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International Marketing - Foreign Mncs Entry to Indian Markets

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Pick an MNC that currently does not do business in India.
Then, consider what steps this company should explore to
determine the viability of entering the Indian market and
establishing a major sales presence there. To that end:
Write an eight to ten (8-10) page assignment in which you:
1. Provide a brief summary of the business you chose (2-3 paragraphs).
2. Track the currency exchange rate for the past 24 months, explain what has occurred,
and identify the economic variables that have most in$uenced these exchange rate
movements.
3. Analyze the exchange rate risks associated with transaction, economic, and
translation exposure in the Indian market. Then, based on the tracking and your analysis,
anticipate what $uctuations seem likely to occur in the next 24 months.
4. Consider how the MNC could minimize any negative impacts of such movements. To
this end, formulate at least two (2) currency-derivative strategies that the MNC can use for
foreign exchange risk management. Explain how they would minimize the impact on
international business operations.

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5. Apply a hedging technique to manage the risks of transaction, economic and
translation exposures that may occur in the Indian market.
6. Conduct a country risk analysis to determine if senior management at MNC should
support the proposal for the company to enter the market in India with a major presence.
7. Use four (4) references of academic caliber for this assignment. Note: Wikipedia and
other Websites do not qualify as academic resources.
Introduction to International Market Entry Strategies:
Globalization has increased the competition amongst firms. There are more and more
companies which are motivated to conquer foreign markets and enlarge their presence
on these markets. For multiple reasons, companies adopt modes to enter foreign
markets and find new channels of distribution. Choosing the right and appropriate
market entry strategy has a growing importance. As a matter of fact, companies should
align their strategy to their objectives and adapt them to the foreign markets
environment. There are numerous different entry strategies which are all linked to
different entry modes, different amounts of risks or costs. From the least costly mode to
the most expensive one we distinguish Three main strategies:
Export
It is characterized by the transportation of finished goods from one country to another.
The distribution on site is done by an intermediary or by foreign based distributors or
agents. Exporting is the most traditional and well established form of operating in
foreign markets. Exporting can be defined as the marketing of goods produced in one
country into another. Whilst no direct manufacturing is required in an overseas country,
significant investments in marketing are
required. The tendency may be not to obtain as much detailed marketing information as
compared to manufacturing in marketing country; however, this does not negate the

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need for a detailed marketing strategy.
The advantages of exporting are:
* manufacturing is home based thus, it is less risky than overseas based
* gives an opportunity to "learn" overseas markets before investing in bricks and
mortar
* reduces the potential risks of operating overseas.
The disadvantage is mainly that one can be at the "mercy" of overseas agents and so
the lack of control has to be weighed against the advantages.
A distinction has to be drawn between passive and aggressive exporting. A passive
exporter awaits orders or comes across them by chance; an aggressive exporter
develops marketing strategies which provide a broad and clear picture of what the firm
intends to do in the foreign market. Pavord and Bogart1 (1975) found significant
differences with regard to the severity of exporting problems in motivating pressures
between seekers and non-seekers of export opportunities. They distinguished between
firms whose marketing efforts were characterized by no activity, minor activity and
aggressive activity.
Those firms who are aggressive have clearly defined plans and strategy, including
product, price, promotion, and distribution and research elements. Passiveness versus
aggressiveness depends on the motivation to export.
If the firm achieves initial success at exporting quickly all to the good, but the risks of
failure in the early stages are high. The "learning effect" in exporting is usually very
quick.
The key is to learn how to minimize risks associated with the initial stages of market
entry and commitment - this process of incremental involvement is called "creeping
commitment"
Joint Venturing
It includes different characteristics of various joint contracts with firms to produce or
promote services or products. Joint ventures can be defined as "an enterprise in which

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