Global economic

Entry Modes, 6 diff methods firm may choose to enter market.

1. exporting
+Adv: Low cost, Central Planing (pyramid), Economy of scale "benefits of making alot"
- Disadvantage: location economy, high transportation cost, Tariff, give up value chain adv ex. marketing, core competency.

2. turn key project: Technology transfer, all of the start up company are hand over to a contractor
+Adv: Access to know how (buyer), Risk reduction (seller),
-Disadvantage: Make competitor(seller)

3. Licensing: Property Rights for Royalty Fees, on a specific time basis
+Adv: low development cost, Avoid tariff,
-Dis: No control, lose value chain, lost strategic coherence, lost of technical know how

4. Franchise: strict control over function "clarity over total offer"
+ Adv of franchisor (inc.), lower cost
- Dis: no control over business, Franchisor (less control),

5. Joint Venture: 2 or more company come together
+Adv: lower cost alternative, Less gov error(1), Access to technology, know how(2)
: localize knowlege (1)
-Dis: loss of technical control, lose strategic coherence, conflict between parent co.

6. Wholly own, green field (build it), subsidy, own new operation or buy it
+Adv: control tech & operation, scale of economy, strategic coherence, global web
-Dis: Risk & high cost,