Reading Matching
Read the passage and match the details (1-8) with the strategies (A-E). Some letters are used more than once.
When you want to internationalize your business, you need to choose a precise strategy.You have to be clear about the specific business of your company and know the characteristics in the market segment in which you want to operate. To go on this journey.you can consider the following five main strategies.
A. CHOOSE THE EXPORT. The most common strategy to internationalize a company is
undoubtedly the export of goods. The company can be directly involved in the process [direct exports] or have a commercial intermediary that negotiates and distributes its product abroad [indirect exports]. Indirect exports are the least demanding but also the most precarious of all internationalization strategies. They do not relate directly to the outlet market or the final consumer as opposed to direct exports, which involve a higher level of involvement, especially in financial terms.B. OPT FOR FOREIGN DIRECT INVESTMENTS [FDI]. Another strategy to reach the
foreign market is the direct investment in the partial or total acquisition of a company that already operates abroad [brownfield investment]. Despite the high costs, this alternative can be enjoyable to reduce the risks of entering a new country: investing in a company that already operates abroad minimizes the risk of implementation. Another type of direct investment is the opening of a consortium or subsidiary abroad [greenfield investment].The creation of a new company to carry out commercial activities abroad indeed represents a more significant investment than the acquisition of an existing unit, since it is the opening of a new branch.
C. ADOPT A LICENSING STRATEGY. Licensing is an international agreement in which two or more parties agree that the licensee, subject to payment of royalties, can use the licensor's proprietary resource for a specified period. In this strategy, internationalization takes place with the help of an entrepreneur outside the country, taking advantage of its image to establish a partner in the new market. The main disadvantage is that a foreign company is not part of the parent company. Therefore, there is a risk that the licensee will become a competitor if the license agreement expires.
D. SET UP A FRANCHISING. In franchising, the company chooses to be an affiliate [franchisee], having to pay a fee to the franchisor. The franchisee is authorized to sell products and services, use the franchise format, and the business system. Companies that choose to franchise as an internationalization strategy must follow the franchisor's quality.price, and advertising standards. Those who use this strategy believe they can succeed in the international market using someone else's brand and operating according to their
ion 1/1
A. Strategy A
B. Strategy B
C. Strategy C
D. Strategy D
E. Strategy E
Number(1,2,3...)
Letter (A, B, ACD....)
