Every multinational business has somewhere started as a local business and over time has adopted different modes of entry into the international business. When businesses grow successfully within their domestic markets, they attempt to expand their businesses into international markets, in an attempt to replicate its success in overseas markets (Noe, Hollenbeck, Gerhart, & Wright, 2006). Some of the modes of entry into international business you can opt for include direct export, licensing, international agents and distributors, joint ventures, strategic alliance, and foreign direct investment (Peng, 2009).

Direct exporting involves you directly exporting your goods and products to another overseas market. For some businesses, it is the fastest mode of entry into the international business. In case you foresee a potential demand for your goods and products in an overseas market, you can opt to supply your goods to an importer instead of establishing your own retail presence in the overseas market.

Companies which want to establish a retail presence in an overseas market with minimal risk, the licensing and franchising strategy allows another person or business assume the risk on behalf of the company.

A joint venture is one of the preferred modes of entry into international business for businesses who do not mind sharing their brand, knowledge, and expertise.

Strategic acquisition implies that your company acquires a controlling interest in an existing company in the overseas market.

Foreign Direct Investment involves a company entering an overseas market by making a substantial investment in the country. Some of the modes of entry into international business using the foreign direct investment strategy includes mergers and acquisitions, joint ventures and greenfield investments.

Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2006). Human resource management. China People’s University Press.

Peng, M. (2009). Global business. Boston: Cengage Learning.

Prompt: What are the distribution options that a direct exporter can use, and what are the primary strengths and weaknesses of each type?

Supplementary Resources

Market entry in International Business:

https://www.youtube.com/watch?v=FIAMRPIPhaw

Mode of Entry Options for International Marketing

https://www.youtube.com/watch?v=-v3uqD1hWGE

What global trade deals are really about (hint: it’s not trade)