Compare and contrast the various strategies for entering new global markets: exporting, licensing, franchising, strategic alliances, and direct foreign investment. Give examples of when each strategy would be best utilized.
What will be an ideal response?
Exporting is the most common method for entering foreign markets and accounts for 10 percent of all global economic activity. Primary advantages include the ability to penetrate foreign markets with minimal investment and very little risk. Most people consider exporting an initial entry strategy and not a long-term approach to global marketing.
Companies choose licensing when local partnerships are required by law, legal restrictions prohibit direct importing of the product, or the company's limited financial resources limit more active foreign participation. Companies seeking to establish greater presence in a market without committing significant resources can choose to license their key asset (patent, trademark) to another company, effectively giving that company the right to use that asset in that market.
Franchising has been growing over the last decade; it enables companies to gain access to a foreign market with local ownership. The franchisor, usually a company seeking to enter a foreign market, agrees to supply a bundle of products, systems, services, and management expertise to the franchisee in return for local market knowledge, financial consideration (franchisee fee, percentage of sales, required purchasing of certain products from franchisor), and local management experience. Franchisors exert a great deal of control with extensive franchise agreements that dictate how the franchisee will operate the business.15 In this way, the franchisor is able to maintain some level of quality control at the point of customer contact.
As a market entry strategy, strategic alliances have grown in importance over the past 20 years in an effort to spread risk to other partners. In some industries, strategic alliances now dominate the competitive landscape.
The market entry strategy with the greatest long-term implications is direct foreign investment. Risks go up substantially when a company moves manufacturing into a foreign market. Although this is the riskiest market entry strategy, future market potential can position it for long-term growth.
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Identify and briefly describe the main components of a typical marketing plan
What will be an ideal response?
Answer the following statement(s) true (T) or false (F)
1. Proxemics is a nonverbal behavior in communication that includes pitch, volume, speed, tension, variation, enunciation, and a number of other voice qualities such as breathiness and creakiness. 2. Descriptive approaches to understanding cross-cultural negotiation document differences in negotiation processes and behaviors in different cultures. 3. The affective style of persuasion is illustrated by a factual–inductive style which relies on appeals to logic. 4. Cognitive moral development is an approach to understanding ethical decision-making that focuses on the mental determination of right and wrong based on values and social judgments.
In Dayan v. McDonald's Corporation, the court ruled that:
A) McDonald's quality standards were inadequate under French law B) the McDonald's franchise contract was illegal under French law. C) McDonald's had fulfilled its responsibility to the franchisee in France under U.S. law. D) the French do not like hamburgers.
In the American court system:
a. there is a federal system and a similar system of trial and appeals courts in each state b. federal court precedents must be followed by state courts c. state supreme court decisions may not be appealed to the U.S. Supreme Court d. none of the three specific choices are correct e. all of the three specific choices are correct