Asked by Brandt Cortina on May 16, 2024
Verified
What are the market entry strategy options available to a company seeking to enter the global marketplace? How do they relate to each other in terms of profit potential, risk, financial commitment required, and marketing control?
Market Entry Strategy
The strategic approach to providing products or services to a new audience and distributing them within that market.
Profit Potential
The capacity of a business or investment to generate earnings over time.
Marketing Control
The process of monitoring, evaluating, and adjusting marketing strategies and activities to meet set objectives.
- Distinguish among multiple strategies for entering markets, including joint ventures and direct investments, along with their advantages and disadvantages.
Verified Answer
KN
Kendra NewmanMay 16, 2024
Final Answer :
Once a company has decided to enter the global marketplace, it may select one of four strategies: (1) exporting, which involves producing goods in one country and selling them in another country; (2) licensing, where a company offers the right to a trademark, patent, trade secret, or other similarly valued items of intellectual property in return for a royalty or a fee; (3) joint venture, which involves a foreign company and a local firm investing together to create a local business; and (4) direct investment, which entails a domestic firm actually investing in and owning a foreign subsidiary or division. The amount of financial commitment, risk, marketing control, and profit potential increases as the firm moves from exporting to direct investment. See Figure 7-4.
Learning Objectives
- Distinguish among multiple strategies for entering markets, including joint ventures and direct investments, along with their advantages and disadvantages.