Department: English (General)

Class: Third Year

Course Instructor: Nermine Morsy
Year: 2021/2022
Name of the Course International T & H Management
Faculty: Tourism Hospitality And Heritage Management

International Market Entry Modes

Submitted By Mohymen Mohamed Fathy

Group(B)
Introduction
Today we will talk about the five most common modes of international-market
entry are exporting, licensing, partnering, acquisition, and greenfield venturing
each of these entry vehicles has its own particular set of advantages and
disadvantages

Exporting
Because exporting is often the simplest way to reach an international market, most
businesses begin their international expansion with this strategy. The sale of items
and services obtained from the home country in foreign countries is known as
exporting. This technique of entrance has the advantage of avoiding the costs of
starting operations in a new country. Firms must, however, have a way to promote
and sell their products in the new country, which they usually do through
contractual agreements with a local company or distributor. When exporting, the
company must consider labeling , packaging, and pricing the product to fit the
market.

Licensing and Franchising 

Companies which want to establish a retail presence in an overseas market with
minimal risk, the licensing and franchising strategy allows another person or
business assume the risk on behalf of the company.
In Licensing agreement and franchise, an overseas-based business will pay you a
royalty or commission to use your brand name, manufacturing process, products,
trademarks and other intellectual properties.
While the licensee or the franchisee assumes the risks and bears all losses, it shares
a proportion of their revenues and profits you.
When does this work the best?
I explored this strategy in the case where one of the established companies of the
other country already had a loyal audience with them.
At the same time, their product line had gaps which I was able to fill up. Therefore,
just like two pieces of jigsaw, it made complete sense for them to carry my
product.
Partnerships

Another way to break into a new market is to form a strategic alliance with a local
partner. A strategic alliance is an agreement between two or more businesses to
collaborate in a certain way for a set length of time in order to achieve a common
goal. Consider how much value the partner could bring to the endeavour in both
practical and intangible ways to assess if the alliance technique is suited for your
organization. The advantages of working with a local firm include the fact that a
local firm is more likely than an outside firm to understand the local culture,
market, and business practises.

Strategic Acquisition

Strategic acquisition means that your company buys a majority stake in an existing
company in a foreign market. This acquired company may be active in providing
similar products or services in the international market, either directly or indirectly.
You can keep the newly acquired company's existing management to benefit from
their skills, knowledge, and experience while also having your team members on
the board of directors.
Greenfield venture

Give the company the best chance to keep complete control of operations, obtain
local market knowledge, and establish a reputation as an insider who hires
locals. Greenfield initiatives have the drawbacks of taking a long time to enter
the market because they must set up operations from the ground up, as well as
the high costs of doing so. Greenfield projects give the company the best chance
to keep complete control of operations, obtain local market knowledge, and
establish a reputation as an insider who hires locals. Greenfield initiatives have
the drawbacks of taking a long time to enter the market because they must set up
operations from the ground up, as well as the high costs of doing so
 Type of Entry Advantages
Exporting Fast entry, low risk
Licensing and
Fast entry, low cost, low risk
Franchising
Shared costs reduce investment
Partnering and Strategic
needed, reduced risk, seen as
Alliance
local entity
Fast entry; known, established
Acquisition
operations
Gain local market knowledge;
Greenfield Venture
can be seen as insider who
(Launch of a new, wholly
employs locals; maximum
owned subsidiary)
control
Disadvantages
Low control, low local knowledge,
potential negative environmental impact
of transportation
Less control, licensee may become a
competitor, legal and regulatory
environment (IP and contract law) must be
sound
Higher cost than exporting, licensing, or
franchising; integration problems between
two corporate cultures
High cost, integration issues with home
office
High cost, high risk due to unknowns, slow
entry due to setup time
Conclusion

While every organization aspires to global dominance in its field, you must first
plan your internationalization strategy based on your finances, existing capabilities,
and the growth potential of the overseas market, among other factors, before
deciding on various means of international entry. In this essay, I'll go over the five
different ways to go into international business that I discovered when researching
how to develop the company where I work abroad

References
Retrieved 26 October 2021, from https://saylordotorg.github.io/text_international-business/s12-03-
-international-expansion

Retrieved 26 October 2021, from https://www.superheuristics.com/5-modes-of-entry-into-international-

/markets/https://www.superheuristics.com/5-modes-of-entry-into-international-markets