Market Entry Mode in Thailand Essay
There are many types of entry modes Into a market, such as joint venture, franchise. And wholly owned subsidiary. For our business to go into Thailand, we considered these few options and highlighted that Joint venture is a preferred entry mode. One Important point is the language barrier in Thailand. Though most of the Thai understand English but the mother tongue of Thailand Is Thai language. In order to reach out to the entire population, communication is vital as to reach out the non English speaking consumer or working partners.
Be it in advertisement, menu, labor and local documentation. We need the help of a local partner to understand their culture better and language In order to penetrate into the market. Joint venture benefits both company as sharing of information and exchange of knowledge as both teams work together. The local partner have a deep understanding of the local market and strategy while we, the foreign partner can give idea, technology, recipe and a different perceptive. It Is also an alliance between two parties to form a partnership whereby we shared Intellectual property, assets, knowledge and profits.
This occurs provided both partied have a mutual trust, belief, understanding and expanding the business.
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We would like to have the control of the company shares. Our partner will have a smaller percentage of shares. However to attract them to join us, we will give them a larger percentage of profits (egg. 55%-45%) What we looking for are an expansion in the future and moving forward when the store is stable and we have an idea and skills, we can open a second outlet. There are risks Involved In Joint venture. This occurs when two partners have difference In point of view, culture and background. They may have different mindset and different way of doing things. Without trust, conflicts will happen and lead to inefficiency of company operations.