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IB 3101 (20)
Lecture 10

IB 3101 Lecture 10: Week 10 – Chapter 13 – Entry Strategy and Alliances

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International Business Admn
IB 3101
Susan Feinberg

Week 10 Chapter 13 Entry Strategy and Alliances Global expansion decisions Which markets to enter? Best ROI? When to enter and on what scale? Which entry mode to use The choice depends on: o Transport costs and trade barriers o Political and economic risks o Firm strategy Location choice: Favorable markets o Politically stable o Free market systems o Relatively low inflation rates o Low private sector debt Less favorable markets o Politically unstable developing nations with mixed or command economies o Developing nations where speculative financial bubble have led to excess borrowing Timing of Entry Early First mover advantages: o Preempt rivals and capture demand by establishing strong brand name o Ride down the experience curve o Create switching costs Tie customers into their products or services making it difficult for later entrants to win business First move disadvantages o Pioneering costs Business failure Promoting your product Scale of Entry Significant scale o Strategic commitment o Long term impact o Invest so much money, it is not easy to pull out of the market Small scale o Learn about a foreign market o Limiting exposure to new market
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