...+256718275925 caloolgeele@hotmail.com Introduction The analysis of barriers to entry and exit is fundamental to the assessment of market power and market efficiency. A firm or firms may exercise market power for a significant period of time only if barriers to new entry exist. Thus in determining whether or not a proposed merger is against the public interest, or whether a firm (or firms) is abusing monopoly or market power in antitrust cases, analysis of entry conditions is of primary importance. One might therefore expect to see rather extensive and sophisticated analyses of entry conditions, or barriers to entry, in monopoly and merger cases that come before competition authorities in the United States, United Kingdom, or member states of the European Union (EU). One might also expect that competition authorities would have placed a great deal of emphasis and effort on achieving a coherent and consistent framework for the analysis of entry barriers in a manner that makes use of the latest thinking on the subject by industrial organization economists. However, until very recently no competition authority that we are aware of has attempted to formulate a coherent and detailed framework for the analysis of barriers to entry, despite the significant degree of effort that has been put into clarifying the related problems of market definition and the measurement of monopoly or market power. While clear and fairly precise statements and indeed, guidelines or procedures on...
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...Eastern Michigan University DigitalCommons@EMU Senior Honors Theses Honors College 2009 U.S. Business and Global Barriers to Entry Caitlin Long Follow this and additional works at: http://commons.emich.edu/honors Recommended Citation Long, Caitlin, "U.S. Business and Global Barriers to Entry" (2009). Senior Honors Theses. Paper 167. This Open Access Senior Honors Thesis is brought to you for free and open access by the Honors College at DigitalCommons@EMU. It has been accepted for inclusion in Senior Honors Theses by an authorized administrator of DigitalCommons@EMU. For more information, please contact libir@emich.edu. U.S. Business and Global Barriers to Entry Abstract An exploratory view of barriers to entry in countries of significance to U.S. companies, this thesis provides a comprehensive overview of prevalent business strategies of U.S. trading partners as well as a forecast of their international business policies. Diverse macro-environmental variables, such as economy, culture, and regulations result in varying barriers to entry for U.S. based firms to conduct business in U.S trading partners’ countries. This thesis will determine how these macro-environmental factors foster or stunt growth and strategies governments employ to attract businesses. Degree Type Open Access Senior Honors Thesis Department Marketing First Advisor Harash Sachdev Keywords International trade, Foreign trade regulation, Investments, Foreign China, Investments...
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...Chapter 9: Global Market Entry Strategies The need for a solid market entry decision is an integral part of a global market entry strategy. Entry decisions will heavily influence the firm’s other marketing-mix decisions. Global marketers have to make a multitude of decisions regarding the entry mode, which may include: * (1) The target product/market * (2) The goals of the target markets * (3) The mode of entry * (4) The time of entry * (5) A marketing-mix plan * (6) A control system to check the performance in the entered markets 1. Target Market Selection A crucial step in developing a global expansion strategy is the selection of potential target markets. A four-step procedure for the initial screening process: 1. Select indicators and collect data 2. Determine importance of country indicators 3. Rate the countries in the pool on each indicator 4. Compute overall score for each country 2. Choosing the Mode of Entry Decision Criteria for Mode of Entry: * Market Size and Growth * Risk * Government Regulations * Competitive Environment/Cultural Distance * Local Infrastructure Classification of Markets: * Platform Countries (Singapore & Hong Kong) * Emerging Countries (Vietnam & the Philippines) * Growth Countries (China & India) * Maturing and established countries (examples: South Korea, Taiwan & Japan) Key criteria for choosing entry modes: * Company Objectives ...
