Bu111 Final Review F2020 (Int'l Business, Strategic Expansion)

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List the 6 different entry strategies in Int'l business
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List the 6 different entry strategies in Int'l business
1. Indirect Export
2. Sales Agent or Distributor
3. Licensing/Franchising
4. Alliances/Joint Ventures
5. Local Sales Office
6. Foreign Subsidiary
What is the most costly entry strategy and why?
Foreign subsidiary is the most costly because you have to setup a new plant in a different country
What is Indirect Export?
Indirect export is when you sell to an third party exporter, they identify where to sell and takes care of shipping and obtaining payment
What capabilities do you need for indirect export?
Literally nothing
What are the risks/costs associated with indirect export? (3 main risks)
1. No customer contact
2. No control over the destination
3. No control over pricing, promotion or foreign distribution strategy
Why would you choose to go with Indirect export? (3 reasons)
1. No additional cost
2. No knowledge of the market
3. No risk from foreign market political volatility
Under what conditions should you choose an Indirect Export strategy?
Sample answer:
You're a smaller business who doesnt have a lot of resources nor knowledge of a foreign market and dont mind losing the control on the product.
Name a KPI that would be negatively affected by choosing to go with an Indirect Export strategy?
Sample answer:
Net Promoter Score if your export partner does not respond to customer service or anything at all
What is a sales agent or distributor?
Hire an agent or distributor to sell your product using their local network and YOU MANUFACTURE DOMESTICALLY and ship abroad
What is the key difference between sales agent/distributor and indirect export?
With sales agent / distributor, you have to handle the logistics of shipping the product, indirect exporters handle that for you