Welcome to Module 7

The first part of this unit focuses on the basic market entry decisions for firms. The six most common foreign entry strategies are discussed. These are: exporting, turnkey projects, licensing, franchising, establishing a joint venture with a host country firm, and setting up a wholly owned subsidiary in the host country. The advantages and disadvantages of each of these strategies are discussed.

The second part of this unit focuses on the “nuts and bolts” of exporting and importing. The promise and pitfalls of exporting are discussed, along with a discussion of the role of export management companies in the internationalization process. The unit also provides a nice discussion of export financing. In this section, the unit discusses the financial devices that have evolved to facilitate exporting including: the letter of credit, the draft (or bill of exchange), and the bill of lading. The section ends by providing an example of a typical international trade transaction. This example illustrates the complex nature of international trade transactions. Finally, the unit explores countertrade, its growth and the pros and cons of this type of transaction.

Module Learning Outcomes

Upon successful completion of this module, you will be able to:

Explain the three basic decisions that firms contemplating foreign expansion must make: which markets to enter, when to enter those markets, and on what scale.
Compare and contrast the different modes that firms use to enter foreign markets.
Identify the factors that influence a firm’s choice of entry mode.
Recognize the pros and cons of acquisitions versus greenfield ventures as an entry strategy.
Explain the promises and risks associated with exporting.
Identify the steps managers can take to improve their firm’s export performance.
Recognize the basic steps involved in export financing.
Identify information sources and government programs that exist to help exporters.
Describe how countertrade can be used to facilitate exports.

(CLO = Course Learning Outcome)

To Do

Please read/watch all of the module learning materials (readings, presentations, videos, etc.) and complete all assignments/assessments listed below. If you have questions, please contact the course instructor or ask in the Questions About This Course forum.

Readings and Presentations:

Read:
- Chapter 13 Entering Developed and Emerging Markets
- Chapter 14 Exporting, Importing, and Countertrade

Videos:

Watch: YouTube: Exports and Imports in GDP

Assignments/Assessments:

Review: Q&A Discussion #3 answers

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