D 300 exam 3 Ch 15 Entry and Strategic Alliances
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Favorable countries to enter
there are 196 nation in the world. Ultimately the choice must come down to long run profitability
first mover advantage
the advantage of entering a market early. ____ is the ability to preempt rivals and capture demand by establishing a strong brand name.
first mover disadvantages or pioneering cost
cost that an early entrant has to bear that a later entrant can avoid. Pioneering cost arise when the business system in a foreign country is so different from that in a firms home market that the enterprise has to devote considerable, time effort and cost
exporting (advantages and disadvantages)
- Advantage- 1 it avoid the often substantial cost of establishing manufacturing operations in host country. 2 exporting may help a firm achieve experience curve and location economies
- Disadvantages- may cost a firm more money, make for a higher transportation cost, there can also be tariff barrier to deal with
the contractor agrees to handle every detail of the project for a foreign client, including the training of operating personnel.
Licensing agreement (adv vs disa )
- is an arrangement whereby a licensor grants the rights to intangible property to another entity for a specific period, and in return, licensor receives a royalty fee
- Adv- the liscenee put up most of the capital so the licensor just set back and get royalty
- Dis- you don't have control over the manufacture, you don't have control over strategi, also you might be giving away technology
Franchising (adv vs dis)
- is basically a specialized from of licensing in which the franchiser not only sells intangible property to the franchisee but also insist that the franchisee agree to strict rules as to how to do business
- Adv- the firm is relieved of most of the cost to operate in foreign markets
- Dis- quality control main disadvantage
Joint ventures (adv vs dis)
- entails establishing a firm that is jointly owned by two or more otherwise independent firms
- Adv- they can benefit from a local partners knowledge culture, language, or political system
- Dis-they might be give away technology to partner
Strategic Alliance : (advantages)
refer to cooperative agreements between competitor or actual competitors.
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