Operating methods in global business

Type :

Presentation

Pages :

13 pages

Format :

.doc

Published date :

01/15/2009

Category :

Business & market

Sub category :

Business strategy

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Summary :

Introduction.
Export.
1. Exporting services.
2. Why export?
3. Risks of exporting.
4. Export requirements.
Import.
1. Why import?
2. Risks of importing.
3. Importing requirements.
Licensing.
1. Why license?
2. Principal issues in negotiating licensing agreement.
3. Risks and disadvantages of licensing.
Franchising.
1. Why Franchise?
2. Risks of franchising.
3. Requirements of franchising.
Joint venture.
1. Why enter a joint venture.
2. Risks of a joint venture.
3. Requirements of joint ventures.
Management contract.
Subcontracting and contract manufacturing.
Project operations.
1. Roles and benefits of project operations.
2. The risks of the project operations.
Conclusion.
Bibliography.

Abstract

When companies decide to enter foreign markets and start doing international business, there are different kinds of entry models they can use. In our report we give an overview of some of the entry modes, including benefits/motivations, risks and requirements of the models. First we go through export and import, transporting goods/services from country to another. Export and import are especially used in the beginning of internationalization. After that we have licensing and franchising, which basically mean that one company sells rights to use for example its business idea or trademarks to another company. Then we have subsidiary operations, establishing daughter companies, which is the most demanding form of internalization. Then we go through joint venture; company established with partners, followed by subcontracting and contract manufacturing; manufacturer performs jobs for foreman. Then in the end we have management contract; some of the operational control responsibility is transferred to another company, and project operations; projects provided to the customer. Export is transporting products from one country into another. It means that a producer itself sells the products aboard or uses domestic or foreign intermediaries. In this situation the products are produced in home country of the company, but when the operation expands the exporter can also establish separate units abroad, for example selling- or producing-units. This way the company can speed up and improve its operations. (Pirnes & Kukkola 2002, 77-78)