these are different entry strategies of companies to go global. also specified the need to go global and the time when the operations should be stopped in an international business,

1. Entry Strategies in International Markets
Jostin S
Adi shankara Institute of
Management and Technology
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2. Introduction
• The need for entering a foreign market is a strategic
management decision.
• A firm may enter in overseas markets to prolong
product life cycle. Products may be at a decline stage
in the home market, but may have growing demand
in overseas markets, especially in the least developed
countries.
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3. Other factors
• Saturation in local markets.
• Competitors.
• New economic grounds.
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4. Introduction
• Global marketers have to make a multitude of decisions
regarding the entry mode which may include:
• the target product/market
• the goals of the target markets
• the mode of entry
• the time of entry
• a marketing-mix plan
• a control system to check the performance in the entered
markets
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5. Target Market Selection
• A crucial step in developing a global expansion
strategy is the selection of potential target markets.
• A four-step procedure for the initial screening
process:
1. Select indicators and collect data
2. Determine importance of country indicators
3. Rate the countries on each indicator
4. Compute overall score for each country
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6. Exporting
• Exporting is the process of selling of goods and
services produced in one country to other countries.
• Export brings in revenue to the firm.
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7. Direct export
• Direct exports represent the most basic mode of
exporting made by a (holding) company.
• Direct export works the best if the volumes are
small. The main characteristic of direct exports entry
model is that there are no intermediaries.
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8. Advantages
• Control over selection of foreign markets and
choice of foreign representative companies
• Good information feedback from target market,
developing better relationships with the buyers
• Better protection of trademarks, patents,
goodwill, and other intangible property
• Potentially greater sales, and therefore greater
profit, than with indirect exporting
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9. Disadvantages
• Higher start-up costs and higher risks as opposed to
indirect exporting
• Requires higher investments of time, resources and
personnel and also organisational changes
• Greater information requirements
• Longer time-to-market as opposed to indirect
exporting
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10. Indirect export
• Indirect exports is the process of exporting through
domestically based export intermediaries. The
exporter has no control over its products in the
foreign market.
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11. Advantages
• Fast market access
• Concentration of resources towards production
• No direct handle of export processes
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12. Disadvantages
• Higher risk than with direct exporting
• Little or no control over distribution, sales,
marketing, etc. as opposed to direct exporting
• Inability to learn how to operate overseas
• Wrong choice of market and distributor may
lead to inadequate market feedback affecting
the international success of the company
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13. • Infosys
• Cipla ltd
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14. Licensing
• A firm in one country allows a firm in other country to use its
intellectual property.
• The licensee will have to pay royalty to use the property.
• Benefits:
• Appealing to small companies that lack
resources
• Faster access to the market
• Rapid penetration of the global markets
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15. Licensing
• Disadvantages :
• Licensee may not be committed
• Lack of enthusiasm on the part of a licensee
• Licensee may become a future competitor
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16. Licensing
• In India for CoCa Cola the bottling license is given to
Hindustan coca cola beverages ltd.
• Covers approximately 65% of bottling operations for the
Coca-Cola System in India.
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17. Franchising
• There will be a parent company ,who will allow an
independent entity to do business in a prescribed form.
• Franchisor and the franchisee
• This right allows to use the franchisor’s product, name,
production techniques, marketing techniques etc.
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18. • Benefits:
• Overseas expansion with a minimum
investment
• Franchisees’ profits tied to their efforts
• Availability of local franchisees’
knowledge
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19. Franchising
• Drawbacks :
• Revenues may not be adequate
• Limited franchising opportunities overseas
• Lack of control over the franchisees’ operations
• Problem in performance standards
• Cultural problems
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20. • Dominos pizza – managed by Jubilant foodworks ltd.
• Have rights to operate in India, Bangladesh, Sri lanka,
Nepal.
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21. Contract Manufacturing
• A company does international marketing contract
with firms in foreign countries to manufacture,
assemble products while retaining the rights to
market those products.
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22. Contract Manufacturing
• Benefits:
• Labor cost advantages
• Savings via taxation, lower energy
costs, raw materials, and overheads
• Lower political and economic risk
• Quicker access to markets
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23. Contract Manufacturing
• Drawbacks :
• Contract manufacturer may become a
future competitor
• Lower productivity standards
• Issues of quality and production standards
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24. Contract Manufacturing
Qualities of an ideal subcontractor:
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Flexible/geared toward just-in-time delivery
Able to meet quality standards
Solid financial footings
Able to integrate with company’s business
Must have contingency plans
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25. • Nike has a contract manufacturing for its textiles.
The major part of clothing is prepared in Tirupur,
India.
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26. Joint Ventures
• Cooperative joint venture
• share revenues, expenses and assets.
• both parties are equally invested in the project in
terms of money, time, and effort
• Benefits:
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Higher rate of return and more control over the operations
Sharing of resources
Access to distribution network
Contact with local suppliers and government officials
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27. Joint Ventures
• Drawback:
• Lack of control
• Lack of trust
• Conflicts arising over matters such as
strategies, resource allocation, transfer
pricing, ownership of critical assets like
technologies and brand names
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28. Joint Ventures
• Drivers Behind Successful International Joint Ventures :
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Pick the right partner
Establish clear objectives from the beginning
Bridge cultural gaps
Gain top managerial commitment and respect
Use incremental approach
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29. • Bharti Walmart between bharti enterprises and
walmart
• Sony-Ericsson is a joint venture by the Japanese
consumer electronics company Sony Corporation
and the Swedish telecommunications company
Ericsson to make mobile phones
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30. Mergers and Acquisitions
Provides instant access to markets and distribution
network.
It is a corporate strategy of dealing with the buying,
selling, dividing and combining of different
companies and similar entities that can help an
enterprise grow rapidly in its sector
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31. • Benefits:
• Greater control and higher profits
• Strong commitment to the local
market on the part of companies
• Allows the investor to manage and
control marketing, production, and
sourcing decisions
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32. • The take over of Land rover and Jaguar by TATA is
an example.
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33. Timing of Entry
• International market entry decisions should
also cover the following timing-of-entry
issues:
• When should the firm enter a foreign market?
• Other important factors include: level of international
experience, firm size
• Mode of entry issues, market knowledge, various economic
attractiveness variables, etc.
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34. Exiting a Market
• Reasons for exit:
• Sustained losses
• Volatility
• Premature entry
• Ethical reasons
• Intense competition
• Resource reallocation
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35. Thank You
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