Compare Different Types Of Entry Modes Into A Selected BR
Compare different types of entry of modes into a selected BRIC markets
Instructions: Please read the following articles and write a short essay: Export Performance-wiem06029.pdf, Global Sourcing Strategy-wiem.pdf, International Franchising-wiem.pdf, Market Entry and Expansion-wiem06016.pdf. Based on the above article(s) and guiding questions below, you are required to write an essay of at least 250 words (about 1 page double spaced with 12 font) and spell-checked with minimal grammatical errors. The grading of this assignment is based on the attached rubric.
Essay: Compare different types of entry modes into a selected BRIC market (choose one country from Brazil, Russia, India, and China for your discussion).
Paper For Above instruction
The rapid economic development of BRIC countries—Brazil, Russia, India, and China—has prompted many international businesses to consider expanding into these emerging markets. The choice of entry mode significantly influences the success of such expansion efforts, as each mode offers unique advantages and risks. This essay compares different entry modes into a selected BRIC market, focusing on India, and examines exporting, franchising, and wholly owned subsidiaries as viable strategies.
Exporting is the simplest and often initial method for companies entering India. It involves selling goods produced domestically into the Indian market without establishing a physical presence. Exporting minimizes risk and investment costs, making it suitable for companies testing the market. For example, North American food companies have successfully entered India via exporting, leveraging existing manufacturing facilities abroad, and shipping products directly to Indian distributors. However, exporting faces challenges such as high shipping costs, tariffs, and limited market control, which can hinder responsiveness to local consumer preferences.
Franchising offers an alternative mode, allowing firms to expand rapidly through local entrepreneurs while maintaining brand standards. This mode is particularly effective for service-based industries like hospitality or retail, where local knowledge enhances market acceptance. For instance, American fast-food chains like McDonald's and KFC entered India through franchising, adapting menus to local tastes and increasing their footprint efficiently. Franchising provides rapid expansion with lower capital outlay and shared risks but requires rigorous franchisee selection and ongoing brand management to ensure quality.
A more substantial and resource-intensive mode is establishing a wholly owned subsidiary, such as via joint ventures or greenfield investments. This mode grants full control over operations, intellectual property, and branding, enabling companies to tailor their strategies precisely to Indian consumers. For example, car manufacturers like Toyota and Volkswagen have established manufacturing plants and R&D centers in India, leveraging local incentives. While this mode offers maximum control and potentially higher returns, it entails substantial investment, regulatory complexities, and exposure to political and economic risks.
In conclusion, selecting the appropriate entry mode into India depends on the company's resources, risk tolerance, and strategic objectives. Exporting is suitable for initial market assessment, franchising accelerates growth with lower risk, and wholly owned subsidiaries offer control and long-term benefits with higher upfront commitments. Understanding these modes' nuances is essential for successful market entry and sustainable expansion in the dynamic Indian economy.
References
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2.Root, F. R. (1994). Entry Strategies for International Markets. Jossey-Bass.
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5.Lamb, C. W., & Wiesbeth, S. (2011). Market Entry Strategies in Emerging Markets: The Indian Context. International Journal of Business and Management, 6(3), 24–34.
6.Kumar, N. (2014). Strategies for Market Entry and Expansion in India. Indian Journal of International Business, 13(2), 162-177.
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8.Eisenstadt, D., & Burnam, R. (2003). Franchising in Emerging Markets: Challenges and Opportunities. Journal of International Marketing, 11(2), 29-49.
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10.Ghemawat, P. (2001). Distance Still Matters: The Hard Reality of Global Expansion. Harvard Business Review.