Modes of Global Market Entry

7/21/2019 Modes of Global Market Entry

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GLOBAL ENTRYSTRATEGIES



DIFFERENT MODES OF MARKETENTRY



Diferent modes o entry

EXPORTING

-indirect e!ortin"

-direct e!orts

-intr#-cor!or#tetr#nsers

$I%ENSING

FRAN%&ISING

SPE%IA$ MODES-%ontr#ctm#n'#ct'rin"-M#n#"ement%ontr#cts-T'rn(ey !ro)ects Forei"n Direct

In*estment+FDI,

oint .ent'res



Forms o E!ortin"

Indirect

e!ortin"

Direct

e!ortin"

Intr#-cor!or#tedtr#nser



5

Indirect involvement me#ns t/#tt/e 0rm !#rtici!#tes in intern#tion#1

2'siness t/ro'"/ #n intermedi#ry#nd does not de#1 3it/ orei"nc'stomers or m#r(ets4

Direct involvement me#ns t/#t t/e0rm 3or(s 3it/ orei"n c'stomers orm#r(ets 3it/ t/e o!!ort'nity to

de*e1o! # re1#tions/i!4

Forms o E!ortin"



Indirect E!ortin"



16-7

E!ortin" o "oods #nd ser*icest/ro'"/ *#rio's /ome-2#sede!orters

M#n'#ct'rers5 e!ort #"ents

E!ort commission #"ents

E!ort merc/#nts Intern#tion#1 0rms

Indirect E!ortin" 6 E"4



Direct E!ortin"



Intr#-cor!or#te Tr#nser



E!ortin"



Licensing is 3/en # 0rm7 c#11ed t/e licensor71e#ses t/e ri"/t to 'se its inte11ect'#1 !ro!erty8tec/no1o"y7 3or( met/ods7 !#tents7

co!yri"/ts7 2r#nd n#mes7 or tr#dem#r(s8to#not/er 0rm7 c#11ed t/e licensee7 in ret'rn or# ee4

The property license !"y incl#e$

P#tents Tr#dem#r(s %o!yri"/ts Tec/no1o"y

Tec/nic#1 (no3-/o3 S!eci0c 2'siness s(i11s

Licensing



The Licensing %rocess



9#sic Iss'es inIntern#tion#1 $icensin"

S!eciyin" t/e 2o'nd#ries o t/e#"reement

Determinin" com!ens#tion Est#21is/in" ri"/ts7 !ri*i1e"es7 #nd

constr#ints

S!eciyin" t/e d'r#tion o t/e contr#ct

E"4 Pe!sico7 %o(e 9ott1in" P1#nt



TokyoDisneyland is

owned and

operated by a

Japanese

development

company under

license fromWalt Disney

Company



Under franchising, an independent organisation

called the franchisee operates the business

under the name of another company called the

franchisor.

In such an arrangement the franchisee pays a

fee to the franchisor.

Franchising is a form of Licensing but the

Franchisor can exercise more control over the

Franchisee as compared to that in Licensing.

Fr#nc/isin"



Fr#nc/isin" A"reements

Fr#nc/isee /#s to !#y # 0ed #mo'nt#nd roy#1ty 2#sed on s#1es4

Fr#nc/isee s/o'1d #"ree to #d/ere to

o11o3 t/e r#nc/isor5s re:'irements Fr#nc/isor /e1!s t/e r#nc/isee in

est#21is/in" t/e m#n'#ct'rin" #ci1ities

Fr#nc/isor #11o3s t/e r#nc/isee somede"ree o ;ei2i1ity4

E"4 McDon#1ds7 S'23#y7 KF%





S!eci#1i=ed Entry Modes



%ontr#ct m#n'#ct'rin"

%ontr#ct m#n'#ct'rin" is o'tso'rcin" entireor !#rt o m#n'#ct'rin" o!er#tions4

E4"4> !/#rm#ce'tic#1s7 Person#1 %#re!rod'cts etc

T/e iP#d #nd iP/one7 3/ic/ #re !rod'ctsrom A!!1e Inc47 #re m#n'#ct'red in %/in#

2y Foconn4 &ence7 Foconn is # contr#ctm#n'#ct'rer #nd A!!1e 2ene0ts rom #1o3er cost o m#n'#ct'rin" de*ices

http://en.wikipedia.org/wiki/Apple_Inc.

http://en.wikipedia.org/wiki/Foxconn

http://en.wikipedia.org/wiki/Foxconn

http://en.wikipedia.org/wiki/Apple_Inc.



A m#n#"ement contr#ct is #n #"reement2et3een t3o com!#nies 3/ere2y onecom!#ny !ro*ides m#n#"eri#1 #ssist#nce7

tec/nic#1 e!ertise #nd s!eci#1isedser*ices to t/e second com!#ny or #cert#in !eriod o time in ret'rn ormonet#ry com!ens#tion4

E"4 Sc/oo1s7 s!orts #ci1ities7 /os!it#1s7o?ce 2'i1din"s7 m#11s #nd 1#r"e 2'sinesses/#*e on-site c#eteri#s7 rest#'r#nts4

M#n#"ement %ontr#ct



A t'rn(ey !ro)ect is # contr#ct 'nder3/ic/ # 0rm #"rees to '11y desi"n7constr'ct #nd e:'i! #

m#n'#ct'rin"@2'siness@ser*ice#ci1ity #nd t'rn t/e !ro)ect o*er to t/e

!'rc/#ser 3/en its re#dy or

o!er#tion7 or # rem'ner#tion4

T'rn(ey Pro)ect



FOREIGN DIRE%T IN.ESTMENT

A direct in*estment into!rod'ction or 2'sinessin # co'ntry 2y #nindi*id'#1 or com!#ny in#not/er co'ntry7 eit/er2y 2'yin" # com!#ny int/e t#r"et co'ntry or 2ye!#ndin" o!er#tions o

#n eistin" 2'siness int/#t co'ntry

Mer"ers #nd #c:'isitions

&&



'erger $ T/e com2inin" o t3o or morecom!#nies7 "ener#11y 2y oferin" t/estoc(/o1ders o one com!#ny sec'rities in

t/e #c:'irin" com!#ny in ec/#n"e or t/es'rrender o t/eir stoc(4

Ac(#isition $ /en one com!#ny t#(es o*er

#not/er #nd c1e#r1y est#21is/ed itse1 #s t/e ne3o3ner7 t/e !'rc/#se is c#11ed #n #c:'isition4

&DF% 9#n( #c:'isition o %ent'rion 9#n( oP'n)#2 or BC4 2i11ion

Mer"ers #nd Ac:'isitions



A )oint *ent're is #n entity ormed 2et3eent3o or more !#rties to 'ndert#(e economic#cti*ity to"et/er4 T/e !#rties #"ree to cre#te

# ne3 entity 2y 2ot/ contri2'tin" e:'ity7#nd t/en t/ey s/#re in t/e re*en'es7e!enses7 #nd contro1 o t/e enter!rise4

Sony-Ericsson is # )oint *ent're 2y t/e

#!#nese cons'mer e1ectronics com!#nySony %or!or#tion #nd t/e S3edis/te1ecomm'nic#tions com!#ny Ericsson tom#(e mo2i1e !/ones

oint .ent'res



T&ANK YO

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Modes of Global Market Entry