The following costs and risks make the market entry decision more complex than home-country operations. Table 1 Costs involved in entering global markets |COSTS |CONSEQUENCES | |Start-up |Costs to establish operations in foreign market | |Information and Resources |Assessing viability of market | |Human Resources |High cost of training and recruiting global workforces/expatriates | |Marketing and Promotional |Creation of image takes time, effort and money because brand names are difficult to build | |Government Compliance |Costly to meet government-set standards or adapt business practices to follow host countries | | |regulations | |Enforcement of Contracts (Legal) |Ensuring suppliers/partners comply to agreed contract | |Transaction |Can become a high barrier to international trade | |Logistics |Limit direct monitoring of trade partners | |Infrastructural |Increases of distribution | Table 2 Risks involved in entering global markets |RISKS |CONSEQUENCES | |Physical Distance |Less control of operations; limits direct monitoring of trade partners | |Language Barriers |Can create communication problems; limits direct monitoring of trade partners | |Weak Legal Integration |Lack of legal consistency creates delays and communication problems | |International Competition |Anonymity in new market or less brand awareness; more intense competition | |Asset specific equipment |Makes owner very vulnerable to the bargaining power of raw material suppliers and product | | |buyers who process alternative production or trading options | |Value chains |May effect value of some or all activities in chain | Figure 1 shows the natural evolution of a company’s international operations...
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There are many options that a company can implement in entering foreign markets. [pic] Figure 1 Control vs. Resource Commitment (Adapted from International Marketing by Pervez Ghauri) Concerning investment and control, the main issue is to what extent the company chooses to control its own fate. The degree of risk involved, attitudes, and the ability to achieve objectives in the target markets are important factors in the decision on whether to license, joint venture or directly invest...
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Merk and the vioxx issue (New Scientist, 6-7) Another setback from Merck neglecting to look into this massive “accident” was their stocks. They took quite a low blow as well. (Cavusgil, 455) Suspicions started to run wide throughout Merck...	2 / 480
Vioxx and Merck & Co. However, 10 of the government drug advisers who supported the continuance of Vioxx were in some way tied financially to the drug. Without their votes, the committee would have voted that Vioxx should not return to the market...	3 / 584
FDA and Merck The FDA which was already one of America's most trusted companies in the medicine industry, has lost the faith that customers always had. To regain the trust of the public, the company could have different public announcements to explain the situation and what occurred with the Vioxx scandal...	2 / 386
Merck - Ethical Decisions This study is believed to have tipped the risk benefit equation leading to the September 30th, 2004 global withdrawal (Emerson, 2004). Merck policies maybe legal but are they ethical? Merck used outdated and misleading data to indicate that Vioxx was safer than alternatives...	3 / 642