Question

A group of students pool their meagre resources to start a business. Their plan is to sell an existing product in another country. They have no experience in international business. They decide to target a small, poor, country. Their product targets poor farmers so they have to cover a geographically disperse market in which there are no hugely profitable customers. Their product is not really superior to existing products, just a bit cheaper. They hope for small, steady, growing sales but do not expect to get rich off this product. The product does not need service and is not part of a system. There is nothing to protect with patents. There are no legal requirements that favor one entry mode over another. What entry mode would you advise this firm? Please explain all the reasons that led you to this choice

Answer: I would advise them to use the ___________________ entry mode because….

Explanation: be sure to cover as many criteria as possible and apply the facts from the case.

i need this asap! global marketing

Answer 1

Considering there are no legal restrictions in the country, coupled with political stability, one of the cheapest forms of entry to that country for such group of students, would be Direct exporting. This is so because their product is no different from that of the others available in the existing market, for which these students have to venture physically to another country to establish its brand and product in that host market. Besides, these students may also be facing capital issues as it is start-up, hence setting up a business in physical form in another country may not be advisable. Franchising, Licensing, etc. shall require the patenting of the product, which is not applicable here. Hence, even these forms of entries shall not be suitable to these students. Therefore, the easiest form of entry mode would be that direct exporting. In this mode, intermediaries such as foreign retailers and distributors could be employed in the process of reaching out to the poor farmers, without these students needing to personally venturing into that country.