The choice of entry mode can be based on the expected contribution to profit. Choosing the right market entry mode(s) is one of the most decisive factors that can influence company’s success in a foreign market. Export modes
1In establishing export channels Carlsberg has to decide which functions will be the responsibility of external agents and which will be handled by the firm itself. While export channels may take many different forms, for the purpose of simplicity three major types may be identified: Indirect export: In this channel Carlsberg does not take direct care of exporting activities but instead they need to work in collaboration with a domestic based company, such as an export house or a trading company. The domestic company is going to perform the involvement of Carlsberg product in the Brazilian market but such an approach to exportation is most likely to be appropriate for firms with limited international expansion objectives and also can be adopted by a firm with minimal resources to devote to international expansion which want to enter international markets gradually, testing out markets before committing major resources and effort to developing an export organization. Direct export: In this channel Carlsberg or an exporter sells directly to an importer or buyer located in the Brazilian market area. In this case Carlsberg is typically involved in handing documentation, physical delivery and pricing policies, with the product being sold to the agent and distributor. Intermediate entry modes
Intermediate entry modes include a variety of arrangement, such as licensing, franchising, management contracts, turnkey contracts, joint venture and technical know-how or coproduction arrangement. 2Contract manufacturing: it operates in a way that will enable Carlsberg to have a foreign sourcing (production) without making a final commitment. Management may lack resources or be unwilling to invest equity to establish and complete...
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