The Jonas brothers would like to enter the Iceland market because there indoor a
ID: 423272 • Letter: T
Question
The Jonas brothers would like to enter the Iceland market because there indoor activities are popular in the winter months.
Research Iceland and its business environment.
Review and rank the following modes of market entry for suitability using the table below. Rank using 1 for the least suitable and 4 the most suitable. In addition to the table, provide an explanation as to how you arrived at the ranking. Be sure to explain the advantages and disadvantages of each mode of entry and why it would or would not work best for Jolly Jumps in Iceland.
To assist you in your research, view:
Doing Business Rankings
Establishing a Business in Iceland
Entry Mode
1
2
3
4
Turnkey
Licensing
Franchising
Joint Venture
Entry Mode
1
2
3
4
Turnkey
Licensing
Franchising
Joint Venture
Explanation / Answer
Since Jonas brothers would like to enter the Iceland market because there indoor activities are popular in the winter months for them based on resource commitment and risk control the most suitable mode of market entry is accordingly ranked Turnkey, Licensing, Franchising and Joint Venture.
Business environment in Iceland is fast moving, focused and responsive to company requirements. It is not constrained by multifaceted regulations nor hampered with stringent government taxation policies. Iceland provides efficient infrastructure, expert services and effective administration thus facilitates with highest global business standards.
Turnkey can be made possible for organization which intends to plan an establishment of a plant and facilitates to earn sufficient revenues in an overseas business environment where in fact there are limited foreign direct investment opportunities and shortage of knowledge and proficiencies in crucial and significant areas of business processes.
However probable disadvantage of turnkey involves risk of revealing company secrets to rivals and plant takeover possibility by host country. Furthermore entering an overseas market with turnkey as a mode of entry can demonstrate that company has no long-term interest in the overseas nation which in fact can become a disadvantage if the country proves to be the main market for the output of the exported process.
License agreement can facilitate an organization with right to use the latest technical advances which otherwise could have been difficult for it to attain. Furthermore when paired together with enterprises technology portfolio it can facilitate with more growth opportunities by helping the organization to produce new products, services and market opportunities.
However licensing can create technology dependence on the supplier who indeed can decide not to renew the license agreement, negotiate the license agreement with competitors, limit the markets where licensed technology is used or confine the utilization under the licensing agreement.
Franchising facilitates to reduce the risk of business failure as the business is predominantly based on proven ideas where goods and services already would have an established market share. Furthermore franchise facilitates small business to effectively compete with big businesses due to a bond of support from franchisor and network of other franchisees.
However franchising are no guarantee of success as it may fail to provide good administration such as informed decision-making, hard work, effective time management, adequate resource funding and customer servicing. Furthermore inflexible nature of a franchise can restrict the implementation of effective changes needed in business which indeed could have facilitated to respond efficiently to changing market trends.
Joint venture facilitates with an opportunity to gain new insights and expertise. Thus forming a joint venture will indeed offer you access to better resources such as specialized staff and technology. Nowadays global joint ventures are very common which indeed facilitates with great opportunities to collaborate with people from different nations and collectively work towards business goals.
However to great extent flexibility is restricted in a joint venture which indeed results in business sufferings. Furthermore conflicts in culture and administration styles may result in poor co-ordination and integration. Individual diverse beliefs, tastes and preferences can indeed be hindrance towards business success.
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