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Globalization Strategies - Essay Example

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During the past sixty years the business world has changed a lot. The globalization movement is one of the primary reasons for the changes. Organizations began to realize that in order to achieve growth firms had to expand beyond their domestic markets. If a country only has a population of one million this implies that the amount of potential customers is limited to the population of the country…
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Globalization Strategies
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Globalization Strategies

Download file to see previous pages... The simplest and easiest globalization strategy to implement is exporting. There are two types of exporting: indirect and direct export. When a company begins to use exporting to achieve globalization they implement indirect exporting. Indirect exporting involves the use of intermediaries to introduce a product into a foreign market. One of the disadvantages of indirect exporting is that the profits have to be shared with the intermediary. The second type of exporting strategy is direct exporting. Direct exporting can be implemented in several ways. Four ways to implement direct exporting are: Domestic based export department or division Overseas sales branch or subsidiary Traveling export sales representative Foreign based distributors or agents (Kotler, 2003). A second market entry strategy is licensing. Licensing is also considered a relatively easy way to achieve market penetration into a foreign marketplace. In a licensing agreement the licensor licenses a foreign company to use a manufacturing process, trademark, patent, trade secret, or other item of value for a fee or a royalty (Kotler, 2003). Due to the fact that a second party is involved in the process the profitability of this market entry strategy is lower than other options. ...Download file to see next pagesRead More
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