Part 4 Entering and

operati 门 9

in international markets

• Use contemporary technology to minimise counterfeiting. Many firms build
biotech tags, electronic signatures or holograms into their products to differentiate
them from fakes.
• Continuously update technologies and products. The firm that regularly renews
its technology can stay ahead of counterfeiters by offering products that counterfeiters cannot imitate fast enough. Also differentiate products by emphasising a
strong brand name. Customers usually prefer established brands 出at feature the
latest technology.
1n the long run, the best way to cope with the consequences of infringement is to
sustain competitiveness through innovation and consfant technological advances. Then,
even when licensing violations occur, the firm is protected because the stolen property
rapidly becomes obsolete. Firms also lobby national governments and international
organisations for stronger intellectual property laws and more vigilant enforcement, with
limited success. Ultimatel予 when contractual strategies prove u日desirable or ineffecti时,
focal firms may step up to the higher-control entry strategy of acquiring ownership ,
which accompanies FDI.

Closing Case
Subway and the challenges of franchi~ing in China
SubwaYr the fast-food marketer of submarine sandwiches
and salads , has over 32000 stores in 90 countries and
generates over US$12 billion in annual revenues. The
franchising chain opened its first international restaurant
in Bahrain in 1984. Since then r Subway (www.subway.
com) has expanded worldwide , and generates about
20 per cent of its annual revenues abroad. The firm
expects foreign markets to contribute to much 剖 its
future growth.

outside and watched for a few days. When they finally
tried to buy a sandwich , they were so confused that
Bryant had to print signs explaining how to order. They
didn't believe the tuna salad was made from fish because
they could not see...

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