Modes of Entry

Provide a scenario where a company would enter a foreign market using the following modes of entry. Be sure to provide one scenario for each mode:

• Exporting
• Licensing
• Franchising
• Creating a turnkey project
• Establishing joint ventures
• Setting up a wholly-owned subsidiary

Give justification for your choices using the advantages or disadvantages for each mode discussed in course readings.

Read the closing case attached and prepare a response to the following questions:

• GM entered the Chinese market at a time when demand was very limited. Why? What was the strategic rational?
• Why did GM enter through a joint venture with SAIC? What are the benefits of this approach? What are the potential risks here?
• Why did GM not simply license its technology to SAIC? Why did it not export cars from the United States?
• Why has the joint venture been successful to date?