2. Entering Foreign Markets12
chapter
Entering Foreign Markets
McGraw-Hill/Irwin
Global Business Today, 5e
© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.

3. 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)

4. 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

5. 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

6. 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

7. 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

8. 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)?

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