Sequential strategy in moving overseas
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1. Why do companies generally follow a sequential strategy in moving overseas?
2. What are the pluses and minuses of exporting? Licensing? Foreign production?
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This posting gives a detailed response to the student's question. The expert determines why companies generally follow a sequential strategy for moving over seas. The pulses and minuses of exporting, licensing and foreign production are determined.
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Ques: Why do companies generally follow a sequential strategy in moving overseas?
Ans: The usual sequence of overseas expansion involves exporting, setting up a foreign sales subsidiary, possible licensing agreements and, eventually, foreign production. This sequential approach can be viewed as a risk minimizing response to operating in a highly uncertain foreign environment. By internationalizing in phases, a firm can gradually move from a relatively low risk low ...
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