Modes of entry into the international markets are critical aspects that the countries that are wishing to trade there must consider. They include exporting, licensing, internet, strategic alliances, and joint ventures. In exporting, organizations can either choose the direct or indirect method. The indirect method, a country exports its product direct to other countries. For example, China can decide to export its steel products direct to the United States. On the contrary, the indirect method requires an intermediary to do the exporting duty. Countries can also consider the internet which they can use to do easy trading. For instance, the internet allows for eMarketing among the countries connected in the cyberspace. For companies that need a competitive advantage over others, they can consider to make strategic alliances with other big companies or make a joint venture with other companies. For example, Honda made a joint venture with Rover in the 1980s to help them have a substantial technological advantage over its competitors. Lastly, a company can also license its business to be accepted to trade in other countries as it is a legal requirement for trading in most states.
Response to question two
The strategic alliance is the agreement made between two or more countries that are independent to corporate in manufacturing, development, and sale of products among other business objectives. It requires that the countries entering the alliance must benefit from each other. There are various types of strategic alliance such as joint venture, strategic equity alliance and non-equity strategic alliance. Joint venture occurs when two companies that form strategic cooperation form another company different or similar to the parent company.In equity alliance, one company purchase some percentage of another company and take control of it while in non-equity, the two companies sign a contractual relationship to manage their resources and capabilities together. In either way, both the types are meant for economic gain and substantial competitive advantage in the international market. In this regards, many companies consider getting into strategic alliances as a way to remain relevant in the market for long; hence it is used as a way for the company’s continuity.
Response to question six
Diversity in the business operation is an essential aspect in marketing and production in an organization. In today’s world, competition is too high and to counter this, a business must diversify its products to meet the expectations of the customers. Product diversity is meant to attract and retain customers to make the company get much profit. Variety of products ensures that all the people’s taste and preferences are met. For instance, diversity ensures that the cultural and demographic needs of customers are satisfied. As a result, there will be an increase in the scope of customers making the company have a large customer base. Lastly, diversity helps companies to gain technological capability as they involve in a lot of research to ensure that goods are of different types. As a result, there will be a development of new and better products channeled to meet the required quality in the market for better customers’ satisfaction.
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