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Entry Strategies for International Markets


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Table of Contents

Figures xi Tables xiii Preface xv 1. Designing Entry Strategies for International Markets 1 The Elements of Entry Strategy 2 Classification of Entry Modes 5 Factors Influencing the Choice of the Entry Mode 8 Dynamics of Entry Mode Decisions 15 The International Marketing Plan 18 A Logical Flow Model of the Entry Decision Process 21 Summary 21 2. Deciding on the International Product Candidate and Target Market 25 Choosing the Candidate Product 25 Adapting Products for International Markets 29 Preliminary Screening of Country Markets 33 Estimating Industry Market Potentials 38 Estimating Company Sales Potentials 41 Summary 46 Annotated Bibliography of International Statistical Information 50 3. Entering International Markets through Exports 53 Exporting as a Learning Experience 53 Direct Exporting 55 Determining the Direct Export Channel 59 Choosing a Foreign Agent/Distributor 63 Export Operations 70 Getting Started in Export 76 Summary 80 4. Entering International Markets through Licensing and Other Contractual Arrangements 85 Licensing as a Primary Entry Mode 86 Protecting Industrial Property Rights Abroad 88 Profitability Analysis of a Proposed Licensing Venture 94 Negotiating the Licensing Agreement 98 Legal and Government Constraints on Licensing 108 International Franchising 109 Other Contractual Entry Modes 112 Summary 118 5. Entering International Markets through Investment 123 General Appraisal of the Investment Entry Mode 123 The Decision to Invest in a Target Country 126 Analyzing the Foreign Investment Climate: Assessing Political Risk 128 Analyzing the Foreign Investment Project: Assessing Political Risk 128 Analyzing the Foreign Investment Project: Assessing Profitability 136 Investment Entry through Acquisition 142 Investment Entry through Equity Joint Venture 146 Entry Negotiations with Host Governments 153 Summary 154 6. Deciding on the Right Entry Mode 159 The Naive Rule 159 The Pragmatic Rule 160 The Strategy Rule 160 Comparing Entry Modes: An Approach 162 Summary 198 7. Designing the International Marketing Plan 171 The International Marketing Plan 171 Segmenting the Target Country Market 175 Pricing for International Market Entry 179 Deciding on an International Promotion Strategy 187 A Note to the Reader 198 Summary 198 8. Designing Entry Strategies in a Global Enterprise System 203 The Global Enterprise System 203 Organizing the Global Enterprise 207 Planning Entry Strategies in a Global Enterprise System 216 Grouping Country Markets for Common Marketing Strategies 223 Controlling Entry Strategies 227 Summary 232 9. Designing and Managing Entry Strategies Across Cultural Differences 237 What Is Culture? 238 Communicating Across Cultures 241 Negotiating Across Cultures 252 Developing Cultural Understanding 255 Summary 259 Index 265 About the Author 271

About the Author

FRANKLIN R. ROOT is professor emeritus of international management at the University of Pennsylvania's Wharton School of Business and past president of the Academy of International Business and of the International Trade and Finance Association. He also does extensive consulting work for businesses and government agencies throughout the United States and around the world.

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