Exporting Entry Modes by Ana Maria Gaviria

Study Notes

Exporting is a common initial entry method into international markets.
Unsolicited orders and expanding domestic customers can encourage firms to explore international markets.
Exporting often starts small and can evolve into more extensive foreign operations.
High fixed costs or limited global buyers may lead to concentrated production supplemented by exporting.

Proactive motives: Driven by a firm's desire to leverage unique competencies or new market opportunities.
Reactive motives: Response to pressures in the home or foreign markets, leading to adjustments over time.

Mindshare measures the strength of relationships in trust, commitment, and cooperation.
High mindshare levels correlate with better sales performance and willingness to prioritize a brand.
Key drivers of mindshare:
- Commitment and trust
- Collaboration
- Mutuality of interest and common purpose

Involves third-party organizations managing export activities, suitable for firms with limited international objectives.
Allows gradual market entry and lower resource commitment.

Export Buying Agent: Represents foreign buyers in the exporter's home country; operates on buyer's commission.
Broker: Acts as an intermediary between buyers and sellers, facilitating deals.
Export Management Company/Export House: Full-service firms managing all aspects of exporting for manufacturers.
Trading Company: Buys and sells foreign goods, handling logistics and sales.
Piggyback: Smaller firms use larger firms' established export operations to enter new markets.

The manufacturer directly engages in exporting activities, maintaining direct contact with foreign intermediaries.
Allows full control over pricing, delivery, and market strategy.

Involves partnerships or agreements with other firms for shared export marketing efforts.
Can optimize resources and expertise in foreign markets.

Indirect Exporting: Lower risk, gradual entry; may lack control and market insight.
Direct Exporting: Greater control and potential profit; higher risk, more resource-intensive.
Cooperative Exporting: Shared resources reduce risk; requires strong partner alignment and trust.