Sage Advice on Going Global
Root's perspective is extremely insightful, and clearly the work of one who knows his topics from personal experience. It encapsulates what some of us have taken decades to learn through trial and error.
--Larry D. Bouts, president, International Division, Toys-R-Us, Inc.
The North American Free Trade Agreement, the new European common market, and the opening of Eastern Europe--among other recent geopolitical developments--have created unprecedented opportunities for American companies seeking to enter foreign markets. This guide offers executives practical advice, recently updated and expanded, on deciding which markets to enter, choosing a product for international distribution, designing an entry strategy, and developing an effective international marketing plan.
Figures xi
Tables xiii
Preface xv
1. Designing Entry Strategies for International Markets 1
The Elements of Entry Strategy 2
Classification of Entry Modes 5
Factors Influencing the Choice of the Entry Mode 8
Dynamics of Entry Mode Decisions 15
The International Marketing Plan 18
A Logical Flow Model of the Entry Decision Process 21
Summary 21
2. Deciding on the International Product Candidate and Target Market 25
Choosing the Candidate Product 25
Adapting Products for International Markets 29
Preliminary Screening of Country Markets 33
Estimating Industry Market Potentials 38
Estimating Company Sales Potentials 41
Summary 46
Annotated Bibliography of International Statistical Information 50
3. Entering International Markets through Exports 53
Exporting as a Learning Experience 53
Direct Exporting 55
Determining the Direct Export Channel 59
Choosing a Foreign Agent/Distributor 63
Export Operations 70
Getting Started in Export 76
Summary 80
4. Entering International Markets through Licensing and Other Contractual Arrangements 85
Licensing as a Primary Entry Mode 86
Protecting Industrial Property Rights Abroad 88
Profitability Analysis of a Proposed Licensing Venture 94
Negotiating the Licensing Agreement 98
Legal and Government Constraints on Licensing 108
International Franchising 109
Other Contractual Entry Modes 112
Summary 118
5. Entering International Markets through Investment 123
General Appraisal of the Investment Entry Mode 123
The Decision to Invest in a Target Country 126
Analyzing the Foreign Investment Climate: Assessing Political Risk 128
Analyzing the Foreign Investment Project: Assessing Political Risk 128
Analyzing the Foreign Investment Project: Assessing Profitability 136
Investment Entry through Acquisition 142
Investment Entry through Equity Joint Venture 146
Entry Negotiations with Host Governments 153
Summary 154
6. Deciding on the Right Entry Mode 159
The Naïve Rule 159
The Pragmatic Rule 160
The Strategy Rule 160
Comparing Entry Modes: An Approach 162
Summary 198
7. Designing the International Marketing Plan 171
The International Marketing Plan 171
Segmenting the Target Country Market 175
Pricing for International Market Entry 179
Deciding on an International Promotion Strategy 187
A Note to the Reader 198
Summary 198
8. Designing Entry Strategies in a Global Enterprise System 203
The Global Enterprise System 203
Organizing the Global Enterprise 207
Planning Entry Strategies in a Global Enterprise System 216
Grouping Country Markets for Common Marketing Strategies 223
Controlling Entry Strategies 227
Summary 232
9. Designing and Managing Entry Strategies Across Cultural Differences 237
What Is Culture? 238
Communicating Across Cultures 241
Negotiating Across Cultures 252
Developing Cultural Understanding 255
Summary 259
Index 265
About the Author 271
