Dry Wall Rx
approaches the foreign market
What are my options when approaching the foreign market?
• Exporting- selling directly into the market.
• Franchising – a network of interdependent business relationships that
allows a number of people to share a brand, a method of business or
• Licensing- a firm transfers the rights to the use of a product or service.
• Sub contracting- employ a business or person outside the county to do the
work in the other country.
• Joint ownership- partnership that involves the creation of a third party
independently managed company.
• Direct investment- is a controlling ownership in a business enterprise by an
entity based in another country.
Advantages and disadvantages of exporting
• The profits are greater because you
are cutting out the middle man. You
are handling the market research,
foreign distribution, logistics of
shipment and collecting payments
• You have greater control over all
aspects of transactions.
• It is the most traditional and well
established form of operating in
• It’s going to take more of your time and
energy dealing with it directly.
• You are held accountable.
• Lack of market information.
• Production adaption.
Advantages and disadvantages of franchising
• Proven trade mark, you'll have a recognized
brand name. which helps with advertising.
• You pay someone to come up with a
business model so that’s something you
don’t have to deal with.
• Franchises offer the independence of small
business ownership supported by
the benefits of a big business network.
• The franchisor gives you support, and helps
you with training. Helps you understand the
• Costs may be high. The initial costs of
buying the franchise while also paying
continuing management service fees.
• The franchise has restrictions on how you
run the business so you won’t have as much
freedom or control.
• The franchisor may go out of business.
• If you ever wanted to sell your franchise it
would be difficult because you can only sell
to someone approved by the franchisor.
• All profits are shared with the franchisor.
Advantages and disadvantages of licensing
• Good way to start low risk operations in a
• Capital is not tied up in foreign operation.
• Low cost.
• It helps with barriers of tariffs and quotas.
• It helps with profitability with very little
• Limited participation.
• Returns may be lost.
• Lack of control.
• Licensee may become the
• Licensee may exploit the
company's idea and resources.
Advantages and disadvantages of joint ownership
• Allows partners to share their
strengths and ideas.
• You share the risk.
• You share the workload.
• Access to new markets and
• Share rewards and profits.
• Potential conflict if you see things
• Partner could break off and become a
• Having to deal with different working
• Success relies on thorough research
and analysis of the objectives.
Advantages and disadvantages of direct investment
• Easy international trade.
• Employment and economic
• Tax incentives.
• Access to markets.
• Reduces cost of production.
• Economic non-viability.
• Risk of political challenges.
• Countries may be against
foreign ownership in
So what is the best approach?
In my opinion I think the best approach for Robert to take would be exporting. Exporting is
the most traditional and low risk path to choose. There is a low investment start up and also
your products would be made domestically. This helps U.S jobs and also avoids the risks of
starting a business in another country. There could be cultural barriers, or some countries
don’t favor foreign ownership. Which is hard for direct investors. You would be avoiding this
by exporting. The risk to exporting is there could be trade barriers or tariffs. Due to the U.S
being one of the most significant economic markets while being the top three importers and
exporters this shouldn’t be too big of a problem. Any approach there is going to be risk.
Exporting is the less risky market entry for the wall Rx.
The product will be adaptable to many markets it wont a hard start up. Since the
product can contribute to many cultures, assuming most people in the countries you are
selling to are living in houses with walls the demand is high. Because of the demand and
great product it will be easy to sell. You wont need the help or ideas of another like a joint
venture or a franchise to help reorganize the product or get it off the ground. Because of the
benefits of the common product you should approach the market by yourself and maximize
your profits which adds to the reasons why exporting is the best choice.
Straight Extension or Product Adaptation?
Straight extension is the practice of
releasing an existing product without
making any changes to it while releasing
it to a foreign market.
Product adaption is the process
of modifying an existing product so
it is suitable for different customers
What’s best approach?
I think the best approach for wall doctor would be to keep the product
as it is, Straight extension. The product is quite simple and cant really
adapt or change to a culture. If people don’t live in a house or have
walls then the simply do not have demand for the product.
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