The market entry strategies for a Logistics firm based in Germany - Essay Example

Download file to see previous pages Exporting involves marketing and sales of products which are produced domestically but send to other countries for sales. This is a very traditional method which helps in selling and earning revenue of those products which can be produced in adequate amount in the country. As in exporting the goods are produced in the home country, so the investments related to foreign production are not required (Hisrich 198). In case of exporting, most of the expenses are incurred for marketing. Exports are of two types: a) direct export, and b) indirect export. Direct exports works best when the volume of goods to be exported is small. It involves direct sales of goods to other countries without any intermediaries. While in case of indirect export the export takes place through intermediaries. Control over the product does not remain with the exporter (McDonald, Burton, and Dowling 208; Kotabe, and Helsen 299).
Advantages
1. The foreign market and the representatives can be chosen.
2. The trademark, goodwill, patent rights can be protected.
3. Rate of sales is higher.
Disadvantages
1. The start-up cost is higher and the risk is also higher.
2. Requirement of information is also higher in case of exports.
3. Marketing the products requires longer time.
Licensing
Licensing agreements developed by the firm allows the foreign firm to either develop or market the product of the company for a specific time period. In this case, the licensor is the home country provides limited resources and rights to the licensee to the host country. These rights include managerial skills, patents, technology or trademarks for making it possible for the host country to manufacture or market the products (Doing Business Internationally 13). The licensor may take onetime payment, royalty payments, or technology fees. Since this is considered as the mode of entry, so the transference of information in between the licensee and the licensor is strong and the decision of developing the license also strongly depends on the government of the home and host country’s governments (Hoskisson 282; Kotabe, and Helsen 301). Advantages 1. Achieve additional revenue for technical knowledge and services. 2. Can be expanded rapidly as not much risks involved. Disadvantages ...Download file to see next pagesRead More