Question

what are three key approaches to entering international markets. 1) Exporting 2) Joint venturing and 3) Direct investment and what are the advantanges and disadvantages of each entry method.

Answer 1

1. Exporting- Export advantages You will broaden your markets dramatically, leaving you less reliant on any single one.
Greater production will result in greater economies of scale and better margins.
Your budget for R&D will work better, because you can adjust existing goods to suit new markets.
Disadvantages of exporting You may lose emphasis on your home markets and current customers unless you are cautious.
When trading outside the European Union, your administration costs will increase because you will have to deal with export regulations.
You can navigate more distant partnerships, sometimes thousands of miles apart.

You that lose some of the influence in the overseas markets that you are used to at home.
You'll need to think differently to home business about your new market. They 're going to be different clients with their own reasons to buy your goods.

2. Joint venturing- Joint Venture Benefits One of the most important advantages of a joint venture is that it can help the company grow faster, improve profitability and produce greater income. Joint venture advantages include: exposure to new markets and distribution networks improved risk and cost sharing capability (i.e. liability) with investor access to new information and skills, including access to higher resources by specialist personnel, such as technology and finance

Joint venture drawbacks Joint ventures can present major liability risks, as well as the potential for disagreements and disputes between partners. Problems are likely to emerge if: the aims of the venture are vague that the contact between partners is not great, the partners expect different things from the joint venture that the level of expertise and commitment does not suit the work and the resources are not evenly distributed

3. Direct investment- Advantages of FDI Market access: FDI will provide you with an easy way to reach a foreign market. Some countries can extremely limit the access of foreign companies to their domestic markets. Acquiring or starting up a company on the market is a way to gain exposure to it.
Resource access: FDI is also an efficient means of accessing essential natural resources, such as precious metals and fossil fuels. For example, oil companies often make huge FDIs for developing oil fields.

The Foreign Direct Investment Drawbacks Hindrance to Domestic Investment- Foreign direct investment can also impede domestic investment, as it focuses its money other than the home country of the investor. Political Changes Risk.- Because political dynamics can change rapidly in other nations, foreign direct investment is extremely risky. Plus, most of the risk factors you'll face are extremely high.