BUS613: Advanced International Business

6a. Compare and contrast strategies for entering a new international market, such as direct exporting, mergers and acquisitions, and establishing business partnerships 

• What are some advantages of using direct exporting versus other market entry strategies? What are some of the downsides?
• What areas should you analyze when considering an international business partnership?
  

Several popular market entry strategies, such as direct exporting, joint ventures, and mergers and acquisitions, are used to expand into new international markets. They each bring a certain level of risk, reward, and advantages over other options. You should be able to identify what type of companies pursue certain international market entry strategies and how they can assist the company in getting their product into the new market efficiently.
 
To review, see Foreign Agents or Distributors and Partnering Agreements.
 

6b. Select international market entry strategies and apply them in a real-world scenario 

• In what situations would you select these market entry strategies to benefit your business? Direct exporting, mergers and acquisitions, and foreign agents/distributors?
• Why would a company select a foreign agent/distributor instead of a partnering agreement with a foreign firm? What elements would make each more advantageous?
• What elements differ between a joint venture and a partnering agreement?
  

It is important to understand why each market entry strategy is selected and how each would be applied in a real-world scenario. There are reasons a business would select a partnering agreement instead of a distributor of their products or go through a foreign agent instead of directly exporting to the consumer. Each company must assess its strengths and weaknesses and its level of resources when entering a new international market. They may have the resources and product recognition in that market to do direct exporting. In contrast, another company that has limited exposure to consumers in that market may opt for a distributor agreement to benefit from a local company's resources and networks.
 
To review, see Foreign Retailers, Direct Purchasing, and Joint Ventures.
 

6c. Differentiate trends that are more common in certain industries, such as direct exporting or partnering, and explain why they occur 

• What type of business would prefer direct exporting as opposed to other international market entry strategies?
• Why are joint ventures popular among large corporations?
• Why do companies need foreign business partnering arrangements in new markets?
  

Certain industries and types of businesses will prefer international market entry strategies that are more beneficial to their situation. A large company with many resources will not need a joint venture with another company that is structured the same way, as they would each need to bring something unique to strengthen the partnership to make it work.
 
To review, see New Industries and Markets.
 

6d. Analyze a plan for a merger and acquisition 

• Why would a company invest money that can be invested elsewhere into a merger or acquisition? What are the main motivating factors?
• Why do some mergers and acquisitions fail?
  

Mergers and acquisitions on paper may seem straightforward, but implementation and the transition period can be challenging. As you study this section, you should come out of it with a very good understanding of why a company would invest their money into a merger and acquisition instead of placing their money elsewhere. For example, a company may have cash on hand to invest and seek to expand their access to new markets, therefore purchasing a company in that new industry. This could result in new markets, supply, and diversified revenue.
 
To review, see Mergers and Acquisitions
 

6e. Analyze the increasing interdependence of global supply chains and markets 

• How could a natural disaster in Asia affect supply chain management in the United States?
• Why would a war in the Middle East affect the price of oil in Europe?
  

The interdependence of the global supply chain affects everyday life for most people worldwide. It affects the price of electronics, what you pay at the gas pump, and how much your avocados cost at the grocery store. As the world has become more connected through globalization, supply chain interruptions in one part of the world can have a ripple effect around the globe and affect billions of people. We have recently experienced supply chain disruptions due to several different factors, which have highlighted the importance of diversifying suppliers and channels of distribution.
 
To review, see New Industries and Markets.
 

Unit 6 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• direct exporting
• distributor
• foreign agent
• joint venture
• merger and acquisition
• partnering agreement