Chapter 9Market Entry and Servicing Strategies.ppt

Chapter Outline Introduction: Exporting Strategies Contractual Forms of Market Entry Investment Options for Servicing Foreign Markets Matching Market Servicing Strategies to Environmental and Corporate Needs Chapter Outline: Market Entry and Servicing Strategies Exporting Strategies Indirect Exporting and Use of Trading Companies Direct Exporting Export Strategies Indirect Exporting and Use of Trading Companies Indirect exporting uses third party intermediaries US Trading Companies and Associations: ETC (Export Trading Companies) WPA (Webb-Pomerene Associations ) Taiwanese Trading Companies: independent producers and suppliers Mainland China Trading Companies: industry-centered Japanese Trading Companies, “big nine” sogo shosha, over 1000 overseas offices, annual turnover tops $350 billion Export Strategies Direct Exporting For small and medium sized firms, cheap and flexible For large international firms, exporting/importing are vital parts of international operations Key elements in global company supply chains for material supplies and distribution of final products International firms account for 2/3 world trade Contractual Forms of Market Entry Three Major Types of Agreements Management Contracts Contract Manufacturing Co-production Agreements Contractual Forms of Market Entry Three Types of Most Popular Agreements Licensing Allowing foreign-based firm use of production processes, marketing logos, trademarks or brand names for a defined time period in specific market and for a pre-specified royalty fee Danisco Cultor in Asia: low cost manufacturing after patent expiry Ferrari Motor Sports: publicize brand through clothing Umbro: low cost way tt compete with Adidas and Nike Contractual Forms of Market Entry Three Major Types of Agreements Franchising Franchisees given rights for production or marketing of the product; considerable control exerted over both the production processes and marketing strategy McDonalds, KFC and Pizza Hut Hyatt and Holida