Good E vening! INB3107 International Business Management December 2016/J anuary 2017 Ulrich Werner
When, where, and how to enter a foreign M arket? International Business M anagement
L ots of Questions to considere • M odes of entry? • Which foreign country (first)? • When?
First M over Advantage • How to structure and organize your firm to enter a new market • First mover advantage – Brand recognition – Establishing yourself in the market – Learn about national practices, norms, culture, customers and their preferences, etc. – Example: Apple’s iPad in the touch-screen tablet market
Apple Newton vs. Palm Pilot
L ate M over Advantage • Late (or second) mover advantage – Be able to learn from the mistakes of the first mover – First mover may have established his brand that is difficult to overcome – Examples: Coca-Cola vs. Pepsi-Cola, Pizza Hut vs. national chains (Thailand, M exico and others)
Conclusion: Timingis an important Decision, how, when, and where to enter But nobody can predict success. Do your research and learn from your customers.
M odes of Entry – the ‘How’
Factors of Entry M odes
How would YOU start your new Energy Drink?
L icensing • Licensing includes franchising – M ore committed than exporting – Higher profit potential – Less risky than direct investment – Example: Ramkhamhaeng University bags & neckties – Example: M arriot Hotels, Pizza Hut, CP-All, etc. – Franchise fee usually about 4 to 6 % of gross sales
J oint Venture and Direct Investment • Joint venture is often a type of direct investment • Learning curve reduced since local partner knows the market
Thank you for your attention!
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