SCALE OF ENTRY AND STRATERGIC COMMI

SCALE OF ENTRY AND STRATERGIC COMMITMENTS
Another issue that an international business needs to consider when contemplating market entry is the scale of entry. entering a market on a large scale involves the commitment of significant resources. Entering a market on a large scale implies rapid entry. Consider entry of the Dutch insurance company ING into the U.S insurance market in 1999 ( described in detail in the accompanying Management focus). ING had to spend several billion dollars to acquire its U.S operations. Not all firms have to resources necessary to enter on a large scale, and even some large firms prefer to enter foreign markets on a small scale then build slowly as they become more familiar with the market.
The consequences of entering on a significant scale – entering rapidly – are associated with the value of the resulting strategic commitments. A strategic commitments has a long-term impact and is difficult to reverse. Deciding to enter a foreign market on a significant scale is a major strategic commitment. Strategic commitments , such as rapid large scale market entry, can have an important influence on the nature of the competition in a market. For example, by entering the U.S financial services market on a significant scale, ING has signaled its commitment to the market. This will have several effects. On the positive side, it will make it easier for the company to attract customers and distributors ( such as insurance agents). The scale of entry gives both customers and distributors reasons for believing that ING will remain in the market for the long run. The scale of entry may also give other foreign institutions considering entry to the united states pause; now they will have to compete not only against indigenous institutions in the unites states, but also against an aggressive and successful European institution. On the negative side, by committing itself heavily to the unites states, ING may have fewer available to support expansion in other desirable markets, such as Japan. The commitment to the united states limits the company strategic flexibility.
As suggested by the ING example, significant strategic commitments are neither unambiguously good or bad. Rather, they tend to change the competitive playing field and unleash a number of changes, some of which may be desirable and some of which will not be. It is important for a firm to think through the implications of large-scale entry into a market and act accordingly. Or particular relevance is trying to identify how actual and potential competitors might react to large-scale entry into a market. Also, the large-scale entrant is more likely than the small-scale entrant to be able to capture first-mover advantages associated with demand preemption, scale economies, and switching costs.
The value of the commitments that flow from rapid large scale entry into a foreign market must be balanced against the resulting risks and lack of flexibility associated with significant commitments. But strategic inflexibility can also have value. A famous example from military history illustrates the value of inflexibility. When Herman Cortes landed in Mexico, he ordered his man to burn all but one of his ships. Cortes reasoned that by eliminating their only method of retreat, his man had no choice but to fight hard to win against the Aztecs – and ultimately they did.
Balanced against the value and risks of the commitments associated with large-scale entry are the benefits of a small-scale entry. Small-scale entry allows a firm to learn about a foreign market while limiting the firm’s exposure to that market. Small-scale entry is a way to gather information about a foreign market before deciding whether to enter on a significant scale and how best to enter. By giving the firm time to collect information, small-scale entry reduces the risks associated with a large-scale entry. But the lack of commitment associated with the small-scale entry may make it more difficult for the small-scale entrant to build market share and to capture first-mover or early-mover advantages. The risk-averse firm that enters a foreign market on a small-scale may limit its potential losses, but it may also miss the chance to capture first-mover advantages.
SUMMARY
There are no “right” decisions here, just decisions that are associated with different levels of risk and reward. entering a large developing nation such as china or India before most of other international business in the firm’s industry, and entering on a large scale, will be associated with high levels of risk. In such cases, the liability of being foreign is increased by the absence of prior foreign entrants whose experience can be a useful guide. At the same time, the potential long-term rewards associated with such a strategy are great. The early large-scale entrant into a major developing nation may be able to capture significant first-mover advantages that will bolster its long- run position in that market. In contrast, entering developed nations such as Australia or Canada after other international businesses in the firm’s industry, and entering on a small scale to first learn more about those markets, will be associated with much lower levels of risk. However, the potential long-term rewards are also likely to be lower because the firm is essentially forgoing the opportunity to capture first-mover advantages and because the lack of commitment signaled by small scale entry may limit its future growth potential.
