The document discusses SWOT analysis and international market entry strategies. It defines SWOT as a tool to analyze strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal, while opportunities and threats are external. The document provides examples of SWOT analyses for companies like Walmart and Starbucks. It then discusses various international market entry strategies like exporting, franchising, licensing, and foreign direct investment through wholly owned subsidiaries or joint ventures. Finally, it outlines factors that affect the selection of an entry strategy, such as market size, competition, regulations, and a company's objectives and resources.

2. MARKET ATTRACTIVENESS/ COMPANY STRENGTH ..ANALYSIS

4. SWOT Analysis a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors. A SWOT analysis process generates information that is helpful in matching an organization or group’s goals, programs, and capacities to the social environment in which it operates. international market entry 3 Rajesh Narang

6. international market entry 5 Rajesh Narang

7. SW :PRIMO-FPeople II Resources III Innovation & Ideas II MarketingII Operations II Finance strength could be:What do you do well? Is there anything you do better than most? Better than anyone else? Your specialist marketing expertise. A new, innovative product or service. Location ,Quality processes that adds value to your product or service. A weakness could be:What should be improved? What do you do poorly? What should you avoid, based on mistakes in the past? Lack of marketing expertise. Undifferentiated products ,Poor quality Damaged reputation. international market entry 6 Rajesh Narang

9. Threats :What obstacles do you face?

10. What are your competitors doing that may result in a loss of clients, customers, market share? Are the required specifications for your job, products or services changing? Is changing technology threatening your position? Do you have cash-flow problems? international market entry 7 Rajesh Narang

11. SWOT Analysis Examples Example 1 - Wal-Mart SWOT Analysis. Strengths - Wal-Mart is a powerful retail brand. It has a reputation for value for money, convenience and a wide range of products all in one store.Weaknesses - Wal-Mart is the World's largest grocery retailer and control of its empire, despite its IT advantages, could leave it weak in some areas due to the huge span of control.Opportunities - To take over, merge with, or form strategic alliances with other global retailers, focusing on specific markets such as Europe or the Greater China Region. Threats - Being number one means that you are the target of competition, locally and globally. international market entry 8 Rajesh Narang

12. Example 2 - Starbucks SWOT Analysis. Strengths - Starbucks Corporation is a very profitable organisation, earning in excess of $600 million in 2004.Weaknesses - Starbucks has a reputation for new product development and creativity. Opportunities - New products and services that can be retailed in their cafes, such as Fair Trade products. Threats - Starbucks are exposed to rises in the cost of coffee and dairy products. Example 3 - Nike SWOT Analysis.Strengths - Nike is a very competitive organisation. Phil Knight (Founder and CEO) is often quoted as saying that 'Business is war without bullets.'Weaknesses - The organisation does have a diversified range of sports products. Opportunities - Product development offers Nike many opportunities. Threats - Nike is exposed to the international nature of trade. . international market entry 9 Rajesh Narang

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16. Market entry strategies international market entry 13 Rajesh Narang

17. Market entry strategiesExporting Direct Domestic base Overseas sales branch Traveling sales representative Foreign-based distributors/agent Indirect-occasional, or active exporting Domestic-based export merchant Domestic-based export agent Cooperative organizations Export-management company international market entry 14 Rajesh Narang

18. Franchising: A contractual arrangement where a wholesaler or retailer (the Franchisee) agrees to make some payment and to meet the operating requirements of a manufacturer or other franchiser in exchange for the right to use the firm’s name and to market its goods or services Foreign Licensing:an agreement that grants foreign marketers the right to distribute a firm’s merchandise or to use its trademark, patent, or process in a specified geographic area. Subcontracting: a contractual agreement where a firm hires a local company to produce goods or services in a specific geographic area. Market entry strategiesContractual Agreements international market entry 15 Rajesh Narang

19. Market entry strategiesInternational Direct Investment An additional strategy for entering global markets Requires direct investment in foreign firms, production, and/or marketing facilities Advantages cheaper labor cost in some countries government incentives creates better image deeper relationships with government, customers, suppliers and distributors full control of operations and marketing Risks involved: economic difficulties of the host country political instability and negative perception international market entry 16 Rajesh Narang

20. Modes of international market entry Production in home country exports:production is carried out in home country and finished goods are shipped to the overseas markets for sale indirect exports:process of selling products to an export intermediary in the company’s home country who in turn sells the products in the overseas markets direct exports:process of selling the firm’s products directly to an importer in the overseas market international market entry 17 Rajesh Narang

21. Modes (contd) complementary exporting:use of distribution channels of an overseas firm to make the product available in the overseas market provide offshore services:to overseas clients with the help of information and communication technology international market entry 18 Rajesh Narang

24. Licensee pays royalties

25. Lower-risk entry mode; limits exposure to economic, financial, and political instability

26. Permits the company access to markets that may be closed or that may have high entry barriersDOWNSIDE: Can produce competitor in the licensee international market entry 20 Rajesh Narang

28. Modes (contd) overseas turnkey projects: conceptualize, design, install, construct, and carry out primary testing of manufacturing facilities or engineering structures for an overseas client organisation types : built and transfer (BT), built, operate, and transfer (BOT), built, operate, own (BOO) international management contracts: a company provides its technical and managerial expertise for a specific duration to an overseas firm international market entry 22 Rajesh Narang

29. Modes (contd) international strategic alliance: the relationship between two or more firms that cooperate with each other to achieve common strategic goals but do not form a separate company international contract manufacturing: a contractual arrangement under which a firm’s manufacturing operations are carried out in a foreign countries international market entry 23 Rajesh Narang

31. Modes (contd) Investment entry modes assembly in overseas markets: refers to exporting various components of the product in completely knocked down (CKD) condition and assembles them overseas international joint ventures: equity participation of two or more firms resulting into formation of a new entity international market entry 25 Rajesh Narang

33. Help develop local expertise

34. If production is exported, helps with country’s balance of trade

35. Foreign company and local company establish a jointly-owned new company

36. Parties share capital, equity, labor

37. 70% of all joint ventures break up within 3.5 yearsDOWNSIDE: Joint-venture partners can turn into viable competitors; and 70% of all joint ventures break up within 3.5 years. international market entry 26 Rajesh Narang

39. Monopoly effect

40. Allowed

41. where expensive R&D is involved

42. in underserved markets

43. in markets where the government and/or the marketplace can control its activityinternational market entry 27 Rajesh Narang

47. Involve long-term market commitment

48. High cost

49. High control of operations

50. Greatest level of risk international market entry 30 Rajesh Narang

53. High level of controlinternational market entry 31 Rajesh Narang

54. Comparison of Market Entry Strategies Form Control Risk Advantage Export Very limited Low Low cost Licensing Limited Moderate Low cost Joint Ventures Shared Moderate Local expertise Ownership Total High Control Internet Total High No physical presence required international market entry 32 Rajesh Narang

56. Market growth

57. Government regulations

58. Level of competition

59. Level of risk

60. political

61. economic

62. operational

63. Production and shipping costsinternational market entry 33 Rajesh Narang

65. availability of company resources

66. level of commitment

67. international experience

68. flexibilityinternational market entry 34 Rajesh Narang

69. Foreign market portfolios: technique and analysis international market entry 35 Rajesh Narang

70. Thank you