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Market Entry Strategies

Alternative ways to sell products and services in foreign markets.

Global Outsourcing

Off-shoring, Engaging in the international division of labor so that work activities can be done in countries with the cheapest sources of labor and supplies.

Exporting

Transferring the sale of products to other countries. Allows companies to sell in other countries with lowest risk.

Countertrade

The barter of products for products and not for currency. An estimated of 20% of the world is this.

Licensing

A corporation in one country makes certain resources available to companies in another country. Allows companies to participate in the production and sales of its products outside its country with low cost.

Franchising

A person or company buys a complete package of materials, services, equipment, products, trademarks, managerial advice and standard operating procedures.

Direct investing

Company is involved in managing the productive assets, which distinguishes it from other entry strategies that permit less managerial control.

Joint Venture

A company shares costs and risks with another firm, typically in the host country to develop new products, build a manufacturing facility, or set up a sales and distribution network.

Wholly Foreign Affiliate

Direct acquisition of a company and the buying company has complete control over it.

Greenfield Venture

Most Costly and Risky direct investment in which a company builds a subsidiary from scratch in a foreign country.

International Management

Management of business operations conducted in more than one country. Fundamental tasks of the business management stay the same, but management technique is more difficult.

(LDC) Less Developed Country

Countries that are developing and are usually categorized by the per capita income. These countries include Asia, Africa, and South America.

Infrastructure

Transportation Facilities such as airports, highways, railroads, and energy producing facilities such as utilities.

Exchange Rate

Rate at which one country's currency is exchanged for another country's.

Political Risk

Risk of loss of assets, earning power, or managerial control due to politically based events or actions by host governments.

Political Instability

Includes riots, resolutions, civil disorders, and frequent changes in government. This also includes the Middle East, Indonesia, Haiti but some of the greatest growth opportunities are in countries like this.

Ethnocentrism

Natural tendency of people to regard their own country as superior and to down grade or dismiss other cultural values.

NAFTA

The agreement that breaks down tariffs, trade restrictions, and other restrictions between the U.S., Canada, and Mexico. Key areas include agriculture, autos, transport, and intellectual property.

Multinational Corporation (MNC)

A company that typically receives 25% of its total sales revenue from operations outside the parent's home country. It is usually managed as an integrated worldwide business systems where affiliates act in close alliance. They are ultimately controlled by a single management authority.

Ethnocentric Company

A company that places emphasis on their home country.

Polycentric Company

Companies oriented toward the markets of individual foreign host companies.

Geocentric Company

A company that is truly world oriented and favor no specific country.

Cultural Intelligence

A person's ability to use reasoning and observation skills to interpret unfamiliar gestures and situations and devise appropriate behavioral responses.

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