This section has been written largely from the prospective of a business based in a developed country considering entry into foreign markets. Christopher Bartlett and Sumantra Ghoshal have pointed out the ability that businesses based in developing nation have to enter foreign markets and become global players. Although such firms tend to be late entrants into foreign markets, and although their resources may be limited, Bartlett and Ghoshal argue that such late movers can still succeed against well-established global competitors by pursuing appropriate strategies. In particular, Bartlett and Ghoshal argue that companies based in developing nations should use the entry of foreign multinationals as an opportunity to learn from these competitors by bench-marking their operations and performance against them. Furthermore , they suggest that the local company may be able to find way to differentiate itself from a foreign multinational , for example, by focusing on market niches that the multinational ignores or is unable to serve effectively if it has a standardized global product offering. Having improved its performance through learning and differentiated its product offering, the firm from a developing nation may then be able to pursue its own international expansion strategy. Even though the firm may be a late entrant into many countries, by bench-marking and then differentiating itself from early movers in global markets, the firm from the developing nation may still be able to build a strong international business presence. A good example of how this can work is given in the accompanying management focus, which looks at how Jollibee , a Philippine- based fast-food chain, has started to build a global presence in a market dominated by U.S multinationals such as Mc Donald’s and KFC.
Entry modes
Once a firm decides to enter a foreign market, the question arises as to the best mode of entry. Firms can use six different modes to enter foreign market: exporting, turnkey project, licensing, franchising, establishing joint ventures with a host-country firm, or setting up a new wholly owned subsidiary in the host country. Each entry mode has advantages and disadvantages. Managers need to consider these carefully when deciding which to use.
EXPORTING
Many manufacture firms begin their global expansion as exporters and only later switch to another mode for serving a foreign market. We take a close look at the mechanics of exporting in the next chapter. Here we focus on the advantages and disadvantages of exporting as an entry mode.
Advantages
Exporting has two distinct advantages. First , it avoids the often substantial costs of Estab-lishing manufacturing operations in the host country. Second , exporting may help a firm achieve experience cure and location economies (see chapter 12). By manufacturing the product in a centralized location and exporting it to other national markets, the firm may realize substantial scale economies from its global sales volume. This is how Sony came to dominate the global TV market, how Matsushita came to dominate the VCR market , how many Japanese automakers made inroads into the U.S market, and how south Korean firms such as Samsung gained market share in computer memory chips.
Exporting has a number of drawbacks. First , exporting from the firm’s home base may not be appropriate if lower-cost locations for manufacturing the product can be found abroad (i.e., if the firm can realize location economies by moving production elsewhere).Thus, particularly for firms pursuing global or transnational strategies, it may be preferable to manufacture where the mix of factor conditions is most favorable from a value creation perspective and to export to the rest of the world from that location. This is not so much an argument against exporting as an argument against exporting from the firm’s home country . Many U.S. electronics firms have moved some of their manufacturing to the Far East because of the availability of low-cost, highly skilled labor there. They then export from that location to the rest of the world, including the United States.
A second drawback to exporting is that high transport costs can make exporting uneconomical ,particularly for bulk products. One way of getting around this is to manufacture bulk products regionally .This strategy enables the firm to realize some economies from large-scale production and at the same time to limit its t

Kết quả (Anh) 1:

SCALE OF ENTRY AND STRATERGIC COMMITMENTSAnother issue that an international business needs to consider when contemplating market entry is the scale of entry. entering a market on a large scale involves the commitment of significant resources. Entering a market on a large scale implies rapid entry. Consider the entry of the Dutch insurance company ING into the u.s. insurance market in 1999 (described in detail in the accompanying Management focus). ING had to spend several billion dollars to acquire its u.s. operations. Not all firms» have to resources necessary to enter on a large scale, and even some large firms» prefer to enter foreign markets on a small scale then build slowly as they become more familiar with the market.The consequences of entering on a significant scale-entering rapidly-are associated with the value of the resulting strategic commitments. A strategic commitments has a long-term impact and is difficult to reverse. Deciding to enter a foreign market on a significant scale is a major strategic commitment. Strategic commitments, such as rapid large scale market entry, can have an important influence on the nature of the competition in a market. For example, by entering the u.s. financial services market on a significant scale, ING has signaled its commitment to the market. This will have several effects. On the positive side, it will make it easier for the company to attract customers and distributors (such as insurance agents). The scale of entry gives both customers and distributors reasons for believing that ING will remain in the market for the long run. The scale of entry may also give other foreign institutions considering entry to the united states pause; now they will have to compete not only against indigenous institutions