Assembling is a compromise between exporting and foreign manufacturing. The firm produces domestically all or most of the components or ingredients of its product and ships them to foreign markets to be put together as a finished product.
2. Prepared By
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Manu Melwin Joy
Assistant Professor
Ilahia School of Management Studies
Kerala, India.
Phone – 9744551114
Mail – manu_melwinjoy@yahoo.com
3. Entry Strategies
• Market entry
strategy is
influenced by the
firm and product
characteristics and
the domestic and
international market
characteristics.
4. Foreign Market Entry and Operations Strategies
Exporting
• Direct Exporting.
• Indirect Exporting.
Contractual Agreement
• Licensing & Franchising.
• Strategic Alliance.
• Contract Manufacturing.
Production facility in foreign
market.
• Assembly Operations.
• Wholly owned
manufacturing facility.
• Joint Ventures.
Mergers and Acquisitions
5. Assembly Operations
Assembling is a
compromise between
exporting and foreign
manufacturing. The firm
produces domestically all
or most of the
components or
ingredients of its product
and ships them to foreign
markets to be put
together as a finished
product.
6. Assembly Operations
By shipping CKD
(completely knocked
down), the firm is saving on
transportation costs and
also on custom tariffs which
are generally lower on
unassembled equipment
than on finished products.
Another benefit is the use
of local employment which
facilitates the integration of
the firm in the foreign
market.
7. Example
Notable examples of
foreign assembly are the
automobile and farm
equipment industries. In
similar fashion, Coca-Cola
ships its syrup to foreign
markets where local bottle
plants add the water and
the container.
