Agenda
•	Part I: The Decision
•	Preliminary research of market potential
•	In-depth analysis
(The Nature of the Corporation)
•	Selecting a Mode of Entry
•	Part II: Factors Affecting Risk Analysis

1. Preliminary Research
•	Decision making process - first step is to eliminate obvious disasters
•	Numerous factors to consider
•	Size, disposable income, location, currency stability, etc.
•	Porter’s Five Forces!!
•	Data can usually be easily obtained
•	Must be careful how you use it -  it can be misleading (ex: GDP/Capita)
2. In-Depth Analysis
•	You must assess all costs, benefits, and risks - STEEPEC
•	Failure to do this could be disastrous
•	Types of Costs
–	Direct Costs:
•	All costs associated with setting up and running the business
–	Opportunity Costs
•	The profits forfeited from other opportunities

2. In-Depth Analysis
•	Benefits include
•	Lower manufacturing costs
•	Cheaper, or better resources
•	Access to new technology
•	Proximity to final markets
•	You must weigh the benefits against the costs
•	Must look “deep” into the numbers and data (ex: GDP/Capita)
•	Where can you obtain information for this stage of the process?
2. In-Depth Analysis
•	Once you’ve weighed the Costs and Benefits, you must assess the risks
•	Risk is additional to costs already considered
•	Risks include things like:
•	Currency fluctuations, 
•	Poor analysis of market potential
•	Cultural conflict esp. with marketing, 
•	Infrastructure and distribution problems, and
•	Government interference
The Nature of the Corporation
Before we can continue to explore the different modes of entry into new markets, we must first ensure that we all understand the nature of the corporate entity: 
Agenda
•	Part I: The Decision
•	Preliminary research of market potential
•	In-depth analysis
(The Nature of the Corporation)
•	Selecting a Mode of Entry
•	Part II: Factors Affecting Risk Analysis

The Nature of the Corporation
•	A corporation is a person
•	It is a legal entity that is separate and distinct from its owners
•	The shareholders own the corporation; the corporation owns the assets.
The Nature of the Corporation
The Nature of the Corporation
Agenda
•	Part I: The Decision
•	Preliminary research of market potential
•	In-depth analysis
(The Nature of the Corporation)
•	Selecting a Mode of Entry
•	Part II: Factors Affecting Risk Analysis

3. Mode of Entry
•	The method selected has major impact on  success

•	Organizations should make the decision that minimizes the costs and risks unique to their specific expansion opportunity
3. Mode of Entry
Decision Factors
Ownership advantages
Location
Need for control
Resource availability
Risk Minimization
3. Mode of Entry
3. Mode of Entry
3. Mode of Entry
3. Mode of Entry
3. Mode of Entry
3. Mode of Entry
3. Mode of Entry
3. Mode of Entry

Agenda
•	Part I: The Decision
•	Preliminary research of market potential
•	In-depth analysis
(The Nature of the Corporation)
•	Selecting a Mode of Entry
The Complexities of Political, Legal, and Economical Integration
1. Legal Systems
1. Legal Systems
1. Legal Systems
1. Legal Systems
•	At first it seems like these three systems are the same
•	Indeed, they are very similar
•	But the reason they are so similar is really quite simple…
1. Legal Systems
•	Likely a lot of what you know about these three nations seem the same to you
•	This is because much of the world lies in what are known as cultural clusters, and…
•	…these three nations are in THE SAME cluster
1. Legal Systems
•	This is why the U.K., Canada, and the U.S. seem so similar (and Australia, New Zealand, and South Africa)
•	Clearly, outside of Anglo-Saxon culture differences are enormous
•	Don’t let the similarities fool you:
•	Within these nations differences exist
•	This leaves us with the following question:
“How do legal systems differ?”
1. Legal Systems
•	Besides laws themselves, their application differs as well
•	The Rule of Law
•	Role of Lawyers
•	Burden of Proof
•	Right to Judicial Review

The Complexities of Political, Legal, and Economical Integration