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I need assistance in analyzing the four approaches a company can use to expand internationally and evaluates how technology fits into each approach. To include the following:
a. Compare and contrast the four basic methods of internationalization: licensing, exporting, joint ventures, and wholly owned subsidiaries.
b. Evaluate how changes and advances in technology have served to drive the internationalization of business, including at least one example.
c. Discuss the pros and cons of each of the four methods in effecting technology transfer. The input should differentiate technology transfers designed to globalize internal business processes from technology transfers designed to deliver end products and services to new markets.
Please do not copy, cut & paste text, copy from previous postings, provide instructions on "how-to" from various internet sites, or definitions as a response. Please provide in-depth analysis, supporting facts and include relevant sources. I'm seeking expert analysis only please.
Thank you very much for your assistance. I value your input!
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Solution Summary
Compare and contrast the four basic methods of internationalization: licensing, exporting, joint ventures, and wholly owned subsidiaries.
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a.Compare and contrast the four basic methods of internationalization: licensing, exporting, joint ventures, and wholly owned subsidiaries.
Let us first see the advantages and disadvantages of each of these methods:
Exporting: Exporting is the simplest form of internationalization as it does not involve large resource commitment and can be relatively started in a short period of time. The advantages and disadvantages of this method are as follows:
Advantages:
Avoids cost of establishing manufacturing operations
May help achieve experience curve and location economies
Disadvantages:
May compete with low-cost location manufacturers
Possible high transportation costs
Tariff barriers
Possible lack of control over marketing reps
Local Agent Problems
Licensing:
Licensing involves a contractual arrangement whereby a company licenses the rights to certain technological know-how, design and intellectual property to a foreign company in return for royalties or other kinds of payment. Licensing offers a small business many advantages, such as rapid entry into foreign markets and virtually no capital requirements to establish manufacturing operations abroad. Returns are usually realized more quickly than for manufacturing ventures.
The disadvantages of licensing include a lack of control over manufacturing, quality, and marketing. More importantly, that the licensee may become a competitor if too much knowledge and know-how is transferred. Always make sure to carefully protect your trademarks and intellectual property when undertaking any licensing agreement.
Foreign Manufacturing Joint Ventures:
In contrast to licensing arrangements, foreign manufacturing joint ventures allow for the U.S. company to have a stake and management role in the foreign operation. Joint ventures require more of a direct investment than licensing and typically include the need for training, management assistance, and technology transfer.Joint ventures can be equity or non-equity partnerships. Equity joint ventures are ...
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- BCom, SGTB Khalsa College, University of Delhi
- MBA, Rochester Institute of Technology
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