Which of the following is a disadvantage of exporting as a mode of entry into foreign markets? High transport costs can make exporting uneconomical, particularly for bulk products . ... The local agents may not market the firm’s products as well as the firm would if it managed its marketing itself.
Which of the following is disadvantage of exporting?
Unless you’re careful, you can lose focus on your home markets and existing customers. Your administration costs may rise as you may have to deal with export regulations when trading outside the European Union. You will be managing more remote relationships, sometimes thousands of miles away .
Which of the following is a disadvantage of a small scale entry for an international firm considering foreign expansion?
Which of the following is a disadvantage of small-scale entry for an international firm considering foreign expansion? Small-scale entry into a foreign market makes it difficult to build market share because it: ... A firm can avoid the cost of establishing manufacturing operations in the host country.
What is the drawback of licensing as a mode of entry into foreign markets?
Disadvantages include the risk of an incompetent foreign partner firm and lower income compared to other modes of international expansion .
Which entry mode into a foreign market best serves a high tech firm because it reduces the risk of losing that competence?
When a firm’s competitive advantage is based on technological competence, a joint venture is the preferred mode of entry into a foreign market because it reduces the risk of losing control over that competence.
What are the advantages and disadvantages of direct exporting?
- Better Knowledge of Customers’ Requirements: ...
- Goodwill: ...
- Full Control: ...
- Full Returns on Exports: ...
- Full Knowledge of Market Conditions: ...
- Permanency: ...
- Short Chain of Distribution: ...
- Proper Choice for Certain Products:
What are the risks of exporting?
- Political Risks. Exporters can face significant political risks when doing business in various countries. ...
- Legal Risks. Laws and regulations vary around the world. ...
- Credit & Financial Risk. ...
- Quality Risk. ...
- Transportation and Logistics Risk. ...
- Language and Cultural Risk.
What are the six modes companies use to enter foreign markets?
- Exporting. Exporting is the direct sale of goods and / or services in another country. ...
- Licensing. Licensing allows another company in your target country to use your property. ...
- Franchising. ...
- Joint venture. ...
- Foreign direct investment. ...
- Wholly owned subsidiary. ...
- Piggybacking.
What are three advantages of acquisitions?
- Reduced entry barriers. ...
- Market power. ...
- New competencies and resources. ...
- Access to experts. ...
- Access to capital. ...
- Fresh ideas and perspective. ...
- Culture clashes. ...
- Duplication.
Which of the following is an advantage of choosing exporting as a mode of entry into foreign markets?
Exporting is the sale of products and services in foreign countries that are sourced from the home country. The advantage of this mode of entry is that firms avoid the expense of establishing operations in the new country .
What is the impact of licensing in the international market?
The following are the main advantages and reasons to use international licensing for expanding internationally: Obtain extra income for technical know-how and services . Reach new markets not accessible by export from existing facilities. Quickly expand without much risk and large capital investment.
What are the challenges of international licensing?
Particularly, international licensing is itself open to various problems, such as ‘ payment risk’ (which arises from under-reporting of earnings and currency differences) and ‘valuation risk’ (the uncertainties in valuing the licensed trademark) (Mottner and Johnson, 2000) .
Which of the following is not a mode of entry into foreign markets?
Importing is not a market entry mode, because importing is not selling any product. Importing is related with marketing and purchasing. Many countries are related with each other by import export through business.
Which entry mode is best?
| Type of Entry Advantages | Exporting Fast entry, low risk | Licensing and Franchising Fast entry, low cost, low risk | Partnering and Strategic Alliance Shared costs reduce investment needed, reduced risk, seen as local entity | Acquisition Fast entry; known, established operations |
|---|
What are the six types of entry modes?
- Direct Exporting. Direct exporting involves you directly exporting your goods and products to another overseas market. ...
- Licensing and Franchising. ...
- Joint Ventures. ...
- Strategic Acquisitions. ...
- Foreign Direct Investment.
Why entry mode is important?
The choice of entry mode is an important strategic decision for SMEs as it involves committing resources in different target markets with different levels of risk, control, and profit return. ... Owing to their specific characteristics, SMEs restrict their internationalization to exporting alone.
