How to elaborate the points as below: Entry Mode Advantage Disadvantage Exporting The business can choose his representative in the foreign market. This also helps the business to test if its product will be a success For physical business, this is a costly strategy. A lot of research for the representatives has to be done. Licensing The company can get vertical integration without heavy capital investment. The company will not have control over the use of its intellectual property by the Licensor. Franchise This is a low cost strategy and the franchisee has the knowledge of the local market. This is a source of passive income. There is less control over the operations of the franchise partner. The franchisees can learn from your business and become competitors in future. Joint Ventures The business can leverage the expertise of the joint partner. Transfer of technology and assets is easier. Internal clashes can happen sue to changes in culture of both organizations. The dissolution is a time-consuming process. Wholly Owned Subsidiaries The company can diversify and manage risk. The risk of entering into a new market directly can be reduced. The parent company will have to pay more taxes which will be levied on the subsidiary. Turnkey contracts The cost of the contract remains fairly constant. The owner will not have to bear any responsibility. The owner does not have any control. The customer association is restricted

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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How to elaborate the points as below:

Entry Mode	Advantage	Disadvantage
Exporting	The business can choose his representative in the foreign market. This also helps the business to test if its product will be a success	For physical business, this is a costly strategy. A lot of research for the representatives has to be done.
Licensing	The company can get vertical integration without heavy capital investment.	The company will not have control over the use of its intellectual property by the Licensor.
Franchise	This is a low cost strategy and the franchisee has the knowledge of the local market. This is a source of passive income.	There is less control over the operations of the franchise partner. The franchisees can learn from your business and become competitors in future.
Joint Ventures	The business can leverage the expertise of the joint partner. Transfer of technology and assets is easier.	Internal clashes can happen sue to changes in culture of both organizations. The dissolution is a time-consuming process.
Wholly Owned Subsidiaries	The company can diversify and manage risk. The risk of entering into a new market directly can be reduced.	The parent company will have to pay more taxes which will be levied on the subsidiary.
Turnkey contracts	The cost of the contract remains fairly constant. The owner will not have to bear any responsibility.	The owner does not have any control. The customer association is restricted.

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