Evaluate at least three international market entry methods for electric buses in Italy. What are the advantages and disadvantages of each method?

 

1. Partnering and Strategic Alliance
2. Exporting
3. Licensing and Franchising

Step-by-step explanation

Partnering and Strategic Alliance

A strategic alliance involves an authoritative arrangement between at least two ventures specifying that the elaborate gatherings will participate with a particular goal in mind for a specific chance to accomplish a common purpose. To decide whether the alliance approach is reasonable for the firm, the firm should choose what the accomplice could bring to the venture; both tangible and intangible. The advantages of partnering together with a local firm are that the local firm probably comprehends the neighborhood culture, market, and methods of working together in a way that is better than the outside firm. Partners are particularly important if they have a perceived, respectable brand name in the nation or have existing associations with clients that the firm should get to. An example in this case the Alfabus Europe partnered with the local carrier Arriva KM to kick-start the operation of the electric buses.

Advantages of Partnering and Strategic Alliance.

• Shared costs between the partners the reduce investment needed.
• Reduced risk and uncertainities in that the local firm will have local information that will boost the deployment of the buses.
• Will prove to be a plus for the outside firm since it will be seen as local entity

Disadvantages of Partnering and Strategic Alliance.

• The cost involved with this strategy is Higher cost than exporting, licensing, or franchising.
• There might arise Integration problems between two corporate cultures.

Exporting

Exporting is the showcasing and direct offer of locally created products in another nation. Exporting is a conventional and settled strategy for arriving at unfamiliar business sectors. Since it doesn't need that the merchandise be created in the target nation, no interest in unfamiliar creation offices is required. The greater part of the expenses related with trading appear as advertising costs. Exporting is a typically the simplest way to enter an international market, and therefore most firms begin their international expansion using this model of entry and the entry of electric buses into Italy won't be an exception. The advantage of this form of entry is that firms don't incur the cost of establishing operations in the new country.

Advantages of Exporting

• Fast entry into the foreign country.
• Low costs of establishing operations in the new country.
• Low risk.

Disadvantages of Exporting

• The firm will likely have to start from scratch, that is advertising itself, this might be costly and tedious.
• Low local knowledge.
• Potential negative environmental impact of transportation of the buses into their base of establishment.

Licensing and Franchising

Licensing basically allows an organization in the objective nation to utilize the property of the licensor. An organization that needs to get into a global market rapidly while taking just restricted monetary and legitimate dangers should think about permitting concurrences with unfamiliar organizations. An international licensing agreement permits an unfamiliar organization (the licensee) to sell the products of a producer (the licensor) or to utilize its protected innovation, (for example, licenses, brand names, copyrights) in return for eminence charges.

Another well known approach to extend abroad is to sell franchises. Under a international franchise agreement, an organization (the franchiser) awards an unfamiliar organization (the franchisee) the option to utilize its image name and to sell its items or administrations. The franchisee is answerable for all tasks however consents to work as indicated by a plan of action set up by the franchiser. Thus, the franchiser for the most part gives publicizing, preparing, and new-item help. Diversifying is a characteristic type of worldwide development for organizations that work locally as per an establishment model.

Advantages of Licensing and Franchising

• Fast entry.
• Low cost of establishment.
• Low risk.

Disadvantages of Licensing and Franchising

• Less control over the investment by the licensee
• Licensee may become a competitor.
• Legal and regulatory environment (IP and contract law) must be sound