Question

First, do some research on the following companies: ArcelorMittal and Dyson! · After you have familiarized yourself with them, compare-

The foreign market entry strategy of the two companies, The growth path of the two companies

- The key elements/crossroads in their history, The strategies driving the two companies ·

Now investigate these entry modes/ways of internationalization: Franchising, Subcontracting, Licencing, Exporting, Management contracts, Alliances, FDI, Project operations ·

Now prioritize them together according to the risk and return! Which of these entry modes are used by Apple company? Find company/case examples for each!

Answer 1

ANSWER:

Arcelor Mittal Company :

• Arcelor Mittal Company is a multinational steel manufacturing corporation.
• Arcelor Mittal Company's headquarter is in Luxembourg city.
• The steel company was founded in 2006.

Dyson Company:

• Dyson Technology India Private Limited is a subsidiary of Foreign company.
• The Dyson Private Comapny was incorporated on 2017.
• The Dyson Private Company is registered at Register of Companies, Delhi.

Entry modes\ways of internationalization

1. Franchising
2. Subcontacting
3. LIcensing
4. Exporting
5. Management Contracts
6. Alliances
7. FDI
8. Project Operations

1 . FRANCHISING:

• Franchising is the entry mode of internationalization.
• In Franchising the entry barriers are lower.
• It is an exchange of periodic fees.
• Franchising is a very efficient, low cost and quickly implemented strategy.

2. Subcontracting

• Subcontracting means when one similar firm, contracts with another similar firm.
• It is a contractual agreement that assigns the produvtion of goods and services to ,local or similar firms.

3. Licensing

• It is an agreement whereby one company provide its technology in exchange for fees or other considerations.
• For example technology include copyrights, patents, trademarks etc.
• In licensing there is a reduction in transportation costs.
• Example: STRABUCKS has licensing agreements with SSP ( an operator of food and bevarge concessions in Europe) to sell strabucks producvts in train stations thrighout Europe.

4. Exporting

• Exporting is the practice of shipping goods from the domestic country to a foreign country.
• Exporting of goods requires the involvement of customs autorities in the both countries, it means country of export and country of import.
• Example: AMAZON ana EBAY has largely bypassed the involvement of customs in many countries because of the low individual valies of these trades.

5. Management Contracts ;

• Management contracts are agreement between two comapnies.
• Whereby one comapny provide managerial & technical assistance against lumsum fee or percentage on the sales or share in profits.

6. FOREIN Direct Investement (FDI)

• FDI is the flow of investments from one company to production in a foreign nation.
• FDI can help economic situations of developing countries.
• FDI is practiced by companies in order to benefit from cheaper labour costs, tax exemptions in that country.

7. Alliance

• Alliance is a voluntary agreement between two comapnies to pool their resources to achieve a common set of objectives
• It is mainly used to expoand the production capacity.
• Alliance also helped in increasing market share dor a product.

8. Project operations

• A project operations is a contract under which a firm agrees tom fully design, construct and turn the project over to the purchaser when it is ready for peration.
• Project oerations are often used by goverment.

ENTRY MODES USE BY APPLE COMAPNY ARE EXPLAINED BELOW:

• Apple comapny designs manufacture many computers and mobile communication devices.
• It is engaged in desigining Mascs, laptops icloud and a rangfe of accessories.

MARKET ENTRY MODE

• The apple uses Licensing, exporting and importing strategies for particular country,.

LICENSING:

• Licensing is used by apple as market entry mode due to its positive features that are not present in orther market stragies like joint venture,allience etc.

EXPORTING

• Exporting mode is also used by apple as an entry mode option.

IMPORTING

• Importing mode is also used by apple due to its specific features.

In the above question is explained in detail.