It already week 10, there are another 3 week to complete this individual assignment. I believe everyone having a hard time to complete all the assignment. Same here. But, as for today, let me continue to share on what we already discuss in the previous lecture.
Why it is important for the company to enter foreign market???, it is because the company want to gain new customers, reduce cost though greater scale economic,gain access to resources and capabilities located outside the domestic market.
But, in making the strategy, it is quite complicated because it have different value chain, different political issue, climate and weather, different customer's taste and preferences.
There are five ways the company can choose to enter the international market, First by maintain the one country production base, Second, licensing and also franchising. Besides, the company also can establish the subsidiary via greenfield venture and last but not least, using other collaborative partnership.
We also discuss on licensing and franchising. Thus, I have look for the advantages and disadvantages for both.
Advantages for franchising are:
1) Good way to find talented person to manage the business by giving the training and incentive to work.
2) Great way to obtain expansion capital because it use the other person money to buy and open the outlets. so, no need to spend our own money or make loan from the bank.
3) can generate high financial return in the future.
Disadvantages of franchising are:
1) conflict between franchisor and franchisee due to the management.
2) reduce corporate profit margin due to the payment of royalties and levies.
Advantages of licensing are :
1) Enable to extend the business at minimal investment
2) increase the customer connection by offering various type of brand licensing.
3) Increase the channel distributions for the brand via licensing relationship.
Disadvantages of licensing are :
1) It is important for the company to understand and find the right partner for license.
2) Licensing can be a complex arrangement and it is important for a licensor to be properly guided in terms of royalty payment, audit provisions and minimum sales.
That all from now, have a nice day everyone.Jazakallah. (^_^)
No comments:
Post a Comment