Which markets to enter?

Choices

Indirect exporting

Direct exporting

Licensing

Joint Ventures

Direct investment

Indirect and direct export

Domestic based export merchants

Domestic based export agents

Cooperative organisations

Export management companies

WAYS OF DIRECT EXPORT

• Domestic-based export Domestic-based export departmentdepartment

• Overseas sales branchOverseas sales branch• Traveling export sales Traveling export sales

representativesrepresentatives• Foreign-based distributors or Foreign-based distributors or

agentsagents

LICENSINGLICENSING

• Licensor issues a license to a foreign Licensor issues a license to a foreign

company to use a manufacturing process, company to use a manufacturing process,

trademark, patent for a fee or royalty.trademark, patent for a fee or royalty.

• Licensor gains entry at little riskLicensor gains entry at little risk

• Licensee gains production expertise/ well-Licensee gains production expertise/ well-

known brandknown brand

Contract manufacturingManagement contracts

Franchising

Joint VenturesJoint Ventures

One of the most powerful strategic tools

Good partners share “brand values” help maintain brand consistency across markets.

Direct InvestmentDirect Investment

Foreign investment

Ultimate goal is direct ownership

1. Secures cost economies through cheaper raw materials, incentives, etc

2. Strengthens image in host country because it creates jobs

3. Deepens its relationship with government, customers,local suppliers, etc.

4. Retains full control over its investment

Firms assures itself itself of access to the market