Foreign Operations Methods
From Supply Chain Management Encyclopedia
Introduction
An integrity of global supply chains across borders is accomplished with help of international operations understood also as modes of entry. An existing areas of international business evolve, or new areas emerge, the process tends to spill over into questions that pertain to the use of foreign operations modes[1] The class of managerial decisions concerning choosing and implementing international operations is often classified as strategy decisions or the global market entry strategies [2] [3]. However, supposing any strategic decision has to answer questions "What?", "Where?", and, sometimes, "When?" to sell, we propose to classify the entry mode decisions answering the questions "How?" as operative decisions whereas all decisions concerning marketing mix adjustments are named as tactic decisions.
An entry mode is understood in terms of international marketing as an approach to international expansion a company chooses based on desired control and on the risk it can afford. Nevertheless, in terms of international logistics, the entry mode should be defined as a means to connect and match arms of a global supply chain belonging to different national marketing environments [4]. The main task of international logistics efforts is to overcome disruptions on the way of international supply chain generated by dissimilarities between different national marketing environments (Fig. 1.).
Any product movement across borders is to be arranged as a sale-purchase transaction. This absolute rule is in power due to the fact of export/import customs formalities and government regulations presented as tariff and non-tariff barriers in international trading. Therefore, the first step of international logistics managers in any international (foreign) operations is to reveal and interpret the differences between national marketing environments of (as minimum) two countries ("home country" and "host country" on Fig. 1.). The second step consists of executing export/import customs clearance, home and host country export/import government regulations and contractual requirements.
Table 1. Marine Insurance Coverage Summary
| Entry Mode Factors | Commentary |
| The size of the market | While there is no easy rule, the method of entry is different for a market in which combined sales amount to €10,000,000 (U.S. $14,159,000 – MAY22, 2011 exchange rate) per year and a market that exhibits sales in billions of euros. |
References
- ↑ Welch, L.S., Benito, G.R.G., Petersen, B.: Foreign Operation Methods: Analysis, Strategy, and Dynamics: Edward Elgar, London, 2007 - p.8
- ↑ Gillespie, K, Jeannet, J-P., Hennessey, H.D. Global Marketing - Houghton Mifflin Company, Boston, New York, 2007 - Ch.9.
- ↑ Keegan, W.J., Green, M.C. Global Marketing - Pearson Education, Boston, etc., 2013 - Ch.9.
- ↑ Cherenkov, V.I. Global Marketing Environment: Essays on Conceptualization and Generalization -
