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LEARNING OBJECTIVES
- Understand the various options for entering an international market.
- Be able to provide an example of a firm using each option.
When the executives in charge of a firm decide to enter a new country, they must decide how to enter the country. There are five basic options available: (1) exporting, (2) creating a wholly owned subsidiary, (3) franchising, (4) licensing, and (5) creating a joint venture or strategic alliance. These options vary in terms of how much control a firm has over its operation, how much risk is involved, and what share of the operation’s profits the firm gets to keep.
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