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.

  1. 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.
  2. Licensing: A company can get a license for a certain product or service to expert to a foreign country.
  3. 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.
  4. 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.