Entering foreign markets requires an analysis that examines each of the five major global entry strategies and their associated risks and rewards. It is important as a marketer that you understand the level of risk involved in each and also be able to identify which strategy firms are currently using.Firms looking to expand globally must address how they plan to enter international markets. Once a company has developed a marketing plan that involves global expansion, they have five major strategic options for how to enter the global marketplace: exporting, licensing, franchising, joint venture, and direct investment. Exporting is selling domestically produced products to foreign markets. Licensing is a legal process in which one firm pays to use or distribute another firm's resources. Franchising is a contractual arrangement in which the franchisor provides a franchisee the right to use its name and marketing and operational support in exchange for a fee and, typically, a share of the profits. In a joint venture, a domestic firm partners with a foreign company to create a new entity. Direct ownership requires a domestic firm to actively manage a foreign company or overseas facilities.Place the entry strategies (along with examples of each) in the correct order from least risky to most risky.Licensing - A legal process in which one firm pays to use or distribute another firm’s resources, including products, trademarks, patents, intellectual property, or other proprietary knowledge.KFC shares recipes and distribution information for 5 new KFC restaurants owned by local Saudi Arabian investors. Memphis Grizzlies gives logo and artwork to a Japanese company to sell Grizzlies' shirts locally.Exporting - Selling domestically produced products to foreign markets.Laske farms sells oranges and peaches grown in Florida to stores in Mexico. GM builds cars in U.S. and sells them to European buyers.Direct ownership - A method of entering an international market in which a domestic firm actively manages a foreign company or overseas facilities. Wendy's opens 29 new company-owned stores in Canada to test a new Frosty flavor. Wal-Mart builds 7 company-owned stores in China.Franchising - A contractual arrangement in which the franchisor provides a franchisee the right to use its name and marketing and operational support in exchange for a fee and, typically, a share of the profits. Subway provides a business owner in Vietnam the knowledge and information to run a Subway for a fee.Taylor Gas Stations allows an owner-operator in Chile the right to use its name and provides support as to how to best run the business.Joint venture - An arrangement in which a domestic firm partners with a foreign company to create a new entity, thus allowing the domestic firm to enter the foreign company’s market.Starbucks partners with a Russian coffee company to open a new chain of coffee shops in Moscow.NBC and Univision start a Latin American television network.
