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What are the major types of market development strategies in international forms? Give a very brief description of each of them.

There are several major types of market development strategies that international firms can use to enter new markets or expand their presence in existing markets. These include:

  • Exporting: This involves selling products or services produced in the home country to customers in other countries. It is a relatively low-risk and low-cost way to enter new markets, but it may be limited by tariffs, trade barriers, and logistical challenges.
  • Licensing: This involves allowing another company in a foreign market to use the firm's intellectual property, such as patents or trademarks, in exchange for a fee or royalty. It is a way to enter new markets with minimal investment, but it may result in limited control over the use of the intellectual property.
  • Franchising: This involves allowing another company in a foreign market to use the firm's business model, brand name, and operating systems in exchange for a fee or royalty. It is a way to expand quickly with minimal investment, but it may result in limited control over the franchisee's operations.
  • Joint ventures: This involves partnering with a local company in a foreign market to jointly operate a new business. It allows for shared risks and resources, as well as access to local expertise and knowledge, but it may result in conflicts over decision-making and profits.
  • Foreign direct investment: This involves investing in and establishing a physical presence in a foreign market, such as through the acquisition of a local company or the construction of new facilities. It allows for greater control over operations and resources, but it involves greater risks and costs than other market development strategies.
  • Strategic alliances: Partnering with another company in a foreign market to share resources and risks in pursuit of a common goal.
  • Acquisition: Purchasing an existing company in a foreign market to gain immediate access to its resources and customer base.
  • Greenfield investment: Building a new facility in a foreign market to create a new business from scratch.
  • Turnkey projects: Providing a complete solution to a customer in a foreign market, including design, construction, and equipment, before turning over the project to the customer.
  • Management contracts: Providing management services to a company in a foreign market in exchange for a fee.

Overall, the choice of market development strategy will depend on a variety of factors, including the level of investment, the level of control desired, the level of risk, and the level of familiarity with the local market.


 



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