Market Entry Strategy (Pemasaran Internasional)

Summary

In this video, Vanessa Gaffar delves into various market entry strategies for international businesses. She explores three main approaches: licensing, investment (foreign direct investment), and strategic alliances. Licensing offers low investment but limited control, while franchising adds another layer of business expansion. Investment strategies, including joint ventures and acquisitions, provide more control but come with higher risks. Finally, strategic alliances allow companies to pool resources and access new markets while maintaining independence. Each strategy has its benefits and challenges, with the choice depending on risk appetite, capital availability, and desired market control.

Takeaways

• 😀 Licensing involves a contract where a company allows another to use its assets (e.g., patents, trademarks) in exchange for royalties or fees.
• 😀 Licensing provides the benefit of additional profitability with a low initial investment, bypassing export quotas and tariffs.
• 😀 A major drawback of licensing is the limited control over the licensee's activities, which could lead to the exploitation of the company's resources.
• 😀 Joint Ventures (JV) involve sharing ownership of a new business entity in a foreign market, with risks and rewards shared between partners.
• 😀 Joint Ventures can help companies learn about new market environments and provide opportunities for synergies between partners.
• 😀 A disadvantage of Joint Ventures is the requirement for significant investment and potential conflicts between partners over strategy or performance.
• 😀 Foreign Direct Investment (FDI) allows companies to own or partially own operations in foreign markets, bypassing barriers like tariffs or quotas.
• 😀 FDI provides companies with control over their operations and facilitates the transfer of technology and manufacturing expertise.
• 😀 Strategic Alliances involve partnerships where companies collaborate to achieve long-term shared objectives while maintaining their independence.
• 😀 The main advantage of Strategic Alliances is the pooling of resources for specific projects, helping to fill gaps in expertise or resources.
• 😀 A disadvantage of Strategic Alliances is the sharing of control, which can lead to conflicts, and the risk of strengthening competitors through collaboration.

Q & A

What is a market entry strategy?

A market entry strategy is a plan or approach that a company uses to introduce its products or services into a foreign market. The choice of strategy depends on factors such as the level of control desired, the investment capacity, and the risks involved.

What are the three main types of market entry strategies?

The three main types of market entry strategies are: Licensing, Investment (Foreign Direct Investment), and Strategic Alliances.

What is licensing as a market entry strategy?

Licensing is a contractual agreement where one company allows another to use its intellectual property, such as patents, trademarks, or product formulations, in exchange for royalties or licensing fees.

What are the advantages of licensing?

Licensing offers several advantages: it provides additional profitability with low initial investment, allows access to foreign markets with fewer trade barriers like tariffs or quotas, and offers attractive return on investment due to lower implementation costs.

What are the disadvantages of licensing?

The disadvantages of licensing include limited participation, potential for unprofitable returns, a lack of control over operations, and the risk of the licensee exploiting the company's resources.

What is foreign direct investment (FDI)?

Foreign direct investment involves a company taking ownership of, or investing in, business operations outside its home country. This can include joint ventures, minority or majority equity stakes, or outright acquisitions.

What are the benefits of foreign direct investment (FDI)?

FDI offers several benefits: it provides control over operations in foreign markets, helps bypass tariffs or quotas, enables technology and manufacturing know-how transfer, and grants direct access to local markets.

What is a joint venture?

A joint venture is a type of foreign direct investment where a company partners with a local business in a foreign market. Both companies share ownership and responsibilities in a newly created entity.

What are the pros and cons of joint ventures?

The pros of joint ventures include shared risks and costs, the ability to access local market knowledge, and combining strengths with a local partner. The cons include the need for strong coordination, the risk of conflicts between partners, and the potential for competition from within the joint venture.

What are strategic alliances and how do they differ from joint ventures?

Strategic alliances are collaborations between two or more companies to achieve mutual goals while maintaining independence. Unlike joint ventures, strategic alliances do not require the creation of a new entity, and each partner remains fully independent while sharing resources and knowledge.

What are the advantages and disadvantages of strategic alliances?

The advantages of strategic alliances include sharing resources, reducing risks, gaining access to new markets, and learning from each other. Disadvantages include the need to share control over the project, the possibility of strengthening competitors, and potential conflicts among the partners.

How does a company choose the best market entry strategy?

A company chooses its market entry strategy based on factors such as the level of investment it is willing to make, the desired level of control, the market risks, and the barriers to entry in the target market. Each strategy has its own set of trade-offs.