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...term growth potential Capability mapping for future growth How? Roadmap to Establish Takeda’s Global Vaccines Business – – – Opportunities and barriers to entry Strategic roadmap to enter global vaccines market and address capability gaps Proposed action plan Why Vaccine? Vaccine Has Become an Attractive Market • • • Vaccine is the most cost-effective tool for disease prevention and reduction of healthcare costs Investment in partnerships and other deals to develop and manufacture vaccines has been on a tear: dollars in government and non-government grants are bringing – Billionways to develop and manufacture new and improved vaccines better, faster worldwide emphasis on – Rising are purchasing a broader preventive health care: Government and private sector set of modern vaccines – Acceleration of vaccine development since the birth flu, SARS, swine flu – The advent of the first multibillion-dollar vaccines, have further boosted their appeal Vaccines now are viewed as a crucial path to growth, as drug makers look for ways to bolster slowing prescription medicine sales amid intensifying generic competition and government pressure to cut down prices under the federal health overhaul – Vaccines are not subject to patent expiration – Consistently growing, yearly demand of vaccines Why Vaccine? The Vaccines Market Is Expected to Continue Its Impressive Growth through the Next Decade $97.4B 100 90 80 Sales ($bn) 70 60 50 40 30 20 10 0 2008 2010 2012 2014 2016 Year...
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...|SMART| Marketing Theory | Marketing Mix | Ansoff Matrix | INTERNATIONAL MARKETING MARKET ENTRY METHODS There are a number ways businesses can sell their products in international markets. The most appropriate method will depend on the business, its products, the outcome of its Marketing Environment analysis and its Marketing Plan. This article talks you through market entry options. Diagram showing international marketing market entry methods Direct Export The organisation produces their product in their home market and then sells them to customers overseas. Indirect Export The organisations sells their product to a third party who then sells it on within the foreign market. Licensing Another less risky market entry method is licensing. Here the Licensor will grant an organisation in the foreign market a license to produce the product, use the brand name etc in return that they will receive a royalty payment. Franchising Franchising is another form of licensing. Here the organisation puts together a package of the ‘successful’ ingredients that made them a success in their home market and then franchise this package to overseas investors. The Franchise holder may help out by providing training and marketing the services or product. McDonalds is a popular example of a Franchising option for expanding in international markets. Contracting Another of form on market entry in an overseas market which involves the exchange of ideas is contracting. The manufacturer of the product...
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...This section discusses the market entry strategy that is used to enter the South African market would be direct exporting through a distributor in South Africa. Through a distributor/intermediary but would these intermediary is customer based in the South African market. Participating in Trade shows and exhibits in association with African Farmers Workshop and Expo other similar associations to meet potential customers. Direct exporting would not require a large investment and understand and test reaction of customers. Using a distributor would be a good start for Agrium Inc. to enter South African market and understand how the product is accepted and expand into other parts of Africa. As the demand for imported fertilizers is increasing due to the limited and high prices of locally produced fertilizers and also the lack of fertile soil appropriate for agriculture this as posses the right time to enter and capture the market and a distributor would be a faster and easier way to enter the market. The trade shows and exhibitions would provide a good platform to interact and build a relationship with potential distributors. Even getting touch with the South African embassy, or the Canadian embassy in South Africa could be helpful to decide on a distributor, also become a member of Fertilizer Association of Southern Africa (FERTASA), which brings farmers and compnies providing any agricultural products together providing a good platform to meet more potential clients. Agrium Inc...
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...With the use of examples explain the various barriers to entry to a market and how these barriers might affect market structure Barriers to entry are designed to block potential entrants from entering a market profitably, they seek to protect monopoly power and usually have the effect of making a market less contestable. In a perfectly competitive market barriers to entry are not allowed as otherwise the market would not be perfectly contestable as one firm will have an advantage over another. One barrier to entry in a market is research and development. Heavy investment into research and development from large firms can deter other firms from entering into a market. Research and development also goes into developing new products such as Dyson creating the bag less vacuum cleaner, this leads to firms acquiring patents, where the firm has legal protection over a design or a product for twenty years. Patents are very good at creating monopolies as they restrict entry into certain markets, as in my previous example with the bag less vacuum cleaner, Hoover tried to copy this idea however were taken to court by Dyson leading to Hoover having to take their product off the market and paying substantial fees to Dyson. This therefore led to a monopoly on the bag less vacuum cleaner; therefore Dyson had complete market power and could increase the prices of their products. Another barrier to entry also related to research and development is the R&D that goes into making the...
