Entry Mode And Staffing Analysis
Milestone 6: Entry mode and staffing
This part of report contains information regarding entry strategies and staffing. Selecting an entry mode is one the crucial task for a company because whatever mode you select is going to decide the fate of company.
There are many types of entry modes available but the crux is which mode is suitable for your business.
Types of entry Modes
Export Entry Modes
Indirect export: Indirect involvement means that firm participates in international business through an intermediary and does not deal with foreign customers or market. Advantages are low entry cost, low financial risk, low marketing cost, low staffing required etc. disadvantages are low profitability, full dependence on domestic intermediary, lack …show more content…
This method have some advantages like low entry cost, moderate financial risk, agent overcomes the difficulties of entry. But the disadvantages are much heavier like high dependence on foreign agent, inability to gain foreign experience etc. so because of our less control on foreign market this option is ruled out
Foreign distributer: acting on its own account. Advantages of using this option are low staffing, low marketing cost. Disadvantages are trade barriers have to be resolved by company, high transport cost. This option is better than foreign agent. So for a while it can be part of our evoked set.
From above discussed From above discussed entry techniques each category have it’s own pros and cons. But at present point of time we are not in condition of taking risk. Because first time we are entering into the foreign market so our entry should be for the purpose of long term business. Hence indirect exporting is ruled out. But we have many options available in direct exporting too, to select out of them we have to define our motive. Our motives are like
• Long term establishment
• High control in the …show more content…
Because these are not fulfilling our motives or agenda what we have made.
Investment Entry Modes / Foreign Direct Investment
Sole venture: New establishment/greenfield investment: The creation of a foreign subsidiary wholly owned (100%) by a parent company
Advantages:
1) Full control – holding centralized control
2) Good image of such a company on the local market
3) Potentially the highest profitability
Disadvantages:
1) High entry cost
2) High risk
3) Complicated registration procedures
Joint venture: New establishment/acquisition: The creation of a foreign subsidiary jointly controlled (minority and majority interests) by the parent company and a foreign partner
Advantages
1) synergy
This part of report contains information regarding entry strategies and staffing. Selecting an entry mode is one the crucial task for a company because whatever mode you select is going to decide the fate of company.
There are many types of entry modes available but the crux is which mode is suitable for your business.
Types of entry Modes
Export Entry Modes
Indirect export: Indirect involvement means that firm participates in international business through an intermediary and does not deal with foreign customers or market. Advantages are low entry cost, low financial risk, low marketing cost, low staffing required etc. disadvantages are low profitability, full dependence on domestic intermediary, lack …show more content…
This method have some advantages like low entry cost, moderate financial risk, agent overcomes the difficulties of entry. But the disadvantages are much heavier like high dependence on foreign agent, inability to gain foreign experience etc. so because of our less control on foreign market this option is ruled out
Foreign distributer: acting on its own account. Advantages of using this option are low staffing, low marketing cost. Disadvantages are trade barriers have to be resolved by company, high transport cost. This option is better than foreign agent. So for a while it can be part of our evoked set.
From above discussed From above discussed entry techniques each category have it’s own pros and cons. But at present point of time we are not in condition of taking risk. Because first time we are entering into the foreign market so our entry should be for the purpose of long term business. Hence indirect exporting is ruled out. But we have many options available in direct exporting too, to select out of them we have to define our motive. Our motives are like
• Long term establishment
• High control in the …show more content…
Because these are not fulfilling our motives or agenda what we have made.
Investment Entry Modes / Foreign Direct Investment
Sole venture: New establishment/greenfield investment: The creation of a foreign subsidiary wholly owned (100%) by a parent company
Advantages:
1) Full control – holding centralized control
2) Good image of such a company on the local market
3) Potentially the highest profitability
Disadvantages:
1) High entry cost
2) High risk
3) Complicated registration procedures
Joint venture: New establishment/acquisition: The creation of a foreign subsidiary jointly controlled (minority and majority interests) by the parent company and a foreign partner
Advantages
1) synergy