Professional Documents
Culture Documents
Should I Go
Abroad?
Which Markets
Should I Enter?
How Should I
Enter Them?
How Should I
Market My Product?
Learning Objectives:
Industry-specific factors
Industrys degree of internationalisation
Choice of entry mode by key competitors
Firm-Specific factors
Firms degree of internationalisation
Marketing objectives
Nature of product
Availability of resources
Different modes of entry possible
Shared risk, High risk,
Low risk, Shared control, High control,
Low control, Split Ownership
High flexibility Low flexibility
The Choice of Entry Modes: A Hierarchical Model
Source: Adapted from Y. Pan & D. Tse, 2000, The hierarchical model of market
entry modes (p. 538), Journal of International Business Studies, 31: 535554.
Strategic Decisions
On
Risk vs. Control
Exporting
High
Risk
Exporting
High
Risk
Licensing
Exporting
Advantages Disadvantages
Advantages of
Strategic Alliances
Gain Access to
Reduce
Distribution
Risk Exposure
Channels
Disadvantages of Strategic Alliances
Conflict Future
with Partners Competition
Joint Ventures
High
Joint Ventures
Risk
Licensing
Exporting
Advantages
of Joint Ventures
International
Defensive
Distribution
Reasons
Network
Disadvantages
of Joint Ventures
Conflict Loss of
with Partners Control
Investment
Modes of Entry
Direct Ownership
High
Direct Ownership
Joint Ventures
Risk
Licensing
Exporting
Advantages Disadvantages
Complete Expensive to
Managerial Control Start and Maintain