There are two methods to entry into international markets. They are Indirect Exporting and Direct exporting. In the first type the manufacturers take the help of merchent exporters to get products ex-ported to foriegn markets. In direct exporting, the manufacturers decides to export themselves. Apart from direct and indirect exporting,the other popular methods of entering international markets are :
Joint ventures - A joint venture is a stategic alliance where two or more parties usually businesses form a partnership to share markets, intellectual properties, assets, knowledge and profits. A joint venture differs from a merger, in the sense that there is no transfer of ownership in the deal. For ex-ample, Best Price Modern Wholesale is a joint venture between Wal-Mart and Bharti Enterprises. American retail gaint Wal-Mart chose this route to enter the Indian market.
Strategic allaince - A strategic allaince is formed when two or more business join together for a set of period of time. The companies, generally are not in direct competetion but have similar product or services that are directed towards the same target group. For example, Tata Motors and Fiat en-tered into a strategic allience to cooperate in areas like research and developmont and marketing. Chosing this strategic allience as the entry mode will overcome some of those problems like estab-lished competition, hostile government regulations and operating complexity.It helps reduce the en-try cost also.
Direct investment - Through Foreign Direct Investment a firm invests directly in facilities to pro-duce and market a product in a fireign country. For examole, in the early 1980’s, Honda, a Japanese automobile company, built an assembly plant in Ohio and began to produce cars for the North American market. These cars were substitutes for imports from Japan.Once a firm undertakes direct investment it becomes a multinational Enterprise.
Contract manufacturing - Contract manufacturing is a...