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United Arab Emirates

In: Business and Management

Submitted By Geotis
Words 1940
Pages 8
United Arab Emirates (UAE)
Modes of Entry
1. Exporting -Indirect exporting means that the company does not deal with foreign customers or companies by itself but uses intermediates such as export companies, export agents, or export partner network to take care of all export activity. Indirect exporting should be taken into consideration if a company’s own prerequisites in international business are not enough and if the intermediate’s resources as well as the know-how benefit the company. This entry alternative has quite low risks for the exporter. However, indirect exporting is expensive since each intermediate takes their compensation and it adds up to the final price of the product. Other hindrances are the missed opportunities to develop relationships and a company might only have minor contacts to foreign markets and customers. (Vahvaselkä 2009, 73-74.) In direct exporting the company takes care of the exporting activity by itself. The company is in contact with the intermediates in the target market such as import agents, retailers, or brokers. It is essential for the company to know the markets, pick the agent or distributor carefully and posses the knowledge in marketing as well as exporting routines. Direct exporting requires professional personnel and a company’s own export organization as well as more risk taking and better exporting knowledge than indirect exporting. Benefits in direct exporting are shorter distribution channels, smaller distribution expenses as well as closer connection to the end user and greater potential return. (Vahvaselkä 2009,74; Kotler & Amstrong 2008, 553.) Czinkota et all (1998, 374) state that these companies are more likely to learn their competitive ad-vantage quicker and therefore expand more rapidly. They will also have better control in their international business activities and building relationships with their...

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