| Course | MT220 Global Business |
|---|---|
| Unit | Unit 5 |
| Paper type | Market entry analysis |
| Length | About 1,110 words, 7 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Business Administration |
| Updated | October 2026 |
Free sample paper for MT220 Unit 5
Five Ways Into Colombia, Three Left Standing: A Unit 5 Market Entry Analysis for a Tacoma Roaster Maker
[Student Name]
Purdue University Global
MT220: Global Business
Unit 5 Market Entry Analysis
[Instructor Name]
[Date]
Cascade Drum Works, the Colombian partners and every figure are composite and illustrative; bracketed figures stand where quotes and the firm's records would supply the numbers; the sources cited are real.
The Decision and the Firm's Limits
Cascade Drum Works has decided to enter Colombia, the market chosen in Unit 2. The question now is how. Three limits shape the answer. The firm has [22] staff and nobody fluent in Spanish. It has about [$250,000] available to spend on the market over the first two years without borrowing. And its roasters need a trained technician within a day's drive of every buyer, because a failed burner during harvest can cost a grower a season's roasting.
Root (1994) treats the entry decision as a balance: the more a firm wants to run things itself abroad, the more money and risk it must put in. Anderson and Gatignon (1986) frame the same choice through transaction costs: firms take more control when the assets involved are specialized and hard to protect, and less when partners can do the work reliably at lower cost.
Five Modes
Direct export without a local partner would mean selling from Tacoma to growers, shipping each machine and sending technicians from the United States. It is cheap to start but fails the service test: a technician flying from Tacoma would take three days to reach a farm near Pereira. It drops out.
Franchising would mean licensing a business format, such as a branded roastery, for local operators to run. Cascade sells equipment, not a repeatable business, so there is nothing to franchise. It drops out.
Exporting through a distributor would mean signing a Colombian company to import, sell, install and service the roasters, buying them from Cascade at a discount and reselling them. A distributor already selling coffee processing equipment, such as hullers and dryers, to farms in the coffee axis would have customers, technicians and import experience.
Licensing would mean allowing a Medellin fabricator to build Cascade's roaster design under license, paying a royalty on each machine. Local manufacture would avoid shipping and price the machines in pesos.
A wholly owned sales subsidiary would mean opening a Cascade office and service center in Pereira, hiring local staff, importing machines and selling directly.
The Comparison
The three remaining modes are scored on six criteria from one to five, where five is best for Cascade: control over sales and service, investment required, risk, speed to first sale, service capability and protection of the design.
Exporting through a distributor scores 3 on control, 5 on investment, 4 on risk, 5 on speed, 4 on service and 4 on protection, a total of 25. It costs Cascade little beyond a demonstration machine and training, perhaps [$60,000] in the first year. A good distributor could sell its first machine within months, and its technicians would be close to buyers. Cascade would give up some control over price and customer relationships. It would also raise the price growers pay, since the distributor adds its own markup, perhaps a quarter, on top of what it pays Cascade.
Licensing scores 1 on control, 5 on investment, 3 on risk, 3 on speed, 4 on service and 1 on protection, a total of 17. It earns royalties without shipping costs, but the drum, burner and control design are Cascade's main assets, and a licensee in a market with weaker enforcement could learn them and later build its own version. Dunning (1988) argued that a firm's ownership advantages, such as proprietary technology, give it reason to keep production in-house rather than license, and that logic applies strongly here.
A wholly owned subsidiary scores 5 on control, 1 on investment, 2 on risk, 2 on speed, 5 on service and 5 on protection, a total of 20. It would cost about [$220,000] in the first two years for an office, a service technician, a sales manager and inventory, close to the whole budget, before any sales. It would also take the longest to set up, since the firm would need to register a company, hire staff and build relationships from nothing.
The Choice
Exporting through a distributor is the best entry mode now. It fits the budget, reaches buyers quickly and solves the service problem by using technicians who already work in the coffee axis. It also protects the design better than licensing, since the distributor sells finished machines rather than building them. Johanson and Vahlne (1977) argued that firms usually commit resources to a foreign market gradually as they learn, and a distributor lets Cascade learn about Colombian buyers before committing to an office.
The distributor sells the roaster without ever seeing its drawings.
Choosing the Distributor
The distributor should already sell processing equipment to coffee farms, have at least two trained technicians in the coffee axis and be willing to keep a stock of spare parts. Cascade should sign a two-year agreement with exclusive rights in the coffee axis, tied to minimum annual sales of [six] machines, and keep the right to appoint other distributors in Bogota and Medellin. The agreement should include training at Cascade's expense, a demonstration machine on consignment and clear pricing rules, so that the distributor's markup does not price the machine out of growers' reach.
When to Move Toward Ownership
Three conditions would justify moving toward a subsidiary later. The first is volume: if Colombian sales reach about [fifteen] machines a year, the distributor's margin would exceed the cost of Cascade's own office. The second is service quality: if the distributor's response times or installation quality fall short and cannot be fixed, Cascade would need direct control. The third is regional growth: if Cascade adds neighboring markets such as Ecuador or Peru, a Colombian hub could serve them all. Any of the three should prompt a review in year two.
Risks
The main risk is choosing the wrong distributor, which can lock Cascade out of the market for the length of the agreement. Checking references with growers, visiting the distributor's service shop and starting with a two-year term limit that risk. Colombian law on commercial agency can also entitle some agents to compensation when an agreement ends, so the contract should be reviewed by a Colombian lawyer and drafted as a distribution agreement for resale rather than as an agency. A second risk is that the distributor favors other brands it sells, which minimum sales targets and a shared marketing budget help address.
