global market entry strategies licensing investment and strategic alliances l.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Global Market Entry Strategies: Licensing, Investment, and Strategic Alliances PowerPoint Presentation
Download Presentation
Global Market Entry Strategies: Licensing, Investment, and Strategic Alliances

Loading in 2 Seconds...

play fullscreen
1 / 26

Global Market Entry Strategies: Licensing, Investment, and Strategic Alliances - PowerPoint PPT Presentation


  • 605 Views
  • Uploaded on

Global Market Entry Strategies: Licensing, Investment, and Strategic Alliances. Chapter 9 Global Marketing. What is the Right Market Entry Strategy?. It depends on: Vision Attitude toward risk How much investment capital is available How much control is desired. Market Entry Strategies.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Global Market Entry Strategies: Licensing, Investment, and Strategic Alliances' - durin


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
global market entry strategies licensing investment and strategic alliances

Global Market Entry Strategies: Licensing, Investment, and Strategic Alliances

Chapter 9

Global Marketing

what is the right market entry strategy
What is the Right Market Entry Strategy?
  • It depends on:
    • Vision
    • Attitude toward risk
    • How much investment capital is available
    • How much control is desired

Keegan and Green, Chapter 9

market entry strategies
Market Entry Strategies

Licensing

Investment

Strategic Alliances

Keegan and Green, Chapter 9

licensing
Licensing
  • A contractual agreement whereby one company (the licensor) makes an asset available to another company (the licensee) in exchange for royalties, license fees, or some other form of compensation
    • Patent
    • Trade secret
    • Brand name
    • Product formulations

Keegan and Green, Chapter 9

advantages of licensing
Advantages of Licensing
  • Provides additional profitability with little initial investment
  • Provides method of circumventing tariffs, quotas, and other export barriers
  • Attractive ROI
  • Low costs to implement

Keegan and Green, Chapter 9

disadvantages of licensing
Disadvantages of Licensing
  • Limited participation
  • Returns may be lost
  • Lack of control
  • Licensee may become competitor
  • Licensee may exploit company resources

Keegan and Green, Chapter 9

special licensing arrangements
Special Licensing Arrangements
  • Contract manufacturing
    • Company provides technical specifications to a subcontractor or local manufacturer
    • Allows company to specialize in product design while contractors accept responsibility for manufacturing facilities
  • Franchising
    • Contract between a parent company-franchisor and a franchisee that allows the franchisee to operate a business developed by the franchisor in return for a fee and adherence to franchise-wide policies

Keegan and Green, Chapter 9

investment
Investment
  • Partial or full ownership of operations outside of home country
    • Foreign Direct Investment
  • Forms
    • Joint ventures
    • Minority or majority equity stakes
    • Outright acquisition

Keegan and Green, Chapter 9

joint ventures
Joint Ventures
  • Entry strategy for a single target country in which the partners share ownership of a newly-created business entity

Keegan and Green, Chapter 9

joint ventures10
Advantages

Allows for sharing of risk (both financial and political)

Provides opportunity to learn new environment

Provides opportunity to achieve synergy by combining strengths of partners

May be the only way to enter market given barriers to entry

Disadvantages

Requires more investment than a licensing agreement

Must share rewards as well as risks

Requires strong coordination

Potential for conflict among partners

Partner may become a competitor

Joint Ventures

Keegan and Green, Chapter 9

ownership or equity stake
Ownership or Equity Stake
  • Start-up of new operations
    • Greenfield operations or
    • Greenfield investment
  • Merger with an existing enterprise
  • Acquisition of an existing enterprise

Keegan and Green, Chapter 9

advantages of ownership
Advantages of Ownership
  • Access to markets
  • Avoidance of tariffs or quota barriers
  • Technology experience transfers
  • Access to new manufacturing techniques

Keegan and Green, Chapter 9

global strategic partnerships
Global Strategic Partnerships
  • Possible terms:
    • Collaborative agreements
    • Strategic alliances
    • Strategic international alliances
    • Global strategic partnerships

Keegan and Green, Chapter 9

characteristics of strategic alliances
Characteristics of Strategic Alliances
  • Participants remain independent following formation of the alliance
  • Participants share benefits of alliance as well as control over performance of assigned tasks
  • Participants make ongoing contributions in technology, products, and other key strategic areas

Keegan and Green, Chapter 9

disadvantages of gsps
Disadvantages of GSPs
  • Must share control over assigned tasks
  • Risk of strengthening a competitor
  • Conflict between participants

Keegan and Green, Chapter 9

advantages of gsps
Advantages of GSPs
  • Enables firms to share high costs for a project
  • Accommodates a lack of skills, resources within a company by forming an alliance with company with those resources
  • Provides access to national and regional markets
  • Provides learning opportunities

Keegan and Green, Chapter 9

attributes of global partnerships
Attributes of Global Partnerships
  • Two or more companies develop a joint long-term strategy
  • Relationship is reciprocal
  • Partners’ vision and efforts are global
  • Relationship is organized along horizontal lines (not vertical)
  • When competing in markets not covered by alliance, participants retain national and ideological identities

Keegan and Green, Chapter 9

success factors for gsps
Success Factors for GSPs

Mission

Strategy

Governance

Culture

Organization

Management

Keegan and Green, Chapter 9

principles to follow
Principles to Follow
  • While partners in some areas, partners are still competitors in other areas
  • Harmony is not the most important measure of success
  • Everyone must understand where cooperation ends and competitive compromise begins
  • Learning from each other is critically important

Keegan and Green, Chapter 9

figure 9 2 evolution and interaction of entry strategies
Figure 9-2: Evolution and Interaction of Entry Strategies

Scale Operational Scope

Less Complex

More complex

X

Export-based

Affiliate-based

Network-based

X

X

X

X

X

Keegan and Green, Chapter 9

international cooperative strategies
International Cooperative Strategies
  • Japan
  • Korea
  • United States

Keegan and Green, Chapter 9

cooperative strategies in japan keiretsu
Cooperative Strategies in Japan: Keiretsu
  • Interbusiness alliance or enterprise groups in which business families join together to fight for market share
  • Often cemented by bank ownership of large blocks of stock and by cross-ownership of stock between a company and its buyers and nonfinancial suppliers
  • Keiretsu executives can legally sit on each other’s boards, share information, and coordinate prices

Keegan and Green, Chapter 9

cooperative strategies in korea chaebol
Cooperative Strategies in Korea: Chaebol
  • Composed of dozens of companies, centered around a bank or holding company, and dominated by a founding family
    • Samsung
    • LG
    • Hyundai
    • Daewoo

Keegan and Green, Chapter 9

cooperative strategies in us digital keiretsu
Cooperative Strategies in US:Digital Keiretsu
  • Alliances between companies in several industries that are undergoing transformation and convergence
    • Computers
    • Communications
    • Consumer electronics
    • Entertainment

Keegan and Green, Chapter 9

relationship enterprise
Relationship Enterprise
  • Next stage of evolution of the strategic alliance
    • Super-alliance
    • Virtual corporation

Keegan and Green, Chapter 9

table 9 9 market expansion strategies
Table 9-9: Market Expansion Strategies

MARKET

Concentration Diversification

COU

N

T

R

Y

2. Country

Focus

Concentration

Diversification

1. Narrow

Focus

3. Country

Diversification

4 . Global

Diversification

Keegan and Green, Chapter 9