SUBMITTED BY:- ANKITA SINGH- 58

Various Modes for Internationalisation are:-

 Exports and Imports
 Licensing
 Franchising
 Management Contracts
 Joint Ventures
 Turnkey projects
 Wholly owned subsidiaries
 Strategic Alliances
 Mergers & Accquisitions
 Contract Manufacturing

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 It is one of the important modes which is mostly
followed by the enterprises interested in IB.
 Generally holds true for small enterprises.
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EXAMPLES

 TATA Motors
exports to over
70 countries
across the
world.
 Other Exporters
are Sony(TV),
Matsuhita(VCR)

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 In Licensing, an organization (licensor) gives the
right to another organization(licensee) to use its
intangible property, in a specified geographic area,
for a specified period of time by paying some
amount called the ROYALTY fee.
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 Xerox licensed its xerographic know how to
Fuzi-Xerox for an initial period of 10 years
for a Royalty fee equal to 5 percent of the
net sales revenue.
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 In Franchising, Franchise not only sells an
intangible property to franchisee but also assits
it operationally on a continuing basis. It is
normally persued by service firms.
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 Mc Donalds has strict rules for Franchisees. It
specifies the menu, cooking methods, staffing
policies, design and location of the
restaurants.

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 Here a company
transfers its
management talent to
assists a foreign
company for a specified
period of time and for
some specified fee.

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 British Airport
Authority has
contract to
manage some
airports of U.S.,
Italy and
Australia.

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 Joint Ventures is a type
of ownership in which
two or more
independent partners
come together to
establish a firm in order
to manufacture/supply a
product or a service.

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 TATA AUTOCOMP SYSTEMS forged Joint
Ventures partnerships in order to become a
major global player.

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 Here, the contractor(organization)
agrees to build a complete &
ready-to-operate faclities for the
client, they even provides training
to the operating personnel & once
the project is complete , the
contractor hands over the key of
the plant to the client – hence the
name TURNKEY.

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 The construction of International airport at
Devanahalli, Bangalore is a joint turnKey
project of L&T and siemens.

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 It means establishing a subsidiary in foreign
country over which the company has a cent
percent control.
 A company can go for greenfeild venture or it
could accquire an established firm.
 Eg. Microsoft India Development Centre

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 Strategic alliance refers to the alliance
between actual or potential competitors.

 Two organizations, actual or potential

competitors, agree to cooperate with each
other, by way of forming an alliance by
entering into a cooperative agreement.

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MOTOROLA alliance with TOSHIBA to build
Microprocessors.

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 In Merger, the organizations come together
to share their resources in order to achieve
common objectives.
 Eg., Roche merged with Chugai.

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 In Accquisitions, one organization purchases
the assets or shares of another and thereby
the accquired organization becomes the
subsidiary of the accquirer.

 Eg., Tata Motors accquired Land Rover &

Jaguar.
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 In this, an organization manufactures the
product for another organization(client).
 Standards and other details are ordered by
the client.
 Eg., Godrej Soaps manufactured Dettol for
Reckitt and Colemann, Ponds Dreamflower
talc for ponds.
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 These were the generally practiced and the
most possible ways through which big
companies and even small enterprises go
global or internationalize, in order to expand
their sales, accquire resources and to
minimize their risks.

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