Entry Modes Analyze different global business entry modes that UBER Service migh
ID: 470126 • Letter: E
Question
Entry Modes
Analyze different global business entry modes that UBER Service might select when planning international business activities in China. Compare the benefits, costs, and risks associated with using exporting, turnkey projects, management contracting, licensing, franchising, contract manufacturing, joint venture, and wholly-owned subsidiaries. (In general, exporting has less risk than some of the other entry modes. The product or service, as well as the economic, social-cultural, and political-legal environment of the country, will influence an organization’s entry mode.)
Explanation / Answer
In case of Uber service, joint venture can be used as a viable entry mode in the the Chinese market. The Chinese market has grown tremendously over the years and lot of investors, MNCs, etc. are attracted towards them on account of favourable demographic conditions, increase in the spending power of the population, change in consumer patterns, etc.
Though China is a very attractive market, there are restrictions for entry into the market. One of the best ways to enter the market is through Joint Venture with a very established orgnisation in the country. This will help Uber for a smooth transition into the market as the existing organisation will able to attract customers, know the rules & regulations of the country, will be able to use it's contacts for marketing strategies, etc.
The risk associated with this type of a format is the organisation might take over the business after a point of time. But it can be mitigated by mentioning it in the joint venture agreement.
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