Question

Evaluate the various options for market entry modes available to an organisation at the stage of establishing international operations

Answer 1

The modes of entry is the marketing channels for organizations to enter the international markets. There are various modes available such as licensing, exporting, internet, joint ventors , strategic allainces, international agents, international distributors, overseas manufacture and international sales subsidiaries.

Licensing:

In licensing includes franchising, contract manufacturing and turnkey contracts

in licensing the organization charges a fee for the use of its technology or brand. In franchising the organisation provides branding, concepts and expertise in the field. The turnkey contracts are used to build large plants, in this the company often provide training for their employees.

International agents and intenational distributors:

The agents may be individuals or organizations that act behaif of your presence they charge commission for their service. The agents are a low cost and low- control option. If you dont know the commitment of the agent it would be better to set a target on the agents, the agents may also represent your rivals. The agennts rarely take the ownership of the goods. The distributor is also similar to agents the main difference is that , the distributors take ownership of the goods.

Strategic Alliances:

The strategic alliance represents a set of series of different relationships between companies, for examples such as shared manufacturing, research and development.

Joint Ventures and mode of entry:

The joint ventures are new companies set up with proportion of the ownership with some parties. There are many reasons for the joint ventures come into the business. They are, to gain entry into a new market, to access the disrtibution channels and reserach and development.

Over seas manufacture or international sales subsidiary:

In this, the firm directly invest in the overseas manufacturing unit, that is investment in labour , plant and machinery. In this new market they can produce new goods and export components from the home country or another country.