1. STRATEGIC THINKING AND PLANNING FOR BUSINESS
Strategy Evaluation

2. Learning Objectives Look into the assignment and what is required
Investigate market entry strategies
Evaluate dis-investment strategies

3. Introduction
The need for a solid market entry decision is an integral part of a global market entry strategy.
Entry decisions will heavily influence the firm’s other marketing-mix decisions.

4. Introduction
Global marketers have to make a multitude of decisions regarding the entry mode which may include:
the target product/market
the goals of the target markets
the mode of entry
the time of entry
a marketing-mix plan
a control system to check the performance in the entered markets

5. Choosing the Mode of Entry
Decision Criteria for Mode of Entry
Market Size and Growth
Risk
Government Regulations
Competitive Environment
Local Infrastructure
Company Objectives
Need for Control
Internal Resources, Assets and Capabilities
Flexibility

6. Choosing the Mode of Entry
Classification of Markets:
Platform Countries (Singapore & Hong Kong)
Emerging Countries (Vietnam & the Philippines)
Growth Countries (China & India)
Maturing and established countries (examples: South Korea, Taiwan & Japan)

7. Exporting Export management companies Piggyback Exporting
Indirect Exporting
Export management companies
Cooperative Exporting
Piggyback Exporting
Direct Exporting
Firms set up their own exporting departments

8. Franchising Overseas expansion with a minimum investment
Franchisor and the franchisee
Master franchising
Benefits:
Overseas expansion with a minimum investment
Franchisees’ profits tied to their efforts
Availability of local franchisees’ knowledge

9. Franchising Drawbacks : Revenues may not be adequate
Availability of a master franchisee
Limited franchising opportunities overseas
Lack of control over the franchisees’ operations
Problem in performance standards
Cultural problems
Physical proximity

10. Contract Manufacturing
Benefits:
Labor cost advantages
Savings via taxation, lower energy costs, raw materials, and overheads
Lower political and economic risk
Quicker access to markets

11. Contract Manufacturing
Drawbacks :
Contract manufacturer may become a future competitor
Lower productivity standards
Backlash from the company’s home-market employees regarding HR and labor issues
Issues of quality and production standards

12. Contract Manufacturing
Qualities of an ideal subcontractor:
Flexible/geared toward just-in-time delivery
Able to meet quality standards
Solid financial footings
Able to integrate with company’s business
Must have contingency plans

13. Joint Ventures Cooperative joint venture Equity joint venture
Benefits:
Higher rate of return and more control over the operations
Creation of synergy
Sharing of resources
Access to distribution network
Contact with local suppliers and government officials

14. Joint Ventures Lack of control Lack of trust
Drawbacks :
Lack of control
Lack of trust
Conflicts arising over matters such as strategies, resource allocation, transfer pricing, ownership of critical assets like technologies and brand names

15. Joint Ventures Pick the right partner
Drivers Behind Successful International Joint Ventures :
Pick the right partner
Establish clear objectives from the beginning
Bridge cultural gaps
Gain top managerial commitment and respect
Use incremental approach

16. Wholly Owned Subsidiaries
Acquisitions
Benefits:
Greater control and higher profits
Strong commitment to the local market on the part of companies
Allows the investor to manage and control marketing, production, and sourcing decisions

17. Wholly Owned Subsidiaries
Drawbacks :
Risks of full ownership
Developing a foreign presence without the support of a third part
Risk of nationalization
Issues of cultural and economic sovereignty of the host country
Acquisitions and Mergers
Quick access to the local market
Good way to get access to the local brands

18. Timing of Entry
International market entry decisions should also cover the following timing-of-entry issues:
When should the firm enter a foreign market?
Other important factors include: level of international experience, firm size
Mode of entry issues, market knowledge, various economic attractiveness variables, etc.

19. Exiting a Market Reasons for exit: Sustained losses Volatility
Premature entry
Ethical reasons
Intense competition
Resource reallocation

20. Exit Strategies Risks of exit: Guidelines: Fixed costs of exit
Disposition of assets
Signal to other markets
Long-term opportunities
Guidelines:
Contemplate and assess all options to salvage the foreign business
Incremental exit
Migrate customers

21. Retrenchment
Retrenchment means the reduction of expenditures in order to become financially stable (i.e. cutting jobs). It is a tactical concept similar to downsizing. This strategy is often used by corporations under pressure to raise profits, or who are failing in certain sectors and wish to concentrate in higher- gain areas.