Did you know?
International expansion is achieved through either exporting, licensing arrangements, partnering and strategic alliances, acquisitions, and establishing new or wholly owned subsidiaries. These modes of entering international markets and their characteristics are shown in the table below. Each mode of market entry has its advantages and disadvantages. Businesses need to evaluate their options to choose the entry mode that best suits their strategy and goals
|Type of Entry||Advantages||Disadvantages|
|Exporting||Fast entry, low risk||Low control, low local knowledge, potential negative environmental impact of transportation|
|Licensing and Franchising||Fast entry, low cost, low risk||Less control, licensee may become a competitor, legal and regulatory environment (IP and contract law) must be sound|
|Partnering and Strategic Alliance||Shared costs reduce investment needed, reduced risk, seen as local entity||Higher cost than exporting, licensing, or franchising; integration problems between two corporate cultures|
|Acquisition||Fast entry; known, established operations||High cost, integration issues with home office|
|Greenfield Venture (Launch of a new, wholly owned subsidiary)||Gain local market knowledge; can be seen as insider who employs locals; maximum control||High cost, high risk due to unknowns, slow entry due to setup time|
If you require assistance with your exporting challenges, then we would welcome the opportunity to assist in accelerating your export opportunity.
See our export page for more information
I can be contacted on 0409 478 850.
Author: Steve Dowling