GMS 723 Lecture Notes - Lecture 8: Fuji Xerox, Royalty Payment, Experience Curve Effects
24 Mar 2016
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The opimal choice of entry mode varies from situaion to situaion depending upon these various factors. Which foreign markets: the choice between diferent foreign markets must be made on an assessment of their long-term proit potenial. It is likely to be least favourable in the case of poliically unstable developing naions that operate with a mixed or command economy, or developing naions where speculaive inancial bubbles have led to excess borrowing. Timing of entry: once a set of atracive markets has been ideniied, it is important to consider the iming of entry. These are commonly known as irst mover advantages. One irst mover advantage is the ability to pre-empt rivals and capture demand by establishing a strong brand name. A second advantage is the ability to build up sales volume in that country and ride down the experience curve ahead of rivals. To the extent that this is possible, it gives the early entrant a cost advantage over later entrants.
