Answer:
When a company uses the non-equity mode in order to reach foreign markets, it will export their goods to a trading company, or license it products to a foreign company or it might even establish franchises in a foreign company that are owned and operated by third parties. I.e. the company does not invest directly in the foreign country. The main advantage is less capital required and less risk assumed. The main disadvantage is that the company doesn't control the operations in the foreign country.
When a company uses the equity mode in order to reach foreign markets, it will establish a subsidiary, or form a joint venture with a local company. I.e. the company will invest directly in the foreign country. The main advantage is that the company can control the operations in the foreign country. The main disadvantage is that it requires a larger investment and risk is also higher.
