From the course: International Marketing Foundations

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Pros and cons of direct investment as a growth strategy

Pros and cons of direct investment as a growth strategy

From the course: International Marketing Foundations

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Pros and cons of direct investment as a growth strategy

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- One strategic option to pursue for international expansion is the direct investment model. This requires total commitment. The benefit of pursuing the direct investment path is that you get to make all the choices within your control. You select everything from the location of your business, who you hire, how they are trained and managed. You also manage all the aspects of the marketing mix. You don't have the same level of control if you go with the export licensing or joint venture models. When you make the direct investment to open a new geography, you also keep all the profits from your venture rather than splitting them with intermediaries or partners. Of course you get this particular benefit because you're the one taking the financial organizational and reputational risk to open the new market. Opening a new market and going direct are much like starting a brand new business. There are several factors you must consider.…

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