Exercise 2. Foreign market entry modes.

Answer the following questions using the appropriate theories and models.

a)Korean company has been exporting cosmetics to the European Union for the last 25 years. The EU market represents 55% of the company's revenue. What would be the possible business strategies for the company if the EU implements a 45% tariff on Korean goods?

b)Suppose that this Korean company possesses two important ownership advantages: Efficient bio-cosmetics manufacturing techniques and a reputation for producing high quality cosmetics. What would be the possible business strategies for the company to enter the EU market?

c)Suppose that this cosmetics-producing company is Korean Beauty, a brand which is already well-known in many countries. If a company would like to maintain the brand familiarity, would be the possible business strategies for the company to enter the market of Brazil?