International Market Entry Methods

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 International Market Entry Methods 



The most popular methods include:

Direct Export - This involves producing the product in the home market and selling it overseas.

Indirect Export - This involves including a third party seller to whom the organizations sell their products, who then on their behalf sell them in the foreign market.

Licensing - In this the Licensor grants the organization the license to produce. The license may also include other aspects such as brand name usage and royalty payment in its return and so on. It has lesser risk factor than other methods.

Franchising - It is another kind of licensing. In this, the organizations create a franchise of the packages that have been successful in their home market and offer it to their overseas investors. The organizations also assist their investor by providing proper training and in many cases also by marketing the products and services.

Contracting - This involves an organization’s getting into a contract with another organization asking it to produce on its behalf. This proves beneficial as it saves the organization from the process of exporting to foreign market.

Manufacturing Abroad - This involves establishing a manufacturing plant in the host country. In some cases, the government of the host country provides tax advantages as this method creates employment openings, helping their economy grow well.

Joint Venture - It involves the coming together of two organizations forming a joint company in order to operate in the host country. This way not just the profits, expertise and knowledge is shared between the organizations but also the market risks.

 

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