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EXPORTING
LICENSING
FRANCHISING
SPECIAL MODES-: Contract manufacturing,
EXPORTING
Need limited finance
Less risk
Motivation for exporting:-
Exporting contd.
Factors to be considered:a) Govt. policies like export policies, import policies,
LICENSING (INTERNATIONAL)
In this mode of entry, the domestic manufacturer
LICENSING PROCESS
LICENSOR
LISENSOR
LICENSEE
LICENSEE
FRANCHISING (INETRNATIONAL)
It is a form of licensing. The franchisor can exercise more
Basic Issues in Franchising:The franchisor has been successful in his home country.
The franchisor may have the experience in franchising in
home country before going for international franchising.
Franchising Agreements:It has to pay a fixed amount and royalty based on the sales to
the franchisor.
Franchisee should agree to adhere to follow the franchisors
requirement like appearance, financial reporting, operating
procedures, customer service etc.
Franchisor helps the franchisee in establishing the
manufacturing facilities, service facilities, provides expertise,
advertising, corporate image etc.
Agreements contd
Franchisor allows the franchisee some degree of
SPECIAL MODES
I. CONTRACT MANUFACTURING
SPECIAL MODES
SPECIAL MODES
III. MANAGEMENT CONTRACTS
SPECIAL MODES
IV. TURNKEY PROJECTS
Takeover/acquisition
A takeover generally involves the acquisition of a certain
Takeover vs merger
Takeover
co. taken over maintains
Merger
Both the co. merge to
Takeover vs acquisition
Takeover
if the willingness is
absent.
Acquisition
If there exists willingness
Kinds of takeover
Friendly takeover: - in this, the acquirer will purchase
JOINT VENTURE
Joint Ventures
Joint ventures are attractive because:
they allow the firm to benefit from a local partner's knowledge of the
host country's competitive conditions, culture, language, political
systems, and business systems
the costs and risks of opening a foreign market are shared with the
partner
When political considerations make joint ventures the only feasible
entry mode
Joint ventures are unattractive because:
the firm risks giving control of its technology to its partner
the firm may not have the tight control over subsidiaries need to realize
Strategic Alliances
Strategic alliances refer to cooperative agreements