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...* Topics to be discussed: * What is International Business Environment? * Changing Pattern of International Management * Major Elements Affecting International Business * International Business Environment * The international business environment can be defined as the environment in different sovereign countries, with factors exogenous to the home environment of the organization, which influences decision-making on resource use and capabilities. * It involves three environments such as domestic, foreign and international. * Domestic environment * composed of all the uncontrollable forces originating in the home country that influence the firm’s life and development. * Foreign environment * composed of all the uncontrollable forces originating outside the home country that influence the firm. * the kinds of forces are the same as those in the domestic environment but their values often differ and changes in the values of foreign forces are at time more difficult so assess. * International Environment * interactions between the domestic environmental forces and the foreign environmental forces AND * interactions between the foreign environmental forces of two countries when an affiliate in one country does business with customers in another. * The Forces: * environment: all the forces surrounding and influencing life and development of the firm; they can be external or internal * uncontrollable (external)...
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...providing the very best, with a desire to embrace changing consumer needs and wants. In the last ten years, there has been a boom in the organic food segment with an explosion in sales. Germany stands prominently at the top of beverage and food market development as it works to embrace the international increased demand for healthier food. The demand exists in Europe and Germany is an established leader. Whole Foods Market has self-proclaimed themselves America’s healthiest grocery store. They attempt to find and provide customers the highest quality natural and organic foods by implementing a strict quality standards process. The very first Whole Foods Market originated in Austin, Texas in 1980 with the belief that the natural foods industry needed a supermarket foundation. Though it was a small location staffed by less than 20 people, the supermarket took off. Since then Whole Foods Market has become a leader retailer in natural and organic foods. It has hundreds of locations all over the world, with the majority in the United States. Its success has been depending on the multibillion dollar growing market for natural and organic foods that has rapidly grown since the company opened in 1980. The natural and organic foods market is incredibly attractive and is only continuously growing in attractiveness. There is no question that Germany has the society and culture to embrace this trend and continue Whole Food Market’s growth. 1.3 Germany: An Introduction While Germany...
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...He is a professor at Missouri State University and granted permission to use it for this course on health marketing. A key observation to notice throughout this reading assignment is that in the history of business (or commercial) marketing there has been no reference to health, prevention, wellness or medicine as products or services to motivate people to buy or to sell or market to people. An important concept to note however, from the article is that marketers evolved to applying theories of behavior, the same as health educator‟s use. Among these are concepts borrowed from established disciplines, such as psychology and sociology and suggesting that marketing is a social science. Please note that the bold text are from the original text from Dr. Hermans. The article begins now. Bartels, Robert (1976) “The History of Marketing Thought,” 2nd edition, Highlights selected by Dr. Hermans are from chapters 1,2,3,4,9,10,11,12,13,and 14. Accessed on Sep 18, 2009. Available at http://www.faculty.missouristate.edu/c/ChuckHermans/Bartels.htm Chapter 1: The Meaning of Marketing The establishment of a market economy wrought marked changes in the social and economic structure. A new attitude toward business revolutionized the economy of the country and that revolutionary element was identified by the term „marketing.‟ Historical accounts of trade lead one to conclude that marketing has always existed. Was the original use of the term marketing merely an application of a new name to...
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...International Marketing Marketing Wine in the Chinese Market Executive Summary China’s demand for Western wine has rapidly increased. This has created a market opportunity for high end, quality wine companies from Australia to export their products to China. The product that will be focused on is Glandore Wine from the Hunter Valley. The report will focus on exporting this product into the Chinese market. There should be a strong focus on building brand reputation and maintaining long-term business relationships. There are multiple entry types into foreign markets yet Chinese regulations limit the mode of entry. The recommended mode of entry for Glandore wines is a Joint Venture. The decision between product standardisation and customisation is an important aspect of strategic decision-making. It is recommended that Glandore does not customise their core product of wine, however it is recommended that other product attributes are customised to appeal to the Chinese market. When promoting Glandore wine in the Chinese market there should be use of advertising, public relations, sales promotion and personal selling. Table of Contents Executive Summary ……………………………..…. 2 1. Introduction ………………………………………………... 4 2. 2.1 Market Entry………………………………………………4 2.2 Recommendations ………………………………………5 3. 3.1 Product Standardisation and Customisation ……..…..7 3.2 Recommendations…………………………………….….7 4. Promotion in China 4.1 Push Strategies………………………………………...