References
Anderson, E., & Gatignon, H. (1986). Modes of foreign entry: A transaction cost analysis and propositions. Journal of International Business Studies, 17(3), 1-26. https://doi.org/10.1057/palgrave.jibs.8490432
Dunning, J. H. (1988). The eclectic paradigm of international production: A restatement and some possible extensions. Journal of International Business Studies, 19(1), 1-31. https://doi.org/10.1057/palgrave.jibs.8490372
Johanson, J., & Vahlne, J.-E. (1977). The internationalization process of the firm: A model of knowledge development and increasing foreign market commitments. Journal of International Business Studies, 8(1), 23-32. https://doi.org/10.1057/palgrave.jibs.8490676
Root, F. R. (1994). Entry strategies for international markets (Rev. ed.). Jossey-Bass.
The Purdue Global MT220 Unit 5 instructions
In Unit 5 the prompt usually lists the classic ways into a foreign market, from simple exporting through licensing and franchising to joint ventures and full ownership, and asks which one this firm should use. Describe each briefly, eliminate those the firm could not realistically use with a stated reason, and compare the rest in depth on criteria such as control, investment, risk, speed and protection of know-how. A scoring matrix is common. The recommendation should fit the firm's limits, including staff, money and the product's service needs. Many sections reward conditions for changing the mode later, since entry is often the first step in a sequence. Foreign ownership rules can come from investment promotion agencies and Country Commercial Guides. Expect about five pages, with Anderson and Gatignon or Root among the sources.
Inside the MT220 Unit 5 example
The analysis names the decision and the firm's three limits, then frames the choice with Root and with Anderson and Gatignon. Five modes are each described in terms of what they would mean for the firm, and a margin note explains why two drop out early. The comparison scores the remaining three on six criteria, explains each score with cost and timing estimates, and uses Dunning to show why licensing would risk the design. The choice section selects the distributor, with Johanson and Vahlne on learning before committing, and the highlighted line notes that the distributor never sees the drawings. A section sets criteria for choosing the distributor and the terms of the agreement. Three triggers for moving toward ownership follow with a second note, and a risk section covers the wrong partner and Colombian rules on commercial agency.
MT220 Unit 5 rubric: what earns full points
Market entry analyses are usually graded on the fairness of the comparison and the fit of the recommendation. Eliminating modes with a stated reason shows judgment rather than omission. Distributor, licensee and subsidiary should face one shared scorecard, and every score needs a sentence of reasoning. Graders reward analyses that use theory to explain a choice, such as the risk of licensing a proprietary design. The recommendation must fit the firm's actual resources and the product's service needs. Specific partner selection criteria and agreement terms show practical thinking. Conditions for changing the mode later demonstrate an understanding of internationalization as a process. Risks should be named with responses. Root, Anderson and Gatignon, Dunning and Johanson and Vahlne need correct APA 7 entries.
MT220 Unit 5 help: mistakes that cost points
Entry mode papers often fall short by describing every mode at the same length and recommending one without comparing it fairly. Another common problem is choosing a subsidiary or joint venture that the firm cannot afford. Some writers score modes without explaining the scores. Others ignore service and support, which can decide the choice for equipment. Licensing risks to know-how are often overlooked. Recommendations rarely say what would change the decision later. Watch for foreign ownership or agency rules that limit options, and cite where you found them. If your firm is large, the same method applies with different limits. Tell our writers the company, its resources and the target country, and they can help compare the modes and build a recommendation that fits.
Get an MT220 Unit 5 example written to your instructions
The firm and country are set by the Unit 5 prompt; forward it, the rubric, and anything the case says about capital or staff. A custom analysis narrows the modes, weighs the survivors against criteria drawn from that firm and commits to one, ready in 24-48h. The first sample is free, and any mode your instructor requires gets compared. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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MT220 Unit 5 questions, answered
Must every entry mode in the readings appear in the analysis?
Describe the modes the prompt lists, but compare in depth only those the firm could realistically choose, usually three. Dropping a mode early is fine if the paper states the fact that ruled it out. A matrix with five columns, two of them impossible for the firm, spreads the analysis thin without adding judgment.
Is franchising ever right for a manufacturer?
Rarely for equipment alone. Franchising transfers a business format, meaning a brand, an operating system and ongoing support, to independent owners who pay fees. A manufacturer can franchise a service built around its product, such as a repair network or a training school, but selling machines through franchisees usually adds cost without transferring anything buyers need.
Where do facts about foreign ownership rules come from?
Investment promotion agencies publish rules for foreign investors, and Colombia's agency, ProColombia, is a common starting point. The US State Department's Investment Climate Statements summarize ownership limits, screening and dispute settlement country by country. Cite the edition year, because ownership limits get revised, and check sector restrictions separately when the product falls in a regulated category.
Where can I find a free MT220 Unit 5 sample paper?
A complete MT220 Unit 5 market entry analysis appears on this page. It describes five entry modes for a roaster maker, scores three on six criteria, chooses a distributor, sets agreement terms and triggers for change and includes margin notes.
Why does the sample reject licensing the design?
The drum, burner and controls are the firm's main assets, and a Medellin licensee could learn them and later build its own version. Licensing scores only 17 against 25 for a distributor that sells finished machines.