Tesco Development
Entering Foreign Markets
Chapter Outline
OPENING CASE: General Electric’s Joint Ventures
INTRODUCTION
Basic Entry decisions
Which Foreign Markets? Management Focus: Tesco’s International Growth Strategy Timing of Entry Scale of Entry and Strategic Commitments Summary Management Focus: The Jollibee Phenomenon—A Philippine Multinational
ENTRY MODES
Exporting Turnkey Projects Licensing Franchising Joint Ventures Wholly Owned Subsidiaries
SELECTING AN ENTRY MODE
Core Competencies and Entry Mode Pressures for Cost Reduction and Entry Mode
GREENFIELD VENTURE OR ACQUISITION?
Pros and Cons of Acquisitions Pros and Cons of Greenfield Ventures Greenfield or Acquisition?
CHAPTER SUMMARY
CRITICAL THINKING AND DISCUSSION QUESTIONS
CLOSING CASE: JCB in India
Learning Objectives
1. Explain the three basic decisions that a firm contemplating foreign expansion must make: which markets to enter, when to enter, and on what scale.
2. Outline the advantages and disadvantages of the different modes that firms use to enter foreign markets.
3. Identify the factors that influence a firm’s choice of entry mode.
4. Evaluate the pros and cons of acquisitions versus greenfield ventures as an entry strategy.
Chapter Summary
This chapter focuses on the basic market entry decisions for firms. The six most common foreign entry strategies are discussed. These are: exporting, turnkey projects, licensing, franchising, establishing a joint venture with a host country firm, and setting up a wholly owned subsidiary in the host country. The advantages and disadvantages of each of these strategies are discussed.
Opening Case: General Electric’s Joint Venture
Summary
The opening case explores General Electric’s change in strategy. For years, General Electric entered new markets using wholly owned operations that it
Chapter Outline
OPENING CASE: General Electric’s Joint Ventures
INTRODUCTION
Basic Entry decisions
Which Foreign Markets? Management Focus: Tesco’s International Growth Strategy Timing of Entry Scale of Entry and Strategic Commitments Summary Management Focus: The Jollibee Phenomenon—A Philippine Multinational
ENTRY MODES
Exporting Turnkey Projects Licensing Franchising Joint Ventures Wholly Owned Subsidiaries
SELECTING AN ENTRY MODE
Core Competencies and Entry Mode Pressures for Cost Reduction and Entry Mode
GREENFIELD VENTURE OR ACQUISITION?
Pros and Cons of Acquisitions Pros and Cons of Greenfield Ventures Greenfield or Acquisition?
CHAPTER SUMMARY
CRITICAL THINKING AND DISCUSSION QUESTIONS
CLOSING CASE: JCB in India
Learning Objectives
1. Explain the three basic decisions that a firm contemplating foreign expansion must make: which markets to enter, when to enter, and on what scale.
2. Outline the advantages and disadvantages of the different modes that firms use to enter foreign markets.
3. Identify the factors that influence a firm’s choice of entry mode.
4. Evaluate the pros and cons of acquisitions versus greenfield ventures as an entry strategy.
Chapter Summary
This chapter focuses on the basic market entry decisions for firms. The six most common foreign entry strategies are discussed. These are: exporting, turnkey projects, licensing, franchising, establishing a joint venture with a host country firm, and setting up a wholly owned subsidiary in the host country. The advantages and disadvantages of each of these strategies are discussed.
Opening Case: General Electric’s Joint Venture
Summary
The opening case explores General Electric’s change in strategy. For years, General Electric entered new markets using wholly owned operations that it