Question

Compare the advantages and disadvantages of the following two entry modes: Exporting with Turnkey projects. i need specifics and details, thanks. it's not versus question.

Answer 1

A turnkey project is a way to export the operations and technology by setting up an additional plant in the other country. The companies, which already have complex or specialized processes, use this strategy. The firms in industries like construction, design, and commissioning of plants use this type of system to expand their operations in other countries. These projects are of high value, and should also provide competitive competences to the company. It is a way to secure the foreign buyer and offer them security by establishing a plant in their country. Some of the exporters who sell the product overseas get the privilege of turnkey projects. The project has both advantages and disadvantages. The first advantage is to provide security to the buyers of the other country. It is because the buyers trust the companies that are in their own country. The MNCs also set up their plant in the other country to gain consumers' trust and confidence. The second advantage is that there are comparatively fewer costs. When the companies export to a foreign country, it has to pay taxes and other charges. However, the long term costs in this project are less. On the flip side, the first disadvantage is the perception of foreign consumers. There is a difference in the understanding of consumers from different countries. Hence, it can act as a hindrance to the operations. The second advantage is that there is a difference in customs and traditions. The traditions of countries differ from each other because of different values and ethics. Hence, the strategy has both advantages and disadvantages.