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Designing Brand Strategy for a Company - Essay Example

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This paper "Designing Brand Strategy for a Company" focuses on six basic strategies for entering a new market: export/import, licensing, joint venturing, franchising, consortia, and manufacturing. Generally, these represent a continuum from lowest to highest investment and concomitant risk-return potential…
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Designing Brand Strategy for a Company
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Designing Brand Strategy for a Company

Download file to see previous pages... Also, two companies may perceive the same risks in a country but still choose different strategies because of their firms differing tolerances of risk. More specifically, the different market-entry strategies can be encapsulated as follows:
Export/Import—The easiest and most common entry strategy, exporting also exposes a company to the lowest financial risk. An existing product is merely shipped to a foreign country. This strategy is very compatible with the domestic market extension outlook in international marketing.
Licensing—Another relatively low-risk approach to a new market, licensing involves granting the rights and methods for production to a host country firm in return for a royalty fee. Advantages include low capital requirements and circumvention of import restrictions or foreign ownership limitations. Its advantage of lower risk is countered by lower returns.
Joint Venture—A joint venture involves two companies that form a partnership under a new corporate name. Joint venturing is a low-risk market-entry strategy, which is popular among successful, large, internationally oriented businesses seeking to expand their own maturing home markets, or seeking new sources of raw materials. Notable are the strategic advantages of reducing both political and economic risks by combining the host country firms localized knowledge, skills, and systems with the foreign company's capital and technology. It also allows a foreign firm to operate in a market otherwise inaccessible due to trade barriers or hostility towards outsiders.
Franchising—A form of licensing, franchising combines the franchisee's local knowledge, capital, and entrepreneurial energy with the franchisors standard bundle of products, management expertise, and support systems. It is a fast-growing approach to market entry. Advantages are the low capital investment required and the speed of entry.
Manufacturing/Wholly-Owned Subsidiary—The highest-risk strategy with the highest potential return is investing capital to set up manufacturing or other operations in a foreign country.   ...Download file to see next pagesRead More
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