DECIDING HOW TO ENTER THE MARKET

a.      Exporting.

Exporting can be of two kinds which are following.

1.  Indirect Exporting:  works through self-governing international intermediaries and occupy less investment by the exporter.

2.   Direct Exporting: occupy more risk and investment like the firm sets up its own presence in the host country but the potential return is also higher.

b. Joint Venturing.

 Firms have four kinds of joint venture available to them.

1.   Licensing: it is occurs when a company enters into an agreement along a licensee in the foreign market.  Licensing consist little risk but also little control.

2.   Contract Manufacturing: arranges for a foreign manufacture to make manufacture in the host country for that market.

3.   Management Contracting: has the exporting firm give the management team with the host country supplying the capital.

4.   Joint Ownership: it consists of one company joining with another in the host country to make a local business in which they share owner ship and control.

c.  Direct Investment

Direct investment occurs while the exporting firm enters in a foreign market by developing foreign- based assembly or built-up facilities.