What are the main entry modes in foreign countries? What are their advantages and disadvantages? How would you enter a high-risk country? How would you enter a small foreign market? How would you enter a large risk-free market? Why would you make these decisions?
Foreign Country Entry Modes with Advantaged & Disadvantages
In present globalized world a number of approaches have been developed to enter a foreign market that can be adopted by any organization. Subsequent are the various entry modes along with their advantages and disadvantages that can be adopted by organizations for entering foreign market:
It is the traditional method of entering into a distant market. It may be direct or indirect. It is an important method, as it doesn't require any infrastructure facility in the foreign country. It also avoids the intermediaries, which help to increase the profitability for the organizations. It also helps to enhance the competitive positions in the domestic environment. The organization can sell up to its excessive capacity. But at the same time, it also has some disadvantages such as increase in the promotional cost because of the requirement of new promotional material (Advantages and Disadvantages of Exporting, 2008). The cash flow in the firm also decreases because of the longer time in payment. The company also has to change the packaging to sell its product in foreign country, which increases the cost for the organization.
In the current international environment, this method of entering in a foreign country is increasing continuously. It is the most cost effective entry mode strategy. It provides the advantage of the large size and the large customer base to the ...
In present globalized world a number of approaches have been developed to enter a foreign market that can be adopted by any organization. Subsequent are the various entry modes along with their advantages and disadvantages that can be adopted by organizations for entering foreign markets. These are discussed in an essay-style solution in approximately 850 words with five APA references and in-text citations.