Assignment Background: One Of The Important Decisions To Mak

Assignment background One of the important decisions that businesses ne

One of the important decisions that businesses need to make in its internationalisation is to choose an appropriate entry mode to foreign markets. Imagine you are working for a Singapore company listed on Singapore Exchange and have been asked to expand the company’s product/service to Australia. Your task is to choose the most appropriate entry mode for your company based on your analysis of a range of related factors.

Which company shall I choose for this assignment? A list of Singapore companies will be provided to you. What products/services of the company should I focus on? Most of the given companies have more than one segment of products/services. In this assignment, you ONLY need to focus on one product/service of the company.

Assignment question: What is the most appropriate market entry mode, and why? In this assignment, you need to choose the most suitable entry mode for the chosen company and MUST justify it by analysing the following:

  • Company analysis: justify your choice of entry mode by analysing the company’s resources and the nature of its main products/services
  • Context analysis: justify your choice of entry mode by considering the cultural, legal, political, economic, and market environments related to the product/service in the target (Australian) market;
  • Scale analysis: why do you think your choice of the entry mode suits the company in terms of scale, risk level, return level, control level and integration level (level of integrating with the local market)?

Paper For Above instruction

The selection of an appropriate market entry mode is crucial for a company aiming to expand internationally, especially when entering a new market such as Australia. This decision influences the company's resource allocation, risk exposure, degree of control, and potential for success. In the context of a Singaporean company listed on the Singapore Exchange, careful consideration of internal resources, and external environmental factors, is needed to determine the most suitable entry strategy, whether through exporting, licensing, franchising, joint ventures, or wholly owned subsidiaries.

This paper explores the rationale behind choosing a particular entry mode by analyzing three key dimensions: company resources and product nature, contextual environment of the Australian market, and the scale-related factors influencing risk and control. Each dimension contributes insights into the strategic fit between the company's capabilities and the external opportunities and challenges in Australia.

Firstly, the company's internal resources — including financial strength, technological capabilities, and managerial expertise — significantly shape the feasibility of certain entry modes. For instance, a resource-rich firm with advanced technology and strong managerial skills may prefer establishing a wholly owned subsidiary to fully control operations. Conversely, a smaller firm with limited resources might opt for licensing or franchising to mitigate risks and investments.

Secondly, understanding the Australian market environment is essential. Australia's legal framework, trade policies, cultural preferences, and economic stability influence the suitability of various entry modes. The country’s open trade policies and strong legal protections for intellectual property suggest that modes like joint ventures or wholly owned subsidiaries could be advantageous for firms seeking control and protection of proprietary assets. Cultural similarities and consumer behavior patterns also affect product adaptation and marketing strategies.

Finally, the scale analysis involves evaluating risk levels, expected returns, and the desired level of control and integration with local operations. For example, larger companies may prefer directly investing via a wholly owned subsidiary due to the potential for higher returns and full control, accepting higher risks. Smaller firms, however, may prefer less risky modes like licensing, which require lower investments but also offer lower control and profit margins.

In conclusion, identifying the most appropriate entry mode involves aligning internal company capabilities with external market conditions and strategic goals. An optimal choice balances risk with control, investment with potential returns, and aligns with the company’s long-term internationalization strategy.

References

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