Contract Manufacturing - Entry StrategiesCorporate Management

Prepared By

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Manu Melwin JoyAssistant Professor

Ilahia School of Management Studies

Kerala, India.Phone – 9744551114

Mail – manu_melwinjoy@yahoo.com

Entry Strategies

• Market entry strategy is influenced by the firm and product characteristics and the domestic and international market characteristics.

Foreign Market Entry and Operations Strategies

Exporting

• Direct Exporting.

• Indirect Exporting.

Contractual Agreement

• Licensing & Franchising.

• Strategic Alliance.

• Contract Manufacturing.

Production facility in foreign

market.• Assembly Operations.• Wholly owned

manufacturing facility.• Joint Ventures.

Mergers and Acquisitions

Contract ManufacturingIn contract manufacturing, the firm’s product is produced in the foreign market by local producer under contract with the firm. Because the contract covers only manufacturing, marketing is handled by a sales subsidiary of the firm which keeps the market control.

Contract ManufacturingContract manufacturing obviates the need for plant investment, transportation costs and custom tariffs and the firm gets the advantage of advertising its product as locally made. Contract manufacturing also enables the firm to avoid labour and other problems that may arise from its lack of familiarity with the local economy and culture.

ExampleBalsara’s private label manufacturing activity is focused on the supply of children’s toothpaste formulations. Balsara’s empahsis on Private lable products and contract manufacturing has resulted in increased business from North American and European Markets.