question archive You do know major modes of International Business

You do know major modes of International Business

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You do know major modes of International Business. Being analyst you are required to explain that which modes of International Business you are directly beneficiaries and how? Which modes of International Business you are directly damaging and how? 

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Market research analysts gather and analyze data on consumers and competitors. As an analyst you are required to help the company understand what products/services people want, potential customers and at what price the customers will buy the products/services.

 

International companies are ones that have a globalized supply chain spread across different parts of the world. An analysts role revolve around reducing risk related to a marketing initiative or project.This is done by considering aspects such as response rates, return on investment and consumer dropout rates. Below is an analysis of modes of entry in International Business and their benefits and damages.

Modes of entry to which an analyst is a direct beneficiary

  1. Strategic Acquisitions. It is a business mode in which a company acquires a controlling interest in an existing company in the overseas market. The acquired company can be directly or indirectly involved in offering similar products or services in the overseas market. As an analyst the mode is directly beneficial as it guarantees fast entry. The analyst also gets raw data from the already established company hence easier report writing.
  2. Partnership and Strategic Alliance. It is a business mode in which a company wishing to expand into overseas markets form joint ventures with local businesses in the overseas location. Both joint venture companies share the risk and rewards associated with the business. Direct benefits that an analyst may enjoy from a joint venture include: lowered risk, availability of market data, the company retains some level of control hence easy preparation of reports.
  3. Greenfield Venture. It is a Foreign Direct Investment in which a parent company creates a subsidiary in a different country building its operations from the ground up. Benefits that an analyst may draw from this mode include: access to local market knowledge, maximum control hence easy preparation of reports and easy analysis of trends in the market.

Modes an analyst is directly damaging

  1. Direct exporting. It is a business mode in which a company directly exports/ sells their products to another overseas market. Direct damages include: loss of market control and low local knowledge.
  2. Licencing and franchising. In licencing agreement and franchise, an overseas based business pays you a royalty or commission to use your brand name, manufacturing process, products, trademarks and other intellectual properties. The licensee or franchisee assumes the risk, bears all losses and shares a proportion of the revenue and profits. Direct damages to the company include: limited control of their products, licencee may become a competitor.

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