Question

2. Give the factors that influence the mode of entry decision process and explain. 3. What are the modes of market entry? Analyze the disadvantages and advantages. 4.What are the reasons of the high rate of JV failure and what can be done to prevent it?

Answer 1

2.1.Market growth, market size, level of competition, government control, risk level, infrastructure and manufacturing costs are some of the factors influencing the methods of entry decision making. Entering a business, an organization must understand the market's growth, market size, its competition, market products, its price and structure, and its customers. The business needs to have the necessary infrastructure. What kind of government control is there? It is important to know whether the government is intervening in the market. There should be an understanding of the risk potential and cost of production in this business.

3 a)- Licensing: International contract licensing is required to enter a specific market in a particular market. This permits companies to manufacture and market the product. Benefits of Licensing: Licensing of new companies in the local venture business at high risk helps in licensing this. Cons: The trademark and reputation are lost by the incompetent partner.
b) Exporting: Exporting goods and services produced by one country to other countries. There is direct and indirect export. Benefits: Establishes a good relationship with the consumer. Receiving positive feedback. More sales are possible. Reduces risk for companies. Quotes: High Appearance Possibility. High investment is required. Direct exports require more time as opposed to indirect exports.
c). Franchising: Semi-independent business owners use the Business for Change and System for a trade company to pay fees and royalties for its trademark identification rights. .
Advantages: Due to a low political risk, the low costs can be simultaneously extended to different parts of the world. Well-selected partners bring financial investments and management skills into action.

Disadvantages : Controlling the franchise can be difficult Conflicts with the franchisee, including legal disputes, can protect the franchisor's image in the foreign market.

d)Joint venture

A joint venture has five common goals: market access, risk / reward sharing, technology sharing, joint product development and compliance with government regulations. Other benefits include political connections and relationship-based access to distribution channels.  

4.The majority of joint ventures fail because the partners are not compatible with each other. The international partner seeks to localize himself. They are active in making major decisions but are unwilling to give up on local partner control and management. This creates problems.

These problems can be resolved as follows: acquiring local knowledge, political contacts, risk sharing, immediate access to integrated infrastructure, market share and brand recognition are some of the benefits of enter into a joint venture with an established local partner. Collecting positive attributes from each party should generate long-term monetary benefits for both parties.
International joint ventures are one of the main ways for multinationals to enter a foreign market.