Entering Foreign Markets 12 chapter Entering Foreign Markets McGraw-Hill/Irwin Global Business Today, 5e © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.

Chapter 12: Entering Foreign Markets INTRODUCTION A firm expanding internationally must decide: which markets to enter when to enter them and on what scale how to enter them (the choice of entry mode)

Chapter 12: Entering Foreign Markets There are several options including: exporting licensing or franchising to host country firms setting up a joint venture with a host country firm setting up a wholly owned subsidiary in the host country to serve that market

Chapter 12: Entering Foreign Markets BASIC ENTRY DECISIONS There are three basic decisions that a firm contemplating foreign expansion must make: Which Foreign Markets? Timing of Entry Scale of Entry and Strategic Commitments Summary

Chapter 12: Entering Foreign Markets ENTRY MODES These are six different ways to enter a foreign market. Exporting Turnkey Projects Licensing Franchising Joint Ventures Wholly Owned Subsidiaries

Chapter 12: Entering Foreign Markets SELECTING AN ENTRY MODE The optimal choice of entry mode involves trade-offs. Core Competencies and Entry Mode Pressures for Cost Reduction and Entry Mode

Chapter 12: Entering Foreign Markets GREENFIELD VENTURE OR ACQUISITION? Should a firm establish a wholly owned subsidiary in a country by building a subsidiary from the ground up (greenfield strategy), or should it acquire an established enterprise in the target market (acquisition strategy)?

Chapter 12: Entering Foreign Markets Pros and Cons of Acquisitions Pros and Cons of Greenfield Ventures Greenfield or Acquisition