Advantages And Disadvantages Of Mode Of Entry

If you want to export goods to a particular country, make sure they have a need for your particular services or product. Most international businesses find multiple countries or locations that have a need for these items in order to ensure a steady and profitable revenue stream.

Mode of entries are ways that UPS can determine their goals, resources and policy in order to channel their entry into India to a sustainable expansion. There are six modes of entry; exporting, turnkey projects, licensing, franchising, joint venture and subsidiary. For a service company; strategic alliance, joint venture, franchising and subsidiary are the most suitable mode of entry.

Exporting, licensing, and using trading companies are preferred modes of international market entry for firms with a(n) ____ structure.

2. I will define licensing agreement: in this case we are talking about an international licensing agreement which allow foreign firms, either exclusively or non -exclusively to manufacture a proprietor’s product for a fixed term in a specific market. Licensing is a relatively flexible work agreement that can be customized to fit the needs and interests of both, licensor and licensee.

Sole Proprietorship: A type of business that is owned by and run by one person with no legal difference between the business and the owner. It is easy to form with no cost or time to initiate. It gives the owner the ability to self-govern the business. There are drawbacks; only one owner can be established not allowing a partner. Also, unlimited liability puts the owner’s personal assets in jeopardy with the creditors.

Exporting has become a very important business strategy nowadays. In order for firms to expand to the international market, and also to maintain and grow their share of market in whatever industry they are in, depending on their goals and objectives, any company must at least explore this possibility. A few and important advantages might come into place, in that they can extend their sales potential of their existing products, increasing margins through a larger customer base. Also, these small to large businesses can consolidate by gaining global share of market, they can reduce their dependence on their existing markets,

• It allows intellectual property holders to put bounds and conditions on the use of their

The need for a solid market entry decision is an integral part of a global market entry strategy. Entry decisions heavily influence the firm’s other marketing-mix decisions. Company can enter International Market with many ways, some of them are as follows:

The 3 entry modes present different advantages and drawbacks, Franchising Strategy showed low control in the operations, low risk of exposure, low investment and high support from the local partner. Joint Venture entry mode indicated moderate-high investment, moderate risk, medium exposure and moderate control. Lastly, Greenfield entry mode denoted high risk, high investment, high control of the operations and high exposure.

If a business plans to use software, then it will need the appropriate license. If it plans to export controlled goods it may need an export

Countries are enabled by free international trade to specialise or to focus in the production of the goods in which they have a comparative advantage. Specialisation countries can take the benefit of efficiencies generated from increased output and economies of trade. The size of the firm’s market are increased by the international trade which results in lower average costs and increasing in productivity, as it ultimately leads to increase in production.

Increase Sales: - if a business succeeds in the US, going international will likely improve the overall revenue. Approximately 96% of the world’s population lives outside of the United State and 90% of the world’s population do not speak English, that suggest that customer is global and if a business has to look beyond the end of the domestic market, you have real upside potentials

There are many different types of market entry strategies that may be implemented by a foreign firm in an emerging country. Amongst the most popular are:

An international entry mode is an institutional agreement necessary for the entry of a company’s products, technology and human capital into a foreign country or market.

First the licensing may result in a firm's giving away its know-how that is giving away his competitive advantage to the competitor in the foreign market. Suppose Ford gives license to AvtoVAZ, one of the large Russian manufacture then it can start its own car manufacturing using Ford's know how. Second disadvantage is providing the license to the company there is no tight control over the subsidiary firm in foreign market. Ford wants to exploits the opportunity that it has in Russia by its own way. Licensee may not follow all instruction of Ford. The last problem with the giving license is that some terms of know-how can not be defined on a page or documented. Like service industry (Hospitality industry) that how to license the subsidiary for "how to well come and how to greet" as a part of the service.(Hill, 2003,p-215).