in the it unites states, but also against an aggressive and successful European institution. On the negative side, by committing itself to the heavily indebted it unites states, ING may have fewer available to support expansion in other desirable markets, such as Japan. The commitment to the united states limits the company strategic flexibility.As suggested by the ING example, significant strategic commitments are neither unambiguously good or bad. Rather, they tend to change the competitive playing field and unleash a number of changes, some of which may be desirable and some of which will not be. It is important for a firm to think through the implications of large-scale entry into a market and act accordingly. Or particular relevance is trying to identify how actual and potential competitors might react to large-scale entry into a market. Also, the large-scale is more than likely entrant in the small-scale entrant to be able to capture first-mover advantages associated with demand preemption, scale economies, and switching costs.The value of the commitments that flow from rapid large scale entry into a foreign market must be balanced against the resulting risks and lack of flexibility associated with significant commitments. But strategic inflexibility can also have value. A famous example from military history illustrates the value of inflexibility. When Herman Cortes landed in Mexico, he ordered his man to burn all but one of his ships. Cortes reasoned that by eliminating their only method of retreat, his man had no choice but to fight hard to win against the Aztecs-and ultimately they did.Balanced against the value and risks of the commitments associated with large-scale entry are the benefits of a small-scale entry. Small-scale entry allows a firm to learn about a foreign market while limiting the firm's exposure to that market. Small-scale entry is a way to gather information about a foreign market before deciding whether to enter on a significant scale and how best to enter. By giving the firm time to collect information, small-scale entry reduces the risks associated with a large-scale entry. But the lack of commitment associated with the small-scale entry may make it more difficult for the small-scale entrant to build market share and to capture first-mover or early-mover advantages. The risk-averse firm that enters a foreign market on a small-scale may limit its potential losses, but it may also miss the chance to capture first-mover advantages.SUMMARYThere are no "right" decisions here, just with decisions that are associated with different levels of risk and reward. entering a large developing nation such as china or India before most of other international business in the firm's industry, and entering on a large scale, will be associated with high levels of risk. In such cases, the liability of being foreign is increased by the absence of prior foreign entrants whose experience can be a useful guide. At the same time, the potential long-term rewards associated with such a strategy are great. The early large-scale entrant into a major developing nation may be able to capture significant first-mover advantages that will bolster its long-run position in that market. In contrast, entering developed nations such as Australia or Canada after other international businesses in the firm's industry, and entering on a small scale to first learn more about those markets, will be associated with much lower levels of risk. However, the potential long-term rewards are also likely to be lower because the firm is essentially forgoing the opportunity to capture first-mover advantages and because the lack of commitment signaled by small scale entry may limit its future growth potential.This section has been written largely from the prospective of a business based in a developed country considering entry into foreign markets. Christopher Bartlett and Sumantra Ghoshal have pointed out the ability that businesses based in developing nation have to enter foreign markets and become global players. Although such firms» tend to be late entrants into foreign markets, and although their resources may be limited, Bartlett and Ghoshal argue that such late movers can still succeed against well-established global competitors by pursuing appropriate strategies. In particular, Bartlett and Ghoshal argue that companies based in developing nations should use the entry of foreign multinationals as an opportunity to learn from these competitors by bench-marking their operations and performance against them. Furthermore, they suggest that the local company may be able to find way to differentiate itself from a foreign multinational, for example, by focusing on market niches that the multinational ignores or is unable to serve effectively if it has a standardized global product offering. Having improved its performance through learning and differentiated its product offering, the firm from a developing nation may then be able to pursue its own international expansion strategy. Even though the firm may be a late entrant into many countries, by bench-marking and then differentiating itself from early movers in global markets, with the firm from the developing nation may still be able to build a strong international business presence. A good example of how this can work is given in the accompanying management focus, which looks at how Jollibee, a Philippine-based fast-food chain, has started to build a global presence in a market dominated by u.s. multinationals such as Mc Donald's and KFC.Entry modesOnce a firm decides to enter a foreign market, the question arises as to the best mode of entry. Firms» can use six different modes to enter foreign market: exporting, turnkey project, licensing, franchising, establishing joint ventures with a host-country firm, or setting up a new wholly owned subsidiary in the host country. Each entry mode has advantages and disadvantages. Managers need to consider these carefully when deciding which to use.EXPORTINGMany manufacture firms» begin their global expansion as exporters and only later switch to another mode for serving a foreign market. We take a close look at the mechanics of exporting in the next chapter. Here we focus