BUS 200 Lecture Notes - Lecture 7: Strategic Alliance, Joint Venture, Franchising
Business 200 notes lecture 7
Eight Modes of Entry
Exporting
Strategic Alliance
Joint Venture
Licensing
Franchise
Turn Key
Greenfield
Acquisition
When a company buys an existing company
Acquisition A/D
Advantages:
-You own the whole company
-Full control over all decisions
Disadvantages:
-Can create conflict when going global
-Requires a lot of commitment
Exporting
An export is a function of international trade whereby goods produced in one country are
shipped to another country
Exporting A/D
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Advantages:
-Less commitment
-Allows control over production
Disadvantages:
-Less risk, less reward
-More intensive marketing required
Strategic Alliance
A strategic alliance is an arrangement between two companies that have decided to share
resources to undertake a specific project
Strategic Alliance A/D
Advantages:
-No need to start a new company
-More agreeable with government
Disadvantages:
-Form a duo with possibly untrustable company
-Murky distribution
Joint Venture
is a business arrangement in which two or more parties agree to pool their resources for the
purpose of accomplishing a specific task
Joint Venture A/D
Advantages:
-Gain new capacity and enterprise
-Sharing rides with venture partners
Disadvantages:
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