A company has a choice of four different modes of foreign market entry. Briefly describe each of these modes.
Following are the four modes for an entry to a foreign market.
- Exporting Mode: In this kind of entry the company acts as an exporter to a foreign market. The exports could be direct exports, indirect exports or intra corporate transfers.
- Licensing: A company can get a license for a certain product or service to expert to a foreign country.
- Franchising: A company can offer its franchises to other individuals or companies in other countries. Just like we see the franchises of McDonald, Pizza Hut and Starbuck in other countries.
- Special Modes: These modes consists of making a contract for manufacturing for a certain company to make their brand products. The best example could be that of Bangladesh from where many export companies arise to manufacture different clothing brands for developed countries.