Strategies for reaching global markets
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Strategies for Reaching Global Markets. Exporting – --one of the easiest and simplest methods; --export trading companies facilitate the process between exporters and buyers from different countries; --can lead to assigning a foreign company to sell the goods or services locally

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Strategies for Reaching Global Markets

Exporting –

--one of the easiest and simplest methods;

--export trading companies facilitate the process between exporters and buyers from different countries;

--can lead to assigning a foreign company to sell the goods or services locally

--considered least risky and potentially very profitable


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Global Market Strategies

  • Licensing -

  • --a company (licensor) enters the global market by looking for a foreign company (licensee) to produce and/or sell it’s product in exchange for a fee (royalty.)

  • --poses some advantages and disadvantages

  • --a licensor can have access to the promotion and marketing of it’s produce in the global market;

  • --a licensee can sometimes copy or “steal” a company’s secrets, etc., and compete with the licensor

  • --requires little commitment by the licensor and little risk


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Global Strategies

  • Franchising

  • An agreement between a franchisor – who sells the rights to use the business name, produce or service to the franchisee

  • Must adopt to local customers traditions, preferences, likes and dislikes, etc.

  • Examples include: McDonald’s, Tim Horton’s, Boston Pizza, etc.

  • Considered fair amount of commitment while maintaining some control


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Global Strategies

  • Contract Manufacturing (“outsouring”)

  • a company will enter into business with a foreign company to produce it’s goods or services and then apply it’s brand name on that product or service

  • Considered a slight risk in the foreign market with some potential profit potential


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Global Strategies

  • Joint Ventures –

  • A partnership usually between a foreign and a domestic company to offer a new produce or service;

  • Several advantages:

    • 1. shared technology and risk;

    • 2. shared marketing and business experience;

    • 3. entry into a global market is usually easier to facilitate if a partnership is entered into with a local business


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Global Strategies

  • Strategic Alliance –

  • A long-term partnership of two or more businesses to help each business build a competitive advantage;

  • Each company uses their “advantage” to assist in gaining a market share;

  • Combining the skills, experience and technology of both companies


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Global Strategies

  • Foreign Direct Investment –

  • Buying businesses and property in a foreign country;

  • Foreign subsidy – a company that is owned in a foreign country by another company, which is referred to as a parent company;

  • There are both pros - the parent company maintains control over the technology, marketing, etc.

  • As a con – the parent company spends a lot of money and commits to technology, facilities, etc. in the foreign boundary

  • Expropriation-- If difficulties arise, the business assets of the parent company could be taken over by the foreign government

  • Would GM be considered a foreign direct investment – if so, then what are some of the advantages/ disadvantages of this type of global market strategy?


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