on the advantages and disadvantages of exporting as an entry mode.AdvantagesExporting has two distinct advantages. First, it avoids the often substantial costs of Estab-lishing manufacturing operations in the host country. Second, exporting may help a firm achieve experience cure and location economies (see chapter 12). By manufacturing the product in a centralized location and exporting it to other national markets, the firm may realize substantial scale economies from its global sales volume. This is how Sony came to dominate the global TV market, how Matsushita came to dominate the VCR market, how many Japanese automakers made inroads into the u.s. market, and how south Korean firms» such as Samsung gained market share in computer memory chips.Exporting has a number of drawbacks. First, exporting from the firm's home base may not be appropriate if lower-cost locations for manufacturing the product can be found abroad (i.e., if the firm can realize location economies by moving production elsewhere).Thus, particularly for firms» pursuing global or transnational strategies, it may be preferable to manufacture where the mix of factor conditions is most favorable from a value creation perspective and to export to the rest of the world from that location. This is not so much an argument against exporting as an argument against exporting firm's from the home country. Many U.S. electronics firms» have moved some of their manufacturing to the Far East because of the availability of low-cost, highly skilled labor there. They then export from that location to the rest of the world, including the United States.A second drawback to exporting is that high transport costs can make exporting uneconomical, particularly for bulk products. One way of getting around this is to manufacture bulk products regionally.This strategy enables the firm to realize some economies from large-scale production and at the same time to limit its t

Kết quả (Anh) 2:

SCALE OF ENTRY AND STRATERGIC Commitments
mà Another issue an international business needs to market entry is như khi contemplating the scale of entry. entering a market on a large scale involves the Commitment of the significant resources. Entering a market on a large scale implies rapid entry. Như entry of the Dutch insurance company ING Into the US insurance market in 1999 (tả in detail in the Management Accompanying focus). ING had to spend vài billion dollars to Acquire the its US operations. Not all resources to cần Firms have to enter on a large scale, and some large chẵn Foreign Markets Firms prefer to enter on a small scale then slowly build As They Become more familiar with the market.
The Consequences of entering the significant on a scale - entering rapidly - are associated with the value of the quả Strategic Commitments. A Strategic Commitments of long-term has a impact and is difficult to reverse. Deciding to enter a Foreign market on the significant scale is a major a Strategic Commitment. Strategic Commitments, như large scale rapid market entry, can have an Important Influence on the nature of the competition in a market. For example, by entering the US market on a Financial Services the significant scale, ING has signaled the its Commitment to the market. This sẽ have vài effects. On the positive side, it Will Make it Easier for the company to Attract Customers and distributors (như insurance agents). The scale of entry cả Gives Customers and distributors Reasons for believing ING That Will Remain in the market for the long run. The scale of entry sewing give other Foreign Institutions am also considering entry to the united states pause; They now not only sẽ have to Compete Against Institutions in the unites states indigenous, but am also an aggressive and successful European Against Institution. On the negative side, by committing to the unites states heavily chính nó, ING Garment Fewer have available to support expansion in other desirable Markets, như Japan. The Commitment to the united states limits the company Strategic flexibility.
As Suggested by the ING example, the significant Neither Strategic Commitments are unambiguously good or bad. Rather, They Tend to change the competitive playing field and Unleash a number of changes, some of mà be desirable and unfortunately some of sẽ not be. It is Important for a firm to think through the implications of large-scale entry and act accordingly Into a market. Or Particular relevance is thử Identify how Actual and Potential competitors might React to large-scale entry Into a market. Also, the large-scale entrant is more Likely the small-scale coal thể entrant to capture first-mover Advantages associated with preemption demand, scale economies, and switching Costs.
The value of The Commitments That rapid large scale flow from entry Into Foreign market Phải a Balanced Against the quả Risks and Lack of flexibility associated with the significant Commitments. But cũng Strategic inflexibility can have value. A famous example from military history illustrates the value of inflexibility. When Herman Cortes landed in Mexico, he ordered his man to burn all but one of his ships. That Cortes reasoned spend the weekend only by eliminating method of retreat, had no choice but his man to fight hard to win Against the Aztecs - and ultimately They did.
Balanced Against the value of The Commitments and Risks associated with large-scale entry are the benefits of a small-scale entry. Small-scale entry cho phép a firm to learn about a Foreign market while limiting the firm's exposure to market mà. Small-scale entry is a way to gather information about a Foreign market is before Deciding on a forwarded to enter the significant scale and how best to enter. By giving the firm time to collect information, small-scale entry reduces the Risks associated with a large-scale entry. But the Lack of Commitment associated with the small-scale entry unfortunately make it more difficult for the small-scale entrant to build market share and to capture first-mover or early-mover Advantages. The Risk-averse firm mà Enters a Foreign market on a small-scale garment potencial the its limit losses, but it unfortunately am also miss the chance to capture first-mover Advantages.
