MGMT 3225 Lecture 13: Chapter 13 Entering the Foreign Market
Document Summary
Basic entry decisions: a firm contemplating foreign expansion must make three basic decisions, which markets to enter, when to enter those markets, on what scale. Market entry summary: the early large-scale entrant into a major developing nation may be able to capture significant first-mover advantages that will bolster its long-run position in that market. Entry modes: firms can use six different modes to enter foreign markets: exporting, turnkey projects, licensing, franchising, establishing joint ventures with a host-country firm, or setting up a new wholly owned subsidiary in the host country. Exporting: sale of products produced in one country to residents of another country. Licensing: licensing agreement: arrangement whereby a licensor grants the rights to intangible property to another entity (the licensee) for a specified period, and in return, the licensor receives a royalty fee from the licensee. Intangible property includes patents, inventions, formulas, processes, designs. Ability to realize location and experience curve economies.
