The Opportunities And Problems Of Entering New Foreign Markets:
Overview
When a business has grown as far as it can at home, the rest of the world beckons: millions of new customers, but also new languages, laws and customs the firm does not understand. Going global can transform a business or sink it.
In this lesson you will learn the growth potential of new markets in other countries, the problems of entering them, such as cultural differences and lack of local knowledge, and the methods firms use to overcome these problems, including joint ventures and licensing.
Objectives
- Growth potential of new markets in other countries
- Problems of entering foreign markets, e.g. cultural differences and lack of knowledge
- Benefits and limitations of methods to overcome such problems, e.g. joint ventures, licensing
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Lesson Evaluation
Congratulations on completing the lesson on The Opportunities And Problems Of Entering New Foreign Markets:. Now that youve explored the key concepts and ideas, its time to put your knowledge to the test. This section offers a variety of practice questions designed to reinforce your understanding and help you gauge your grasp of the material.
You will encounter a mix of question types, including multiple-choice questions, short answer questions, and essay questions. Each question is thoughtfully crafted to assess different aspects of your knowledge and critical thinking skills.
Use this evaluation section as an opportunity to reinforce your understanding of the topic and to identify any areas where you may need additional study. Don't be discouraged by any challenges you encounter; instead, view them as opportunities for growth and improvement.
- A key benefit of entering a foreign market is: A. fewer customers B. access to many more customers C. higher fixed costs only D. a smaller market Answer: B
- A major problem of entering a foreign market is: A. economies of scale B. cultural differences and lack of knowledge C. more home customers D. lower transport costs Answer: B
- Licensing means: A. two firms sharing a project equally B. letting another firm make or sell your product for a fee C. buying a rival D. paying a union Answer: B
- A joint venture helps a firm enter a foreign market by: A. removing all risk B. providing local knowledge and sharing cost and risk C. raising tariffs D. avoiding customers Answer: B
- To avoid cultural mistakes abroad, a firm should: A. use identical home adverts B. research and adapt to local tastes C. ignore local customs D. raise prices Answer: B
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