Compare exporting, licensing, franchising, specialized contracts, and foreign direct investment. Weigh control, resource commitment, cost, and risk to decide how a firm should enter its chosen market.
Compare exporting, licensing, franchising, specialized contracts, and foreign direct investment. Weigh control, resource commitment, cost, and risk to decide how a firm should enter its chosen market.
Explore the major modes of foreign-market entry using the interactive console, then test your understanding in the built-in game. Review definitions, advantages, and disadvantages as you move through the seven entry modes.
Launch Mode of Entry GameWork through a series of international expansion decisions. Your team will need to match the conditions of a foreign market with an appropriate entry strategy while balancing control, commitment, cost, and risk.
Be ready to explain the tradeoff behind your choice. The goal is not simply to name an entry mode, but to defend why it fits the situation better than the alternatives.
Launch Mode of Entry Team ExerciseBuild Venturea’s international portfolio by collecting one opportunity in each of three rounds. Review each card’s entry mode, setup costs, annual revenue, and recurring costs. Compare five-year outcomes, choose an opportunity, and explain the financial evidence and tradeoff behind your decision.
Lock one choice per round and continue to the next. Your choices remain in the portfolio ledger. After Round 3, open the Sandbox and reimagine either the Brayland contract-manufacturing deal or the Noveria acquisition. Use AI-assisted research to support three analyses: setup costs, operational costs, and revenue. Keep each input within ±10% and show evidence and calculations that justify the change. This prepares you for your upcoming team project. Complete all three rounds to see whether your portfolio produces a profit, breaks even, or generates a loss. In the turnkey round, count each project fee once rather than multiplying it by five.
Exporting, licensing, franchising, specialized modes, FDI, and the OLI framework.
Exporting: The process of sending goods or services from one country to another for use or sale.
Foreign Direct Investment (FDI): An investment made by a company or individual in one country into business interests located in another country, giving the investor control over the acquired assets.
Greenfield Strategy: A type of FDI where a company builds new facilities from the ground up in a foreign market.
Acquisition Strategy (Brownfield Strategy): A type of FDI where a company purchases an existing business in a foreign market.
Licensing: An arrangement where a firm (licensor) grants another firm (licensee) the rights to use its intellectual property (e.g., patents, trademarks, copyrights) in exchange for a fee (royalty).
Franchising: An agreement where a firm (franchisor) grants an independent operator (franchisee) the right to operate a business under its name, using its business model, in exchange for fees and adherence to operating standards.
Contract Manufacturing: An arrangement where a firm outsources its manufacturing to a third-party company, often in a foreign country, to reduce costs or gain efficiency.
Management Contract: An agreement where one company provides managerial assistance, technical expertise, or specialized services to another company for a specified period in return for a fee.
Turnkey Project: A contract under which a firm agrees to fully design, construct, and equip a facility and then hand it over to the purchaser in a ready-to-operate state.
Export Management Company (EMC): A firm that acts as the export department for one or more client companies, providing expertise in international marketing, logistics, and finance.
Dunning's Eclectic Theory: A framework explaining the extent and pattern of international production, based on the interplay of ownership advantages, location advantages, and internalization advantages.
Market Potential: The total demand for a product or service in a particular market, often assessed by factors like population, GDP, and consumption patterns.
Trade Barriers: Government-imposed restrictions on the free flow of goods and services across borders, such as tariffs and quotas.
Sociocultural Influences: The customs, beliefs, values, and behaviors of a society that can impact business decisions and consumer preferences in a foreign market.
Check how well you can distinguish entry modes, apply the OLI framework, compare costs and returns, and support proposed improvements with evidence. Review the glossary, Modes of Entry infographic, and your Entry Mode Challenge results before you begin.