Foreign Entry Strategies

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1.0 Introduction Given the global opportunities, each year hundreds of entrepreneurial and growing companies consider international expansion as a marketing and growth strategy (Sherman & Levine, 2013). While capitalizing on the opportunities in the global marketplace, organizations seek to enhance their competitiveness. Numerous benefits including economies of scale, access to know-how and technology, diversified assets portfolio, access to toughest customers, establishment of a single worldwide brand, brand recognition and so on are identified with expanding operations abroad. According to Cateora and Graham, there are four distinct ways of foreign market entry: licensing and franchising, exporting, joint ventures and direct foreign investment. In the assigned project we will shed light on each of the mentioned methods and select one of the methods for expanding the operations of Samsung, keeping the market characteristics and company capabilities in mind. 2.0 Franchising A franchise can be defined as an agreement or license between two legally independent parties which gives a person or group of people the right to market a product or service using the trademark or trade name of another business (Beshel, 2001). The party granting the franchise is known as a franchisor and the party accepting it is known as the franchisee (or franchise holder) (Peretiatko, Humeniuk, D’Souza & Gilmore, 2009). Franchising can take two forms: product distribution and business format. The former uses franchisor trademark and logo to sell products like Exxon, whereas the latter requires provision of products and business methods such as McDonalds (Combs, Michael & Castrogiovanni, 2004). 2.1 Characteristics of Franchising * Noteworthy service component and unique distribution of responsibilities, decision rights, and profits between the franchisor and

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