Foreign market entry

Strategies for Foreign market entry

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Foreign market entry by Mind Map: Foreign market entry

1. LICENSING

1.1. another company in your target country to use your property

1.2. pay a fee in order to be allowed the right to use the property

1.3. requires very little investment ,can provide a high return on investment

1.4. take care of any manufacturing and marketing costs in the foreign market.

2. Franchising

2.1. somewhat similar to licensing in that intellectual property rights are sold to a franchisee

2.2. very strict

2.3. processes must be followed, specific components must be used in manufacturing

2.4. take your existing, successful business model, find a franchisee in your target market, build out the franchise, and open your doors.

3. Joint venture

3.1. two companies establishing a jointly-owned business

3.2. One of the owners will be a local business (local to the foreign market)

3.3. two companies would then provide the new business with a management team and share control of the joint venture

3.4. benefit of local knowledge of a foreign marketc,allows to share costs.

3.5. They link up and become invested in some sort of business project – the investment is almost always an equal 50/50, and profits are split accordingly. Usually, the two companies stay separate from each other, but work together on one particular venture to try and succeed.

4. Foreign direct investment

4.1. directly invest in facilities in a foreign market

4.2. It requires a lot of capital to cover costs such as premises, technology and staff

4.3. can be done either by establishing a new venture or acquiring an existing company.

4.4. sell directly to the market that you’re trying to break into

5. Wholly Owned Subsidiary

5.1. somewhat similar to foreign direct investment in that money goes into a foreign company

5.2. instead of money being invested into another company

5.3. foreign business is bought outright

5.4. . It is then up to the owners whether it continues to run as before or they take more control of .

6. Piggybacking

6.1. involves two non-competing companies working together to cross-sell the other’s products or services in their home country

6.2. low-risk method involving little capital

6.3. jumping on the back of your existing business relationship and trying to make it into international markets that way.

6.4. some companies may not be comfortable with this method as it involves a high degree of trust as well as allowing the partner company to take a large degree of control over how your product is marketed abroad