What are the major ways of entering a foreign market?

Once a company decides to target a particular country, it must determine the best mode of entry.

1 Indirect exporting

Company sells their products through independent intermediaries

Types of intermediaries

Domestic-based export merchants

Domestic-based export agents

Cooperative organizations

. Export-management companies

less investment

less risk

Direct exporting

Means of direct export

Domestic-based export department

• Overseas sales branch

Traveling export sales representatives

• Foreign-based distributors

The licensor issues a license to a foreign company to use a manufacturing process,trademark,patent,trade secret,or other item of value for a fee or royalty

Types of licensing arrangements

Management contracts

Marriott sell management contracts to owners of foreign hotels to manage these businesses for a fee.

Contract manufacturing

In contract manufacturing , firms hire local manufacturers to produce many of its products

Franchising

The franchisor offers a complete brand concept and operating system. In return, the franchisee invests in and pays certain fees to the franchisor

Foreign investors have often joined local investors in a joint venture company in which they share ownership and control

To reach more geographic and technological markets and to diversify its investments and risk

Direct investment

The foreign company can buy part or full interest in a local company or build its own manufacturing or service facilities