Foreign operations Assignment Example | Topics and Well Written Essays - 250 words

Foreign operations - Assignment Example This would enable the firm to retain control over its foreign operations and proprietary rights over its technology. In this case, wholly owned subsidiaries may be the ideal mode of entry because it reduces the risks of losing control over the foreign operations. Alternatively, a firm may prefer licensing as a mode of entry in case the technological competence is only transitory. On the other hand, firms enjoying competitive advantage based on managerial knowhow may rely on international trademark regulations to protect trademarked products and services (Nande & Shaila, 2007). Further, these firms experience a lower risk of losing control of management skills, thus making franchising and joint ventures attractive modes of entry. The strategies adopted by a company also determine its mode of entry in foreign markets. For instance, Tesco has assumed a rather unique strategic approach in its global expansion within the grocery industry. Tesco’s strategy entails ignoring highly competitive markets and pursuing markets with high growth potential and low levels of competition (Tesco, 2014). As such, Tesco is able to use its competence in management knowhow to expand within the international markets, without incurring the unnecessary costs of competing in mature and highly competitive markets. Tesco’s global expansion strategy entails identifying underserved markets with strong growth potential, identifying local companies with effective understanding of their markets and with strong distribution systems, entering into joint venture agreements with them, transferring management expertise to these ventures and later acquiring these ventures (Tesco, 2014). The joint venture strategy has proven to be a very effective entry strategy for Tesco within the international market. The company has been able to improve its financial performance and competitive advantage by leveraging its expertise and tapping into the knowledge of the local