Modes Of Entry Of A Foreign Market Essay

1789 Words Nov 13th, 2016 8 Pages
2.1 Modes of entry
Modes of entry is the strategic choose of how a company wants to enter into a foreign market in such a way that it will have a positive impact for the company and the area you are trying to enter. (Foreign Market, 2016) There are four major sections that must be considered when entering into a new market the first is Exporting, then Licensing, Joint Venture, and last Direct Investment. (Foreign Market, 2016)
Exporting by many leading experts is considering the easiest way of entering a new market. It’s the easiest because the company is exporting the product directly into the market so all they have to do is focus on sells. Exporting is the most well established method of entering into the foreign markets, because there is no investment into the foreign country, or facilities. Most of the costs are tied up into exporting fees like tariffs, and marketing strategies. (Foreign Market, 2016)
Licensing are permits given to a company within the target country. Such licensing’s usually in the form of things like trademarks, patents, and intellectual properties. The fees that the company pays for is the exchange for those rights; because little investment is required there is the potential for the company to see large returns on investment (ROI). The only down side is the there is a chance that “potential returns form the manufacturing and marketing activities may be lost” (Foreign Market, 2016)
Joint venture has five common goals; market entry, sharing,…

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