International markets
| English | Chinese | Pinyin |
|---|---|---|
| international markets | 国际市场 | guó jì shì chǎng |
| exporting | 出口 | chū kǒu |
| licensing | 许可经营 | xǔ kě jīng yíng |
| franchising | 特许经营 | tè xǔ jīng yíng |
| joint ventures | 合资企业 | hé zī qǐ yè |
| direct investment | 直接投资 | zhí jiē tóu zī |
| economies of scale | 规模经济 | guī mó jīng jì |
| trade barriers | 贸易壁垒 | mào yì bì lěi |
| multinational companies | 跨国公司 | kuà guó gōng sī |
Selling to the world
- Once a firm outgrows its home market, the whole world beckons — billions of new customers.
- But international markets 国际市场 bring big opportunities and big risks.
International market lab
See how access to world markets changes quantity and price pressure.
Selling home-produced goods to customers abroad is:
Exporting sells domestic output overseas.
Letting a local firm sell under your brand for a fee is known as ______.
Franchising/licensing is a lower-risk entry method.
Ways to enter foreign markets
- Exporting 出口: selling home-made goods abroad.
- Licensing 许可经营 / franchising 特许经营: letting a local firm produce or sell under your brand.
- Joint ventures 合资企业 and direct investment 直接投资: setting up or partnering overseas.
Market entry modes range from low-commitment exporting to setting up an own branch abroad
Digital advertising screens: marketing increasingly happens online and on screens
Which are opportunities of entering international markets? (Select all that apply.)
Bigger markets, scale and risk-spreading are real gains; profit is never guaranteed.
Opportunities
- Access to larger markets and economies of scale 规模经济.
- Spreading risk across countries, and using cheaper resources or labour.
Which is a risk of trading internationally?
Currency swings, culture and trade barriers are key risks.
A multinational company (MNC) operates in more than one country.
MNCs span many countries and are economically powerful.
Risks and the role of MNCs
- Cultural differences, exchange-rate swings, trade barriers 贸易壁垒 and legal differences.
- Multinational companies 跨国公司 (MNCs) operate in many countries — powerful, but face criticism over jobs, tax and ethics.
Worked example. A coffee chain enters a new country by franchising to local partners who know the market and culture — lower risk and cost than building its own stores from scratch.
You've got it
- entry methods: exporting, licensing/franchising, joint ventures, direct investment
- opportunities: larger markets, economies of scale, spreading risk
- risks: culture, exchange rates, trade barriers; MNCs are powerful but controversial