SUMMARY
There are no "right" here Decisions, Decisions That just are associated with Different Levels of Risk and reward. Developing nation entering a large china or India như Most of the before other international business in the firm's industry, and entering on a large scale, associated with high levels sẽ of Risk. In vd Cases, the liability of being Foreign is Increased by the Absence of prior experience có Foreign entrants can be a ích guide. At the same time, the potencial of long-term rewards are associated with vd a great strategy. The large-scale early entrant Developing Into a major garment nation thể capture the significant first-mover Advantages Long-run sẽ bolster the its market position in mà. In contrast, entering Developed nations như Australia or Canada after other international Businesses in the firm's industry, and entering on a small scale first to learn more about những Markets, Will Be associated with much lower levels of Risk. Tuy nhiên, the potencial of long-term rewards cũng Likely to be lower vì firm is essentially forgoing the opportunity to capture first-mover Advantages and vì Lack of Commitment signaled by small scale garment limit the its entry Growth potencial future.
This section Đã Written largely from the prospective of a business based in a country considering entry Developed Into Foreign Markets. Christopher Bartlett and Sumantra Ghoshal have pointed out the ability mà Businesses based in Developing nation have to enter trở Foreign Markets and global players. Although vd Firms Tend to be late entrants Into Foreign Markets, and spend the weekend although unfortunately be limited resources, Bartlett and Ghoshal Argue That vd late movers can still succeed Against well-established global competitors by pursuing the appropriate strategies. In Particular, Bartlett and Ghoshal Argue That shouldnt companies based in Developing nations use the entry of Foreign multinationals as an opportunity to learn from competitors by bench-marking những ask for their operations and performance Against added. Furthermore, chúng Suggest rằng local garment company thể find a way to differentiate from Foreign Multinational chính nó, for example, by focusing on market niches rằng Multinational ignores or is thể serve effectively if it has a global standardized product offering. Having the its improved performance through learning and the its Differentiated product offering, the firm then sew from a Developing Nation thể pursue international expansion strategy riêng. Even though the firm unfortunately be a late entrant Into many Countries, by bench-marking and then differentiating chính nó from early movers in Global Markets, the firm from the Developing nation unfortunately still build a strong thể international business presence. A good example of how this can work is given in the Accompanying management focus, mà looks at how Jollibee, a fast-food chain based Philippine-, has Started to build a global presence in a market dominated by US multinationals như McDonald and KFC.
Entry modes
Once a firm Decides to enter a Foreign market, the question arises as to the best mode of entry. Firms can use to enter six modes khác Foreign market: exporting, turnkey project, licensing, franchising, joint ventures thiết lập with a host-country firm, or setting up a new wholly owned subsidiary in the host country. Each entry has Advantages and disadvantages mode. Managers need to như những Carefully khi Deciding Which to use.
Exporting
Firms begin manufacture Many ask for their global expansion as exporters and only later switch to another mode for serving a Foreign market. We take a close look at the mechanics of exporting in the next chapter. Here We focus on the Advantages and disadvantages of exporting as an entry mode.
Advantages
Exporting has two distinct Advantages. First, it avoids the often Do estab-lishing substantial Costs of manufacturing operations in the host country. Second, a firm exporting garments help cure Achieve experience and location economies (see chapter 12). By manufacturing the product in a Centralized location and exporting it to other national Markets, the firm sewing Realize substantial scale economies from the its global sales volume. This is how Sony came to dominate the global TV market, Matsushita came to dominate how the VCR market, how many Japanese automakers made ​​inroads Into the US market, and how south Korean Firms Samsung gained market share như in computer memory chips.
Exporting has a number of drawbacks. First, exporting from the firm's home base if unfortunately not be the appropriate lower-cost locations for manufacturing the product can be found abroad (ie, if the firm can Realize economies location by moving production elsewhere) .Thus, Particularly for Transnational Firms pursuing global or strategies, unfortunately it be preferable to manufacture where the mix of factors is Most Favorable Conditions from a value creation perspective and to export to the rest of the world from mà location. This is not so much an argument as an argument Against Against exporting exporting from the firm's home country. Many US Firms have moved some of electronics manufacturing to the Far East spend the weekend vì the availability of low-cost, highly skilled Labor there. They then export from mà location to the rest of the world, Including the United States.
A second drawback is exporting to high transport That can make exporting uneconomical Costs, Particularly for bulk products. One way of getting around this is to manufacture bulk products regionally bật .This strategy the firm to Realize some economies from large-scale production and at the same time to limit the its t