April6,2004PhaseIIReport:EntryStrategyforHisamitsuChinaMarketEntryProjectApril30,2025Confidential,Copyright@2003bySinotrust2HisamitsuChinaMarketEntryStrategyContentsModeofChinamarketentryAnalysisofentrymodesforHisamitsuentrystrategyExportingLicensingJointVentureWhollyOwnedSubsidiaryTheevaluationoffourentrymodesSuggestionofentrystrategyforHisamitsuMainworkflowaccordingtoeachphaseApril30,2025Confidential,Copyright@2003bySinotrust3HisamitsuChinaMarketEntryStrategyModeofChinamarketentryApril30,2025Confidential,Copyright@2003bySinotrust4HisamitsuChinaMarketEntryStrategyInpractice,therearemainly3typesofmodesforinternationalentrytoChina,i.e.,traderelatedmodes,transferrelatedentrymodesandforeigndirectinvestmentrelatedentrymodesInternationalentrymodesTraderelatedmodesTransferrelatedentrymodesForeigndirectinvestmentrelatedentrymodes•Exporting•Subcontracting•Countertrade•InternationalLeasing•InternationalLicensing•InternationalFranchising•Build-Operate-Transfer•EquityJointVenture•WhollyOwnedSubsidiaryApril30,2025Confidential,Copyright@2003bySinotrust5HisamitsuChinaMarketEntryStrategyTraderelatedmodesmainlyincludeexporting,subcontractingandcountertradeTraderelatedmodesExportingSubcontractingCountertradeExporting:usingintermediariestoexportproductstomarketthroughanexportingcompanywhilenegotiatinglettersofcreditandtermsoftradethatarefavorable.Subcontracting:includescontractingwithalocalmanufacturertoprocessgoodsintofinishedgoodsthatwilldistributeintothelocalmarket.Countertrade:wheremerchandiseistradedinabarter-likesystem.Barter,counterpurchase,buybacks,andoffsetsandusedinthismethod.ThepossiblechoiceamongtheaboveforHisamitsuisexportingApril30,2025Confidential,Copyright@2003bySinotrust6HisamitsuChinaMarketEntryStrategyTransferrelatedentrymodesmainlyincludeinternationallicensing,internationalleasing,internationalfranchisingandbuild-operate-transferTransferrelatedentrymodesInternationalLicensingInternationalLeasingInternationalFranchisingBuild-Operate-TransferBuild-Operate-Transfer(a.k.a“turn-keyoperation”)Onefirm(thelicensor)sellsorleasestherighttouseitsintellectualproperty(technology,patents,copyrights,trademarks,etc.)toanotherfirm(thelicensee),forafee(royaltypayment).ThepossiblechoiceamongtheaboveforHisamitsuisinternationallicensingOnefirm(theleaseholder)leasestherighttouseitsequipmenttoanotherfirm,forafee.Onefirm(thefranchisor)hascommittedtime,energiesandresourcestoattractandsupportqualifiedpartnerswithintheinternationalcommunity.April30,2025Confidential,Copyright@2003bySinotrust7HisamitsuChinaMarketEntryStrategyForeigndirectinvestmentrelatedentrymodesmainlyincludeequityJVandwhollyownedsubsidiaryForeigndirectinvestmentrelatedentrymodesEquityJointVentureWhollyOwnedSubsidiaryEquityjointventuresareanequitysharingarrangementbetweentwopartnersoraconsortiumofthreeormorepartners.Thepartnerssharetherisksofajointventureentityandshareprofitsorlossesinproportiontotheirequityownership.WhollyOwnedSubsidiaryaresubsidiaryinothernationinwhichtheparentcompanyhasfullownershipandsoleresponsibilityforthemanagementoftheoperation.TheabovetwomodesarebothpossiblechoicesApril30,2025Confidential,Copyright@2003bySinotrust8HisamitsuChinaMarketEntryStrategyTherearefourmodesofentryforHisamitsu:Exporting,Licensing,JointVentureandWhollyownedsubsidiaryInternationalentrymodesTraderelatedmodesTran...