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...MARKET ENTRY STRATEGY The market entry strategy framework encompasses several services that are put together to help our customers to enter a new market. These services can be delivered separately depending on your needs and stage in the internationalisation process. With our proven market entry strategy framework, we assess whether you should enter a market or not, why, and how. The strategic framework comprises 4 phases that focus on specific issues of the market entry: - Market assessment - Business case development - Implementation roadmap - Go live After each phase, based on the deliverables produced, the client will decide whether or not the entry in the new market must be pursued. Each assignment begins with a “start up” aimed at developing a complete understanding of the client organization, products and processes, as well as a finalising and initiating the project. Each element within the strategic framework will deliver strategic reports for the project sponsor and management board. Market Entry Strategy Framework This phase is the formalization of the information collected in phase I. This must be done in close collaboration with the client, since assumptions need to be validated to produce coherent figures in the financial analysis. The following sections of the analysis are used to assess: - The attractiveness of the market - The difficulties to enter in the market and the capabilities the client has to overcome them - The potential partners...
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...A market entry strategy is to plan the a method of delivering goods or services to a target market and distributing them there. when importing or exporting services, it refers to establishing and managing contracts in a foreign country.Market entry is more than examining a set of economic data. Successful market entry begins with assessing feasibility, factors such as the trends, the culture, the nature of the competition and the opportunity. There are a variety of ways in which organizations can enter foreign markets. The three main ways are by direct or indirect export or production in a foreign country. Exporting methods include direct or indirect export. In direct exporting the organization may use an agent, distributor, or overseas subsidiary, or act via a Government agency. In effect, the Grain Marketing Board in Zimbabwe, being commercialized but still having Government control, is a Government agency. The Government, via the Board, are the only permitted maize exporters. Bodies like the Horticultural Crops Development Authority (HCDA) in Kenya may be merely a promotional body, dealing with advertising, information flows and so on, or it may be active in exporting itself, particularly giving approval (like HCDA does) to all export documents. In direct exporting the major problem is that of market information. The exporter's task is to choose a market, find a representative or agent, set up the physical distribution and documentation, promote and price the product. Control...
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...Market entry Strategy Glitter is a local company which is currently dealing with fashion accessories, wedding planning and advertising. The company wants increasing its sales by introducing new and modified products on the market. Executives constantly look at new market entry opportunities as a way to generating rapid growth, diversifying their portfolios, and preempting competition—and, occasionally, secretly satisfying their entrepreneurial spirit. There are various ways in which a company can enter in to market. No one market strategy works for all markets. In the case of Glitter, I suggest following strategies are the main entry options open to them. Organic Growth Organic growth strategy involves strengthening your company using its own energy and resources. This is the process of business expansion due to increasing overall customer base, increased output per customer or representative, new sales, or any combination of the above, as opposed to mergers and acquisitions. This approach to company growth is slower than others, but it has relatively low up-front costs, making it an attractive option for small-business owners as Glitter who want to expand their companies but don’t have large amounts of liquid capital. Developing your company’s strengths through organic growth can make you a stronger competitor in your industry. For instance, a company that continually devotes its profits to improving its quality-control department offers increasing value to its...
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...The concept of ‘internationalization’ is strongly related to a process of involvement and accurate decision making regarding the entry or expansion into new or existing markets taking into consideration dynamic factors and limitations that could influence the entrepreneur. As Buckley J. and Ghauri N. (1999:85, 86) state, the meaning is used to describe how growth of international businesses is mainly dependant on the ‘inward-outward interlink’, thus acquiring foreign commitment over time through a six dimension pattern. The framework suggests that the success of international companies is linked to foreign operation methods and the change tendency as well as sales objects and targeted markets, organizational structure and personnel together with finance and technology. Therefore, in terms of analysing the start-up for a new venture, entrepreneurs should focus on developing and integrating the abovementioned and as Oviatt and McDougall (2004:31) indicate, gain the competitive advantage through resource utilisation and output sale in multiple countries. In order to achieve that, proactive strategies such as alliances, manufacturing capacity or marketing expertise should be taken into consideration as suggested by Buckley and Casson (1976:4) and consistent with a value added approach rather than asset owned. Therefore, the strategy is more concerned with small and medium size firms which start up locally and then mature to become consistent with the MNE theory and foreign direct...
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