Business Studies · Ch 11 — International Business
Modes of Entry into International Business
11.2
Modes of Entry into International Business
The word "mode" simply means the manner or way of doing something. So the phrase "modes of entry into international business" refers to the various ways in which a company can enter international business. Some of these were touched upon while discussing the meaning and scope of international business.
A firm can choose from several routes, each with its own advantages and limitations, and each suited to different conditions. The important modes discussed in the following sections are:
- Exporting and Importing — sending goods/services abroad and buying them from abroad.
- Contract Manufacturing — getting goods produced by local manufacturers abroad to one's own specifications (outsourcing).
- Licensing and Franchising — granting another firm the right to use one's technology, patents or trademarks for a fee.
- Joint Ventures — setting up a firm jointly owned with one or more independent partners. …