Lecture 4 Blackboard Version Entry Modes
Lecture 4 Blackboard Version Entry Modes
Lecture 4 Blackboard Version Entry Modes
External Factors:
oCAGE distance (Ghemawat)
oAppropriate intermediaries
Marketing control
• Tariffs/ quotas
• Natural barriers
Intermediate
modes Shared control and risk,
(contractual split ownership)
modes)
PROS CONS
Brompton Electric
3 types of strategic
alliance
1.Manufacturing
alliance
2.Distribution alliance
PROS CONS
• Complementary skills 🡪 new • Shared profit
opportunities • Disagreements between parties
• Increased speed of market entry • Diminished control
• Experienced local partner • Potential future competitor
• Legislation can restrict foreign
ownership
• Shared R and D
• Accessing additional financial
resources
• Shared Risk
• Diversification:
• Many food and drink
companies are
following the mergers
and acquisitions
route
• A high cost way to gain a
foothold in new or fast-
moving sectors
since 1873
• Greenfield’
• + control; establish
culture
• - highest risk
• Consideration of
divestment strategy/
implications
Key
theories
Entry
Modes
Product type
Competitive
Company
Pressures
Resources
Speed required
Company resources Company resources and
Market development
Christine Comrie 2019-20 UMKD6Q-15-3
Key thoughts
‘Oil stain’
• Establish in one place/ flagship
store
• get experience/ market
information
• then spread across the country
(Hollensen, 2011)
Christine Comrie 2019-20 UMKD6Q-15-3
Unilever in
Vietnam –
1990’s
Manufacturer
or Importer
Speciality
Distributor
Primary Self-Service Department
Wholesaler Store Store
Secondary
Wholesaler
Japan has highly established multi-layer
Tertiary distribution systems.
Wholesaler Most retail outlets are owned by the distributors
Foreign companies find it difficult not to use
Retailer intermediaries (agents and distributors).
Consume
r Christine Comrie 2019-20 UMKD6Q-15-3
11C’s of channel selection
• Indirect:
• Independent agents/
distributors, trading companies,
wholesalers
• B2B: Agents,distributors,sales
operation, internet 🡪 Business
Buyer
• Consumer goods: mail order,
internet, wholesalers, agents/
distributors, retailers 🡪
Customers
• Direct:
• Own Transport
• Own salesforce
• Retail stores