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Questions and Answers
What are some factors important for exporting to foreign markets?
Exporting does not involve any distribution issues.
False
What might affect the company’s entry into foreign markets?
Cultural factors, marketing factors, government policies
Name an example of a Japanese company that relies on host country's distribution networks.
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Distribution issues include own distribution networks and networks of _____ country’s companies.
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Study Notes
Modes of Entering International Business
- Exporting is a primary method for entering foreign markets, often seen as a less risky initial strategy.
- Factors influencing exporting include government policies, such as export regulations, import policies, export financing, and currency exchange controls.
- Understanding cultural aspects and customer responsiveness is critical for successful exporting.
Risks and Market Understanding
- Companies must assess the unique risks of the host country’s market, including exchange rate fluctuations and political stability.
- Example: A British company exporting products to a foreign market must ensure its offerings align with local customer awareness and preferences.
Distribution Networks
- Distribution costs play a significant role and include physical distribution, warehousing, packaging, transportation, and inventory carrying costs.
- Companies may depend on the distribution networks of local subsidiaries. For instance, Japanese firms like Sony and Minolta utilize their local subsidiaries' networks effectively.
Case Study: General Motors
- General Motors engages in intercorporate transfers to increase export revenues, highlighting the importance of leveraging global networks for market entry.
- The company focuses on facility development in strategic markets, such as Latin America, to boost operations and profitability in those regions.
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Description
Test your knowledge on the codes and concepts related to entering international business. This quiz covers key principles, terminology, and regulations that influence global trade. Perfect for students and professionals looking to enhance their understanding of international business dynamics.
