Intergration Efforts Essay

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JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY MASTERS IN BUSINESS ADMINISTRATION (STRATEGIC MANAGEMENT OPTION) COURSE: GLOBAL STRATEGIC MANAGEMENT COURSE CODE: HCBA 3213 PERSONAL DETAILS: NAME: MICHAEL MULAMBA BUKHALA REG NO: HD333-C003-4317/2014 ASSIGNMENT 4: PERSONAL WORK Foreign Market Entry Strategies:  Assembly  Turnkey  Wholly owned Subsidiaries Foreign market entry strategies differ in degree of risk they present, the control and commitment of resources they require and the return on investment they promise. There are two major types of entry modes: 1) Non-equity mode, which includes export and contractual agreements, 2) Equity mode, which includes joint venture and wholly owned subsidiaries. The market-entry technique that offers the lowest level of risk and the least market control is export and import. The highest risk, but also the highest market control and expected return on investment are connected with direct investments that can be made as an acquisition (sometimes called Brownfield) and Greenfield investments (Terpstra V., Sarathy R. 2001). The choice of entry modes is one of the most critical strategic decisions a company has to make in its foreign expansion. A wrong choice can increase the costs of the entry and in extreme cases it may force the company to leave the market. To change the entry mode after a certain period of time is difficult, because a change of entry modes, from one to another, will lead to losses in time and money. This may lead to early defeats in a foreign and unfamiliar environment. Entry mode choice also affects future operations and decisions of the company in the specific market. As an example, the choice of entry modes might influence the future expansion within the market. If for instance a Joint Venture is chosen as an entry mode, a disagreement of how to expand further (e.g. acquisition or organic

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