JOINT VENTURE, DIRECT INVESTMENT, PARTNERSHIP AND FRANCHISING

Joint Venture, Direct Investment, Partnership and Franchising

[Name of the Institute]

Joint Venture, Direct Investment, Partnership and Franchising

Introduction

Entering into a new market requires the company to develop strategies and plans that can make their entry successful. Today, many companies are entering the global and international market to avail the opportunity of growing and expanding. This helps businesses in gaining a position in the international market and attracting more customers. Entering into a new market is a risk for the company, and it is necessary that managers take their decisions wisely. They have to plan their entrance and decide which market entry strategy will help them in achieving success and growth. There are four different market entry strategies that include joint venture, direct investment, partnership and franchising. The managers have to decide that which strategy can help their business in entering into the international market successfully (Spulber, 2007).

This paper will discuss the four market entry strategies that can be implemented by businesses in order to enter the international market successfully. Managers can take their decision by analysing the advantages and disadvantages of all the market entry strategies. This will help them in taking their decisions wisely, which will help the business in growing and developing successfully. Entering into the international market requires the business to deal with cultural differences, local challenges and competitors, economic conditions, financial and operating risks and many more. It is important for managers to analyse the international market using micro and macro-economic indicators. This will help the business in taking wise decisions regarding its investment in the international market (Dyer and Harbir, 1998, pp. 660-679).

Body

Mainly, there are four market entry strategies that can help businesses in entering the international market. Entering into the foreign market is a major step, and in this case managers should act wisely. The four market entry strategies are discussed in this paper along with its advantages and disadvantages. The managers can wisely take their decisions by keeping in view the mission, vision and the capital investments of the business. They should keep in mind the goals and targets of the company as well as the resources of the company. The management should also have an idea of their products, services and target market. This will help them in taking their decisions wisely (Dyer and Harbir, 1998, pp. 660-679).

Joint Venture

A joint venture is an extensive form of participation where two or more investors share the ownership and control over the business. They share rights and have equal rights over the operations conducted by business. Many businesses opt for joint ventures for entering into the international market. The managers can select this strategy by analysing the pros and cons of joint venture strategy. A joint venture is a strategy that has helped many large businesses in the past, where the investment and risk was high (Dyer and Harbir, 1998, pp. 660-679).

The advantages of joint venture include enhanced and joint financial strength, sharing of risk between the partners and owners, and know-how ...