Discuss the factors which will influence the method of entry into international markets if Option A is chosen.

Mark scheme

Marking points from the official mark scheme (May/June 2019). The mark or mark type is shown in brackets.

1. [Knowledge] Entry methods explained – own stores, franchise, joint venture, buyout
2. [Knowledge] Identification of factors
3. [Knowledge] possible costs
4. [Knowledge] objectives
5. [Knowledge] timescales
6. [Knowledge] finance available
7. [Knowledge] existing links and contacts
8. [Knowledge] government policies in entry market
9. [Application] Reference to fine jewellery
10. [Application] Use of case reference to 'Control of distribution and marketing to maintain profit margins'
11. [Application] Continue to sell through existing channels (specialist stores, existing store, major brands)
12. [Application] Gearing of BSJ is 54.5% and link to cost of entry
13. [Application] BSJ owns store in home country so has experience
14. [Application] Has experience of selling to retailers in other countries
15. [Analysis] Analysis of options:
16. [Analysis] Operating own stores likely to be more expensive than franchising
17. [Analysis] Joint venture gives benefits of sharing responsibilities and costs thus reducing burden on BSJ
18. [Analysis] Franchising gives benefit of knowledge of franchisees. Less cost providing potentially quicker expansion for BSJ
19. [Analysis] Loss of control of service quality with franchising
20. [Analysis] Buy out of existing business could result in culture clash, is expensive as have to pay for goodwill but quicker than expanding through own stores
21. [Analysis] Factors include strategic objectives and resources available
22. [Analysis] Link possible factors to entry methods e.g. gearing of 54.5% makes borrowing more risky for high cost entry methods
23. [Analysis] Link possible factors to BSJ existing strategy, market conditions, possible future plans
24. [Evaluation] Conclusion on relative importance of factors
25. [Evaluation] Which option can BSJ afford to finance? High gearing - would Banks lend for more expensive options
26. [Evaluation] Which option enables BSJ to retain the most control?
27. [Evaluation] Conclusion on factors in relation to BSJ strategy and planning