StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Country Selection: Modes of Entry - Essay Example

Cite this document
Summary
Globalization I would start this paper by pointing out that there are four major modes of entry such as exporting, franchising, joint venture and green field. The first option is exporting the wheat to Morocco where there has been considerable shortage because of rising consumption and shrinking production…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER93.3% of users find it useful
Country Selection: Modes of Entry
Read Text Preview

Extract of sample "Country Selection: Modes of Entry"

Globalization I would start this paper by pointing out that there are four major modes of entry such as exporting, franchising, joint venture and green field. The first option is exporting the wheat to Morocco where there has been considerable shortage because of rising consumption and shrinking production. Nevertheless, this is the most feasible option for entering in Moroccan market because grains abundant nations usually choose exporting (traditional method) because they enjoy an advantage due to price inelastic nature of wheat, rice, sugarcane etc.

Also, exporting does not require any establishment of production / sales facilities in the chosen target market in short run. I would give 9.5 points out of 10 to this option on the basis of aforementioned analysis. The second possible mode of entry is known as Joint Venture that refers to creating a partnership or profit-sharing agreement with a domestic investor or business group for producing / selling the goods and services. Since our chosen product is wheat, it would not be much lucrative of getting involved into a joint venture because the product has inelastic demand and the vendors do not face any difficulties / complexities in selling wheat to consumers.

Quite unequivocally, this option would have been adopted if there had been cutthroat competition in the Moroccan market and it had been difficult to create market for innovative / new products and succeed without assistance of local partners. I would give 3 points out of 10 to this option on the basis of aforementioned analysis. The third possible mode of entry is known as Franchising that refers to getting involved with business relationships with local parties (called franchisees) which form retail stores for selling franchisor’s products at agreed upon business terms and conditions.

Nevertheless, the grain exporters never have franchising agreements to sell their products only at certain franchises. Rather, wheat products are sold at all grocery stores, supermarkets and specialized wheat shops (for wheat only) across chosen cities. Hence, franchising is also an inappropriate option and I would give 3 points out of 10 in the light of aforementioned reasons. The fourth option is known as Green Field venture, which is about setting up a new company / subsidiary from scratch in a foreign market.

Indeed, this is considered as the most risky option by business pundits because of relatively high financial liability and certain management difficulties (language barriers, culture, societal values and traditions) encountered during setting up a new firm from scratch. However, in this scenario, we could establish a new registered grain trading company because shortages persist in Moroccan grain market. In addition, this option would be quite beneficial if we opt to enhance our sales volume for wheat only as well as to commence trade of other agricultural products such as cotton, rice, sugarcane etc.

For instance, the profits could be maximized because wheat will first be imported from USA and then sold by our Moroccan subsidiary in domestic market, thereby eradicating role of importer and middleman. However, this option is exclusively for long run so I would give 8.5 points out of 10.

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Country Selection: Modes of Entry Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
Retrieved from https://studentshare.org/other/1408276-country-selection-modes-of-entry
(Country Selection: Modes of Entry Essay Example | Topics and Well Written Essays - 500 Words)
https://studentshare.org/other/1408276-country-selection-modes-of-entry.
“Country Selection: Modes of Entry Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.org/other/1408276-country-selection-modes-of-entry.
  • Cited: 0 times

CHECK THESE SAMPLES OF Country Selection: Modes of Entry

Factors and Issues That Are Faced for Making the Choice of the Mode of International Market Entry

The paper "Factors and Issues That Are Faced for Making the Choice of the Mode of International Market Entry" includes the factors or circumstances under which the organizations must prefer to internationalize via foreign direct investment rather than the other modes of internationalization.... So the main factor that is included for the use of the FDI as a source of international investment over other modes of internationalization is the element of control on the policies and decisions of management (Zekiri and Angelova 2011)....
7 Pages (1750 words) Term Paper

Market Entry Strategy of Retailer in China - The Case of Walmart

Globalization of Wal-Mart – Market entry Strategy in China ABSTRACT Globalization of the economy facilitated business across borders and retailers tried to take early mover advantages.... To evaluate the entry mode choice Wal-Mart was selected for this study, being the largest global retailer.... Since the outcome of any foreign venture depends upon the initial entry mode, Wal-Mart's entry mode has been evaluated.... While the timing of the entry was perfect (weak retail sector and high potential in China), Wal-Mart tried to impose its home market strategies which did not work in the Chinese business environment....
56 Pages (14000 words) Dissertation

International Business Strategy

hellip; The paper analyzes the internationalization strategy required in identifying and selecting a suitable country in Europe that will best meet the major objectives of Indian Motors in terms of both technology and manufacturing aspects.... He emphasizes that the prosperity and opulence of a country do not stem out of its national inheritance or bequests or for that matter a nation's labor resources, its currency value or the interest rates....
13 Pages (3250 words) Case Study

The entry strategy mode for NEXT to Expand into China

This research project investigates the current literature on the internationalisation process and reviews alternative modes of market entry strategy.... It should be noted that due to certain limitations imposed by environmental and internal factors, the findings of this research cannot be utilized in terms of all market expansions, although they can be amply used as an example for further theory building in the area related to the Chinese market entry and expansion strategies....
37 Pages (9250 words) Essay

Corporate Activities in Foreign Countries

(2002, 39) ‘firms face three interlocking questions with regard to international expansion: what market to enter (entry location), how to enter (mode of entry), and when to enter (timing of entry)'.... Much of the early literature on foreign market entry concerned ‘the choice between exporting and FDI; The cost-based view of this decision suggested that the firm must possess a "compensating advantage" in order to overcome the "costs of foreignness"; This led to the… tion of technological and marketing skills as the key elements in successful foreign entry; Sequential modes of internationalization were introduced by Vernons "Product Cycle Hypothesis" (1966), in which firms go through an exporting phase before switching first to FDI, and then to cost-orientated FDI; Technology and marketing factors combine to explain standardization, which drives location decisions' (Buckley et al....
9 Pages (2250 words) Essay

Strategies of Starbucks in Entering the Emerging Market of North Korea

According to the study of Chen and Mujtaba (2007), the entry mode factors considered for the expansion strategy are based on the transaction cost model and can be considered the most critical step in the global expansion process (Chen and Mujtaba, 2007, p.... The transactional cost model states that the implementation cost of an entry mode is a critically relevant factor in choosing the entry mode for implementation.... According to the work presented by Tang and Liu (2011), the evaluation of the foreign markets and the selection of the entry mode are the two most critical steps in the global expansion process of any company (Tang and Liu, 2011, p....
8 Pages (2000 words) Case Study

Dunning's Model

In this paper, the strengths of the OLI (ownership, location, internalization) model developed by John Dunning to the study of FDI are appreciated whiles examining the limitations of the model in designing an international corporate strategy for firms.... hellip; Due to expanding international market opportunities that have come about as a result of globalisation, the need for firms of appreciable size to seek international business expansion continues to emerge and become prominent for sustainable business development....
7 Pages (1750 words) Literature review

Foreign Market Entry Strategy for Companies in European ATV Industry

This proposed research aims to evaluate, analyze and suggest the market entry strategy to CECTEK for the Western European market.... The market entry strategy may include the market entry mode and marketing strategies that suit the conditions of CECTEK....
22 Pages (5500 words) Term Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us