Introduction into foreign markets
Phase 2 DB2
In today’s discussion board we are going to definitions of exporting, counter trade, switch trading, counter purchase, licensing, franchising, collaboration, strategic, alliances and equity joint ventures. I will also be providing the advantages and the disadvantages of these entry mode expressions and the risks that are involved in each one. I will also be discussing if I were a manufacturing clothing manufacture what would be the mode of entry that would help to lower cost and to make it more efficient for us as possible. Exporting: Is the sending of goods out of the country to an international business (Webster’s Basic Dictionary, 2013). This usually involves in producing the product domestically and then also selling and shipping it abroad to a foreign country. The advantage and motive of this is; this is a way to expand the product to a new consumer and business franchise to capitalize on the growth opportunity of the company. It can help to minimize the level of risk and the investment. There is also no investment abroad and the disadvantages is you are not going to get your equity or money up front or paid at face value, you have to do all of the paperwork for you to export the products, you have to put in the money upfront to get the product to the country and there is not a guarantee the customer will not change their mind. Counter Trade and Switch Trading: this is basically when a country trades their goods and services to another country. When it comes to this process there is no cash that needs to be given it is only the goods that are barter for the sale. The advantage on this is that we can gain entry into the markets that was previously closed. The motivation is getting the new technology and products that the other business do not have. There is the great chance that we may increase the growth in technology (Phatak, Bhagat, & Kashlak, 2009). The switch trading part is when one country buys one product and then turns around and
In today’s discussion board we are going to definitions of exporting, counter trade, switch trading, counter purchase, licensing, franchising, collaboration, strategic, alliances and equity joint ventures. I will also be providing the advantages and the disadvantages of these entry mode expressions and the risks that are involved in each one. I will also be discussing if I were a manufacturing clothing manufacture what would be the mode of entry that would help to lower cost and to make it more efficient for us as possible. Exporting: Is the sending of goods out of the country to an international business (Webster’s Basic Dictionary, 2013). This usually involves in producing the product domestically and then also selling and shipping it abroad to a foreign country. The advantage and motive of this is; this is a way to expand the product to a new consumer and business franchise to capitalize on the growth opportunity of the company. It can help to minimize the level of risk and the investment. There is also no investment abroad and the disadvantages is you are not going to get your equity or money up front or paid at face value, you have to do all of the paperwork for you to export the products, you have to put in the money upfront to get the product to the country and there is not a guarantee the customer will not change their mind. Counter Trade and Switch Trading: this is basically when a country trades their goods and services to another country. When it comes to this process there is no cash that needs to be given it is only the goods that are barter for the sale. The advantage on this is that we can gain entry into the markets that was previously closed. The motivation is getting the new technology and products that the other business do not have. There is the great chance that we may increase the growth in technology (Phatak, Bhagat, & Kashlak, 2009). The switch trading part is when one country buys one product and then turns around and
References: Carter, C. (2013) The advantages and disadvantages of joint ventures and partnership relationships. Retrieved from www.smallbusiness.chron.com De Miramon, J. (1983). Advantages and Disadvantages of Countertade. Journal of Comparative Business and Capital Market Law 5 , 347-351. Merriam-Webster.com (2014). Retrieved from http://www.merriam-webster.com Phatak, A., Bhagat, R., & Kashlak, R. (2009). International Management: Managing in a Diverse and Dynamic Global Environment (2nd ed.). New York, NY: McGraw Hill.