Entry Negotiations with Host Governments

In closing this chapter, it is fitting to make some brief comments on entry negotiations with host governments. Increasingly, the developing countries are adopting comprehensive laws and regulations on foreign investment that cover application procedures for investment authorization, screening criteria for the approval of investment applications, obligations imposed on approved investments, benefits availa­ble to

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The Naive Rule for Deciding on the Right Entry Mode

Managers follow the naive rule when they consider only one way to enter foreign markets.1 Statements such as “We only export” or “We only li­cense” are examples of the naive rule. Commonly, this rule is implicit in the behavior of managers rather than explicit in a policy statement. Whatever its expression, the naive rule

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The Pragmatic Rule for Deciding on the Right Entry Mode

Most firms appear to start their international business careers by using the pragmatic rule. In discussing the dynamics of entry mode decisions in Chapter 1, we pointed out that a company ordinarily initiates international business with a low-risk entry mode, which is almost always some form of export. The outstanding advantages of export as

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The Strategy Rule for Deciding on the Right Entry Mode

The strategy decision rule—use the right entry mode—is more difficult for managers to follow than the pragmatic rule, because it demands systematic comparisons of alternative modes. But it also guides managers to better entry decisions. Our discussion of entry modes in the previous chapters should convince anyone that the entry decision process cannot be

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Comparing Entry Modes: An Approach

The approach offered here interprets the strategy decision rule as follows: Choose that entry mode that maximizes the profit contribution over the strategic planning period within the constraints imposed by (1) the avail­ability of company resources, (2) risk, and (3) nonprofit objectives. Figure 16 depicts this approach. Managers start by reviewing all entry modes

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The International Marketing Plan

The scope of an international marketing plan was indicated in Chapter 1, and there is no need to repeat what was said there. To design a marketing plan, managers must make decisions, both individually and collectively, on policies relating to the product, pricing, channels, promotion, and logistics. These policy areas (commonly referred to as

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Segmenting the Target Country Market

Only after carefully defining the foreign target market—the prospective household consumers or industrial/government users of the candidate product—can managers design the most appropriate marketing plan. The target market may be conceived as the total market covering all possible consumers/users throughout the target country or, alternatively, as part of the total market that includes only

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Pricing for International Market Entry

How should managers price a candidate product for international market entry? Few questions in international marketing are more troublesome. Managers must decide on a pricing policy that will enable their company to attain its several goals in the target market (such as market share, sales volume, and growth) over the strategic planning period, and

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Deciding on an International Promotion Strategy

In Chapter 1, we defined promotion as all communications initiated by a seller that are addressed to final buyers, channel members, or the general public with the intent to create immediate sales or a positive image for the seller’s product or company. Promotion includes personal selling, advertis­ing, sales promotion, and publicity. Promotion in international

The Global Enterprise System

The global enterprise is a company that (1) enters markets throughout the world by establishing its own sales and production subsidiaries in several countries and by using other entry modes, (2) exercises control over its subsidiaries, and (3) strives to design and execute corporate strategies in marketing, production, finance, and other functions from a

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Organizing the Global Enterprise

How should a global enterprise organize to best exploit market opportuni­ties throughout the world? How should it group its diverse activities? How should it coordinate them? What should be the authority and responsibility of managers at corporate, regional, and country levels? What should be the reporting and control relationships between these three levels? In

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Planning Entry Strategies in a Global Enterprise System

The elements of a foreign market entry strategy, as depicted in Figure 1 in Chapter 1, are the same for a global enterprise as for other international companies. The constituent entry plan always focuses on a single product (or product line) and a single foreign target market. What is different in the global enterprise

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Grouping Country Markets for Common Marketing Strategies

The benefits of a global enterprise system for constituent entry strategies are most evident when managers can design an effective marketing plan for a group of countries. But to do so, managers need to search for country markets that will respond to a standard marketing program. When done right, grouping facilitates entry planning, in

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Controlling Entry Strategies

In Chapter 1, Figure 1 depicts a control system as the fifth element of an international market entry strategy. Our intent here is to alert readers to the need for controlling entry strategies rather than describe control systems in any detail. A management control system has three functions: (1) monitoring oper­ations to identify variances

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What Is Culture?

Culture may be defined as the unique lifestyle of a given human society: a distinctive way of thinking, perceiving, feeling, believing, and behaving that is passed on from one generation to another. Anthropologists agree on three features of every human culture.1 First, culture is not something that is inherited; rather, it is learned by

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Communicating Across Cultures in Foreign Investments

Communication can be successful in conveying an intended meaning only when the sender’s perceptual field—his experience of the world—is congru­ent with the receiver’s perceptual field. That is to say, communication is a process of sharing perceptions. A message falling outside the receiver’s perceptual field, therefore, cannot transmit the sender’s meaning, although it may well

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Negotiating Across Cultures in Foreign Investments

Cross-cultural negotiations are a fact of life for the international manager, whether he is trying to get host government approval for a project, set up a local distribution system, acquire a local company, establish a joint venture, or start any other endeavor abroad. Indeed, it is not too much to say that the international

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Developing Cultural Understanding in Foreign Investments

How can international managers develop cultural self-awareness and thereby transcend ethnocentric perceptions, beliefs, feelings, and behavior in communicating with foreign nationals? As earlier observed, cultural self- awareness ultimately depends on experiential learning that is gained by interacting with persons of other cultures. It can be described as a cumula­tive process of learning to understand

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Four elements as foundation of the research process

As a starting point, it can be suggested that, in developing a research proposal, we need to put considerable effort into answering two questions in particular. First, what methodologies and methods will we be employing in the research we propose to do? Second, how do we justify this choice and use of methodologies and

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What about ontology?

In the research literature there is frequent mention of ontology and you might be wondering why ontology does not figure in the schema developed to this point. Ontology is the study of being. It is concerned with ‘what is’, with the nature of existence, with the structure of reality as such. Were we to

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