation o Advantages : First, because the licensee is typically a local business that will produce and market the goods on a local or regional basis, licensing enables companies to circumvent tariffs, quotas, or similar export barriers. Second, when appropriate, licensees are granted considerable autonomy and are free to adapt the licensed goods to local tastes. Provides additional profitability with little initial investment Provides method of circumventing tariffs, quotas, and other export barriers Attractive ROI Low costs to implement License agreements should have cross-technology agreements to inequities o Disadvantages : Limited participation
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