Turnkey
project (Specialized entry mode)
A
turnkey project is a contract under which a firm agrees to fully design,
construct and equip a manufacturing/business/service facility and turn the
project over to the purchaser when it is ready for operation, for remuneration.
It is actually a method for a foreign company to export its process and
technology to other countries by building a plant in that country. The company
hires a contractor in the desired country that they want to create an
operation. The turnkey
contractor is responsible for the:-
– Design
– Construction
– Installation of a new plant
– Maintenance of the plant ( in some cases)
At
the completion of the contract, the foreign company gives the “key” to
the project and it is ready for operation.
example:
Larsen & Toubro (L &T), Fiat etc.
Contract
Manufacturing (Specialized entry modes)
Contract
manufacturing is a process that establishes a working agreement between two
companies. As part of the agreement, one company produces parts or other
materials on behalf of their client. Simply it can be defined as the process of
outsourcing entire or part of a company’s manufacturing operations.
example: The iPad and iPhone, which
are products from Apple Inc., are manufactured in China by Foxconn. Hence,
Foxconn is a contract manufacturer. Ponds, Hindustan Lever etc.
Management
Contract (Specialized entry mode)
A
management contract is an agreement between two companies whereby one company
provides managerial assistance, technical expertise and specialized services to
the second company for a certain period of time in return for monetary
compensation.
example: Schools, sports facilities,
hospitals, office buildings, malls and large businesses have on-site
cafeterias, restaurants.
