Question

Compare the advantages and disadvantages of the following two entry modes: Exporting with Turnkey projects. Provide your assignment in TWO PAGES.

Answer 1

Exporting with turnkey project refers to a project when clients pay a contractor to design and construct new facilities and train personnel. Strategy of the turn-key project for a foreign company to export its process and technology to other countries through building a plant in that country. Industrial companies that specialize in complex production technology are using turnkey projects as an entry strategy.

The major advantages of turnkey projects is the possibility for a company to establish a plant and earn profits in the foreign countries in those countries where fewer opportunities of foreign direct investment are limited and lack of expertise and skills in a specific area exists.

Major disadvantages in this entry strategy in the foreign market like the risk of revealing companies secrets to rivals and the takeover of its plant by the home country and another disadvantage like CAN prove that a company has on long term in the host countries that can be big disadvantages.