Framework
Foreign market entry modes
The question it answers
When a business owner is about to take a product abroad, should they export, license, form a joint venture or invest directly to balance control, commitment and risk?
- Origin
- Dess et al., 2016; Johnson et al., 2008
- Diagram type
- Comparison table
- Level of analysis
- Firm
Diagram
Foreign market entry modes
| Criterion | Exporting | Licensing | Franchising | Joint venture | Wholly owned subsidiary |
|---|---|---|---|---|---|
| Control | Low | Low | Medium | Medium (shared) | High |
| Resource commitment | Low | Low | Low to medium | Medium | High |
| Capital risk | Low | Low | Low | Medium | High |
| Speed of entry | Fast | Fast | Fast | Medium | Slow (greenfield) or fast (acquisition) |
Pitfalls
Pitfall
The low/high levels are textbook tendencies, not measurements. Adjust them by industry and country.
Sources
References
Listed A–Z by author surname, Harvard style. A source with a DOI links to https://doi.org/…; one without links to its page or says plainly that it has no DOI.
- Dess, G.G., McNamara, G. and Eisner, A.B. (2016) Strategic management: text and cases. New York: McGraw-Hill Education.No DOISource page
- Johnson, G., Scholes, K. and Whittington, R. (2008) Exploring corporate strategy: text and cases. Harlow: FT Prentice Hall.No DOISource page
- Yoder, S., Visich, J.K. and Rustambekov, E. (2016) ‘Lessons learned from international expansion failures and successes’, Business Horizons, 59, pp. 233–243.doi:10.1016/j.bushor.2015.11.008Source page
- Zucchella, A., Hagen, B. and Serapio, M.G. (2018) International entrepreneurship. Cheltenham: Edward Elgar Publishing.No DOIe-elgar.comSource page