A firm must assess a number of internal and external factors while making the choice of entry mode. The aim of this paper is to provide a deeper understanding of the various factors that affect the selection of international entry mode from a theoretical viewpoint. This paper concentrates on secondary sources of research regarding the internationalization of businesses. The conclusion provides a short summary of identified key elements that need to be considered by the firm in choosing foreign market entry modes.
As a multinational company, it is more effective to found new ventures in foreign markets rather than acquire an existing foreign firm and integrate it into the parent company system. When setting up subsidiaries of multinational companies in global markets, studies have shown that subsidiaries founded by acquisition have a higher rate of exit than those founded as new ventures Li The higher risks associated with acquiring foreign firms come from the difficulty in integrating the acquired firms into the parent system.
The business cultures, organizational structures, and technology differences within the acquired firm and the parent company tend to be great obstacles to overcome.
The conveniences of acquiring a foreign firm which include pre-existing relationships with suppliers and customers, the expertise of existing personnel, and obvious familiarity with the local market are not as advantageous as they may seem.
Experience creates and is sometimes the only way to achieve increased market knowledge and uncertainty.Chapter 5 Target Markets and Modes of Entry.
Market participation decisions—selecting global target markets, entry modes, and how to communicate with customers all over the world—are intimately related to decisions about how much to adapt the company’s basic value proposition. International Capital Markets A capital market is a market in which corporations trade long-term security bonds.
"Companies search the international markets for . The Global Business Strategy of McDonald and how it reached All the Corners of The World at Lesser Cost This report presents how McDonald’s has achieved enormous success, its best practices in the global food industry, international growth trends and effect on its operating income and number of increasing restaurants across the globe from their expansion in foreign countries.
to enter in order to access valuable market data and directories of potential buyers for particular industries. • Take an on-line course, workshop, or college course on international. This article focuses on how organizations use international marketing to gain entry into foreign markets.
In order to have a successful international marketing strategy, organizations adapt.
Entering International Markets Measuring a potential business venture has many aspects which the international manager must be aware of in order to convey the correct information back to the decision makers.