Advantages and Disadvantages of Modes of Entry to Foreign MaPaper Rating: Word Count: 2198 Approx Pages: 9
There are many different modes of entering foreign markets; each method will have its strengths and weaknesses in general terms. However each single organisation will be more attracted to a type mode depending on their backgrounds, nature of the company, long term and short term aims. Often the greatest obstacle for organisations when entering foreign markets is the array of standards which the company has to meet, for example; safety, environmental, packaging, labelling, patents, trademarks and copyrights, these factors can make it hard for businesses to be successful. The different modes of entering foreign markets I will evaluate are; exporting, licensing, Foreign Direct Investment (FDI), franchising, strategic alliances, turnkey projects and countertrade.
Exporting is the direct sale of domestically produced goods in another country. Exporting is a traditional and well established method of reaching foreign markets. Since exporting does not require the goods to be produced in the target country, no investment in foreign production facilities is required, which reduces risk if the project fails. Companies export primarily to increase sales revenue. However exporting also achieves economies of scale in production and allows the com