What are two equity based modes of entry Quizlet
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Direct Exporting: Show Pros: - Relatively low investment by exporter - Flexibility (able to exit a country in adverse conditions) Cons: - Motivation and support - Ill-prepared export ventures often fail - Payment risks (credit terms) Industry factors: The nature of the industry Company factors Individual factors When considering how to enter markets, international companies can choose between entry modes that will, or will not, involve foreign direct investment. This exercise focuses on a number of different equity-based modes of international market entry, exploring some of the most important advantages and disadvantages of each alternative. Read the case below and answer the questions that follow. The Asia-Pacific region has been projected to be the most rapidly growing market for commercial air travel in the next two decades. China is a major factor in that growth forecast, due to booming demand for flights to, and within, that country. The Chinese government has actively encouraged and supported efforts by domestic companies to become involved in the design and manufacture of commercial aircraft and their parts, with an ultimate goal of developing Chinese aerospace companies into a major global competitive force in the commercial aircraft manufacturing industry. In their efforts to develop world-class skills in the design and manufacture of aerospace products, many Chinese companies have formed joint ventures with foreign companies, especially global leaders based in the United States and Europe. What are two equity based modes of entry?The equity modes of entry into a foreign market include both direct investment in facilities in the overseas location, as well as joint ventures with companies in the same industry with a base in the target market.
Which of the following is an equity mode of entry?Licensing and franchising are examples of equity modes of entry.
What are two of the modes of entry into international markets?The five most common modes of international-market entry are exporting, licensing, partnering, acquisition, and greenfield venturing. Each of these entry vehicles has its own particular set of advantages and disadvantages.
What are the modes of entry?Learning Objectives. How many modes of entry are there?There are 5 modes of entry into international business that a business needs to choose from. This choice, like any other, is a trade off. Different entry strategies for international markets have different advantages and disadvantages.
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