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Advantages And Disadvantages Of Entry

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3. Discussion
ABC Limited should choose a suitable market entry strategy before they enter India. There are five models of entry, including exporting, licensing, franchising, specialized modes and foreign Direct Investment (Griffin and Pustay, 2013). Appendix table 1 shows advantages and disadvantages of different modes of entry. Foreign Direct Investment is one of the modes of entry and it is suitable entry model for ABC Limited. Because according to compare with them, Foreign Direct Investment maintains more control and high profit potential in Business than others (details in table 1). Foreign Direct Investment refers to an investment made by business enterprise in one country into a company in another country (Oxford Reference, 2009). It …show more content…

Product innovation means a new or improved product is created, and it is a source to make economic growth (Oxford Reference, 2013). For example, Suzuki Motor Corporation and Maruti Udyog Limited built a joint venture called Maruti-Suzuki in India. Although Maruti-Suzuki introduced Japanese technology to modernize the India automotive industry, the products was only affordable to a few rich and power people in India. The motor industry eventually was inefficient, low profitable and outmoded technology that they created a low-volume and high-cost motor car (Sangeeta, 2011). Therefore, product innovation of joint venture to meet the affordability and acceptability criteria of common people is also a challenge in emerging economies. In other words, how to design and create product innovation to meet local demand in mass markets is faced by joint venture in emerging …show more content…

Because emerging markets are redefining pathway of innovation and representing the next big growth opportunity for international business. Besides, in emerging economies, how to design and create product innovation to meet affordability or acceptability criteria of mass markets is also important for emerging markets. Moreover, lowering cost, risks and uncertainties can be realized by innovation of synergetic partnerships (Sangeeta, 2011). For example, Mercedes Benz built a joint venture with Tata Motors to manufacture commercial trucks in India. After making each distinctive competence synergy, they created the lower and cheaper car to meet emerging economies. Besides, the group also became the first and biggest seller in low cost car business in India (Sangeeta, 2011). Therefore, company should find each partners’ distinctive competence and sense of innovation. It can make competence synergy to achieve profits

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