$1$

Global Entry Strategies

$00\mathrm{.}3221$

move to increasingly risky strategles$-$which usually offer greater profit potential$-$as they gain confidence in their abilities. This activity is important because the specific strategy chosen will vary according to the level of risk the firm is willing to assume.

The goal of this activity is for you to understand the types of actions that correlate with different types of global entry strategy.

First, read the action steps that Bean, a U$.$S$.$ national coffee chain, took to enter its first international market in South America. Then match each entry strategy to the action it matches best.

A U$.$S$.$ national coffee chain called Bean is reviewing the various strategies it could use to enter its first international market in South America. The company is aware that different foreign market entry strategies offer different levels of control and profit potential, but its executives are primarily concerned with the risks involved in each strategy.

Bean is analyzing the risk of each of the following options for expanding into a foreign market:

It could partner with Ol$,$ a local bakery chain, to create a new company together $($requiring Bean to manage a partner relationship$).$

It could ship the product to be sold by a wide array of coffee shops $($involving high shipping costs$).$

It could sell the name and format of the company to individual businesspeople to operate on their own $($giving Bean limited control over stores and lowering its potential profits$).$

It could open, manage, and operate its own stores.

It could collaborate with a group of food chains to boost branding $($though Bean might harm its reputation through negative brand associations$).$

$1$

Joint Venture

$2$

Franchising

$3$

Strategic Alliance

$4$

Direct Investment

Match each of the options above to the items below.

Ship coffee to coffee shops

Sell name$/$format to businesspeople

Collaborate with group

Partner with Ol$$

Open own stores