MKT730 GDB 1 Solution and Discussion
Total Marks 10
Starting Date Thursday, January 23, 2020
Closing Date Monday, January 27, 2020
Question Title Modes of Entry Into International Markets
International Marketing (MKT730) Fall, 2019
Graded Discussion Board No.1
Due Date: 27/01/2020
Total Marks: 10
Topic: MODE OF ENTRY INTO INTERNATIONAL MARKETS
NOTE: There is no grace period in case of GDB
The discussion will familiarize the student to various modes of entry into international markets.
After attempting the GDB student will be able to understand:
The decisions critical for the company while deciding the entry mode in international markets.
There are many factors that will impact the choice of strategy to enter in international markets, including tariff rates, the degree of adaptation of product, marketing and transportation costs. The choice may be starting from scratch (greenfield investment), starting a strategic alliance or joint venturing with a local partner, or acquiring a competitor in that industry. Each of these vehicles have advantages and disadvantages individually and a careful choice of the strategy is pertinent for the companies while entering the international markets. For instance, acquisition the fastest form of integration but has chances of possible clashes across the cultures. Similar is the case too in case of strategic alliances which are also vulnerable to cultural clashes as well. In direct exporting firms have to directly sale its goods in the foreign markets utilizing its own resources. Many firms involve agents or distributors to act on their behalf in return for fees.
Licensing is the form of entry which is rather more sophisticated and involves transferring of rights to use the product or services to another firm. Purchaser of the license must have good established name and market share in the market. Franchising model is also very useful especially firms which have repetitive business model like food chains. In joint ventures (JV) there involves third independent entity having (1+1=3) synergic effect. In JVs two companies join their resources in order to make a new separate entity which is less risky and involves equal profit sharing.
When the firms make entry into international markets, choice of entry is the key factor for their future business endeavors. This factor is more decisive in achieving the success in international markets.
Point of Discussion:
After reading the above passage, provide answer to following questions.
Question No.1: In your opinion which is the most preferred entry method especially when the firm limited in resources aspires to enter the international market? Provide at least two valid reasons in favor of your argument. (2+3=5 Marks)
Question No.2: Why companies prefer licensing instead of franchising in their foreign operations, provide at least two reasons for their preference to licensing over franchising? (5 marks)
Keep your discussion with the mentioned context.
Irrelevant answers will be graded zero.
be careful from those blogs which are promoting cheating culture among our students and killing their creativity and critical thinking. Answers copied from such blogs will be straightaway marked as zero. Similarly, any relevant or irrelevant material copied from internet sources will get the same treatment. It can seriously damage your grades.
For acquiring the relevant knowledge, do not rely only on handouts but also watch the course video lectures and read additional material available online or in any other mode.
Your discussion must be based on logical facts. The GDB will open and close on above specified date and time. Please note that no grace day or extra time will be given for posting comments on GDB. Use the font style “Times New Roman” and font size “12”. Your answer should be relevant to the topic i.e. clear and concise. Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course. Books, websites and other reading material may be consulted before posting your comments; but copying or reproducing the text from books, websites and other reading materials is strictly prohibited. Such comments will be marked as Zero (0) even if you provide references. You should post your answer on the Graded Discussion Board (GDB), not on the Moderated Discussion Board (MDB). Both will run parallel to each other during the time specified above. Therefore, due care will be needed. Obnoxious or ignoble answer should be strictly avoided. You cannot participate in the discussion after the due date via email. Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over. For planning your semester activities in an organized manner, you are advised to view schedule of upcoming Assignments, Quizzes and GDBs in the overview tab of the course website on VU-LMS.
Note related to load shedding: Please be proactive
As you know that Post-Midterm semester activities have started and load shedding problem is also prevailing in our country. Keeping in view the fact, you all are advised to post your activities as early as possible without waiting for the due date. For your convenience; activity schedule has already been uploaded on VULMS for the current semester, therefore no excuse will be entertained after due date of assignments, quizzes or GDBs.