MKT300

International Marketing
-Global market entry strategies-
 -House keeping-
0 X-Culture for late registrants
0 Readiness test due tomorrow
0 Upload weekly updates on the team platform – don’t sent
email.
0 The assignment is a team assignment

0 Mid-Semester Quiz
0 15 October, 1100hrs
0 Venue: Online
0 About 50 Questions for 60 points(?)
0 Some short answer questions
 -Learning objectives-

0 Understand the different market-entry strategy options.

0 Compare and contrast the different forms that a
company’s foreign investment can take.
0 Discuss factors that may influence entry strategy mode
-investment cost of market
entry strategies-
 -Foreign market entry-
0 Continuum….does this mean ‘Equity stake’ is better than
‘Exporting’?
0 the level of involvement, risk, and financial reward
increases along the entry strategy continuum
0 Should a firm replicate the first entry mode strategy that
served it well in the past without significant adaptation?
0 What is the objective of market entry?
0 To the extent that the objective of entering the market
is to achieve penetration – advise is to consider
embracing a mass-market mind-set. This may well
mandate an adaptation strategy.
 -Which entry mode strategy to
use? -

0 It depends on:
0 Vision
0 Attitude toward risk
0 Available investment
capital
0 How much control is Starbucks has over 4,704 stores in China (Sept
2020). All co operated.
desired
US – 8941 company operated & 6387 under
license

Think combinations: JV, licensing, Self operated…

 -Licensing-
0 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
0 Patent
0 Trade secret
0 Brand name
0 Product formulations
0 Worldwide sales of licensed goods
totaled $292.8 billion in 2019
0 Entertainment sector - 43.8%
0 Corporate brands – 20.5%
Disney is the world’s top licensor.
0 Fashion – 11.5% US$54 Billion (2021)
 -Advantages to licensing-
0 Provides additional profitability with little initial
investment
0 Provides method of circumventing tariffs, quotas, and
other export barriers
0 Attractive ROI
0 Low cost to implement
0 Licensees have autonomy to adapt products to local
tastes
0 License agreements should have cross-technology
agreements to share developments and create
competitive advantage for each party
 -Disadvantages to licensing-

0 Limited market control

0 Returns may be lost
0 The agreement may be short-lived
0 Licensee may become a competitor
0 Licensee may exploit company resources
 -Special licensing
arrangements-
0 Contract manufacturing
0 Company provides technical specifications to a
subcontractor or local manufacturer
0 Allows company to specialize in product design while
contractors accept responsibility for manufacturing
facilities
0 May open the firm to criticism if manufacturers
operate with harsh working conditions or have low
wages
0 Check Nike manufacturing map…
 -Special licensing
arrangements-
0 Franchising
0 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
0 Used by the specialty retailing & fast-food industries
0 Check top 100 franchises in 2020…
 -Special licensing
arrangements-
0 Franchising questions
0 Will local consumers buy your product?
0 How tough is the local competition?
0 Does the government respect trademark and franchiser
rights?
0 Chinese regulation requires foreign franchisers to own 2 /<
stores for 1yr /< before franchisees can take over…
0 Intellectual property is also a concern in China…
0 Can your profits be easily repatriated?
0 Can you buy all the supplies you need locally?
0 Is commercial space available and are rents affordable?
0 Are your local partners financially sound and do they
understand the basics of franchising?
- Good day -