FRANKLIN R. ROOT is professor emeritus of international management at the University of Pennsylvania's Wharton School of Business and past president of the Academy of International Business and of the International Trade and Finance Association. He also does extensive consulting work for businesses and government agencies throughout the United States and around the world.

Figures xi

Tables xiii

Preface xv

1. Designing Entry Strategies for International Markets 1

The Elements of Entry Strategy 2

Classification of Entry Modes 5

Factors Influencing the Choice of the Entry Mode 8

Dynamics of Entry Mode Decisions 15

The International Marketing Plan 18

A Logical Flow Model of the Entry Decision Process 21

Summary 21

2. Deciding on the International Product Candidate and Target Market 25

Choosing the Candidate Product 25

Adapting Products for International Markets 29

Preliminary Screening of Country Markets 33

Estimating Industry Market Potentials 38

Estimating Company Sales Potentials 41

Summary 46

Annotated Bibliography of International Statistical Information 50

3. Entering International Markets through Exports 53

Exporting as a Learning Experience 53

Direct Exporting 55

Determining the Direct Export Channel 59

Choosing a Foreign Agent/Distributor 63

Export Operations 70

Getting Started in Export 76

Summary 80

4. Entering International Markets through Licensing and Other Contractual Arrangements 85

Licensing as a Primary Entry Mode 86

Protecting Industrial Property Rights Abroad 88

Profitability Analysis of a Proposed Licensing Venture 94

Negotiating the Licensing Agreement 98

Legal and Government Constraints on Licensing 108

International Franchising 109

Other Contractual Entry Modes 112

Summary 118

5. Entering International Markets through Investment 123

General Appraisal of the Investment Entry Mode 123

The Decision to Invest in a Target Country 126

Analyzing the Foreign Investment Climate: Assessing Political Risk 128

Analyzing the Foreign Investment Project: Assessing Political Risk 128

Analyzing the Foreign Investment Project: Assessing Profitability 136

Investment Entry through Acquisition 142

Investment Entry through Equity Joint Venture 146

Entry Negotiations with Host Governments 153

Summary 154

6. Deciding on the Right Entry Mode 159

The Naïve Rule 159

The Pragmatic Rule 160

The Strategy Rule 160

Comparing Entry Modes: An Approach 162

Summary 198

7. Designing the International Marketing Plan 171

The International Marketing Plan 171

Segmenting the Target Country Market 175

Pricing for International Market Entry 179

Deciding on an International Promotion Strategy 187

A Note to the Reader 198

Summary 198

8. Designing Entry Strategies in a Global Enterprise System 203

The Global Enterprise System 203

Organizing the Global Enterprise 207

Planning Entry Strategies in a Global Enterprise System 216

Grouping Country Markets for Common Marketing Strategies 223

Controlling Entry Strategies 227

Summary 232

9. Designing and Managing Entry Strategies Across Cultural Differences 237

What Is Culture? 238

Communicating Across Cultures 241

Negotiating Across Cultures 252

Developing Cultural Understanding 255

Summary 259

Index 265

About the Author 271