Font size
Worksheets12. Entry Strategies and Strategic Alliances
Total questions: 14
Worksheet time: 7mins
There are several advantages associated with entering
a national market early before other international businesses have established themselves. This is known as First-mover advantage which is ...
...the ability to use technology and financial investment in a new market.
...the ability to preempt rivals and capture demand by establishing a strong brand name and customer satisfaction.
The most attractive foreign markets tend to be
found in politically stable developed and developing
nations that have free market systems.
True
False
The next are entry modes to foreign markets
Exporting
Franchising
Owned subsidiary
All of them
Exporting
Direct exporting involves selling directly to the customer in the target country, while indirect exporting uses intermediaries.
Exporting allows a firm to grant its technology, patents, or trademarks to a foreign company for a fee.
Disadvantages of exporting
include high transport costs, trade barriers, and
problems with local marketing agents.
True
False
Franchise allows a firm to grant its technology, patents, or trademark, business method, and brand su to a foreign company for a fee.
True
False
Joint venture mode involves the highest level of investment but provides full control over operations. It can be established either by setting up a new operation (Greenfield investment)
True
False
Joint venture
Involves finding a local partner to share costs and risks.
It offers the advantage of local knowledge but requires sharing control and profits.
Non of them
This mode involves the highest level of investment but provides full control over operations. It can be established either by setting up a new operation (Greenfield investment) or by acquiring an existing business in the host country.
Exporting
Franchise
Wholly owned subsidiary
Licensing
...involve a company buying an existing firm in the target foreign market.
Acquisition
Greenfield Ventures
... are when a company builds its own subsidiary from scratch in the target foreign market.
Acquisition
Greenfield Ventures
These are characteristics of ....:
–Investment: High investment, requires financial and human resources.
–Speed: Acquisitions allow a company to have an immediate presence in the new market.
–Market Access: The acquired company comes with its customer base and market share.
–Established Infrastructure: Facilities, employees, and systems are already in place.
–Cultural Integration Challenges: The acquiring company may face difficulties in merging different corporate cultures.
Acquisitions
Greenfield Ventures
These are characteristics of ....:
–Control: Offers complete control over operations and business strategies.
–Customization: Can tailor the new venture to suit specific needs and standards of the company.
–Long-term Investment: Generally, involves a longer timeframe to become operational and profitable.
–High Initial Costs: Substantial initial capital investment is required.
Acquisitions
Greenfield Ventures
Benefits of Strategic alliances:
enable resource sharing, risk mitigation, and access to new technologies or competencies. They can be particularly effective in industries where technological advancements are rapid and costly.
True
False
