A contractual entry mode in which a company that owns intangible property (the licensor) grants another firm (the licensee) the right to use that property for a specified period of time Franchising A contractual agreement in which one company (the franchiser) supplies another (the franchisee) with intangible property and other assistance over. Let’s look at the two main contractual entry modes, licensing and franchising. Requires extensive research. Licensing is low risk in terms of assets and capital investment. Study with Quizlet and memorize flashcards containing terms like 1) Contractual entry strategies in international business are cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. These are trade mode, investment mode and contractual entry mode. all of the above e. Ask a question to Desklib · AI bot. They often enjoy complete de facto strategic and operational control (Contractor and Kundu, 1998b; Dunning, 1988). 3. Besides, wholly-owned subsidiaries are the most usual ownership mode, since we only found four joint ventures. ,The study has identified the knowledge gap concerning suitable contract risk management strategies available for implementation to effectively prevent any contract parties from losing money, time and. 3 operations (i. g. 1. Exporting, importing, and countertrade 2. 3 Contractual Entry Modes in North America, West Europe and Other Countries After 2001,. Global Entry Strategy A Global Entry Strategy is the planned method of delivering goods or services to a new target market and distributing them there. There are various types of entry models in to international market, however, all are divided into three groups namely, export entry, contractual entry and investment entry modes (young et al,1989; Roots. Which markets to enter. Contractual modes involve the use of contracts rather than investment. LO 4: Licensing, Franchising, & Other Contractual Strategies 14 Contractual entry strategies in international business Cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. Third, firms that face seasonal domestic demand. The time required to implement entry modes to foreign markets may strongly vary: contract-based entry modes usually entail quicker realization compared to equity-based entry modes. The contractual agreements include licensing, franchising and turnkey projects. cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit contract. There are many different ways to enter a market, and the most appropriate method depends on the. The. Let’s look at the two main contractual entry modes, licensing and franchising. (2005). The mode of entry depends on the opportunity, what you know about it, and the opportunity cost of putting that effort and money into another opportunity. Changes in the franchisors’ strategy may be slow to implement, because franchise contracts usually run for 3–5 years, and substantial changes are only possible by changing the contracts. dynamic, flexible choices 5. Each mode of market entry has advantages and disadvantages. production and shipping costs. C) licensing contract covers more aspects of operations. Let's take a look these. In addition to exporting, companies can choose to pursue more specialized modes of entry—namely, contracutal modes or investment modes. How does LEGO generate royalties by using contractual entry strategies? In answering this question you should understand the role of royalties within an organization. Switching costs: A. Contractual Entry Strategies in International Business. market size. The strategic importance of an international business operations lie in that a firm can maintain more control over international business and enhance experiential knowledge, critical for further overseas. Going Global • 8 minutes. These. Everybody deserves the benefit of the doubt, but it’s important to establish that the party is indeed legally able to enter a contractual relationship. 1 (€ 133) billion toy industry. Contractual entry strategy _____ in international business refer(s) to a cross-border exchange in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. As discussed in the preceding chapter, entry mode choice is seen as “a critical component” in the process of internationalization (Morschett et al. Praise for Entry Strategies for International Markets, Revised and Expanded To a generation of students and readers, Franklin Root has been known as the leading authority on the international entry strategies of companies. 3. In doing so, they would be switching from a contractual to an ownership-based entry strategy. Through a distribution contract, the foreign investor makes real its planned market entry strategy in order to achieve its goals. These same reasons make exporting a good strategy for small and midsize companies that can’t or won’t make significant financial investment in the international. We reviewed their content and use your feedback to keep the. doc from ADMN 05 at The Islamic University of Gaza. Jeannet and Hennessy (2001) use control, asset level, variable costs. One of the advantages of direct exporting for company include more control over the export process. 2. Low cost of entry into an international market. The institutional distance between home and host countries influences the benefits and costs of entry into markets where a firm intends to conduct business. Skill: Concept Objective: 15-1: Explain contractual entry strategies AACSB: Application of Knowledge 3) A cross-border contractual relationship, which is governed by an explicit contract, provides the focal firm with _____ over the foreign partner. However, if a. firm can pursue individually or in conjunction with other entry strategies 4. , 75 percent) joint venture is a contractual entry mode strategyContractual entry strategies in international business are cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed. B) They are more susceptible to volatility and risk compared to FDI. The contract also controls the money transfers. Intellectual property describes. Royalties are responsible for protecting the owner of patents and they are usually abided by agreement that give others space to use property (Bonadio, 2015). Study with Quizlet and memorize flashcards containing terms like What entry strategy gives a firm the right to manufacture another firm's product or use its trademark for a royalty fee?, What form of business ownership is a contractual agreement whereby someone with a good idea for a business sells others the rights to use the business name and sell a. It also depends on the presence of local and international competition, on regulation. Contractual entry strategies in international business are cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. GSPs are ambitious, reciprocal, cross-border alliances that may involve business partners in a. 3, there are trade-offs in the selection of the method of entry to another country. A) franchise contract is more specific and usually longer in duration. Contract Manufacturing Examples. , wireless telecommunications). That means, entry mode strategies are often massive, irreversible, and can influence the performance of the firm in the long run. Barkema, Bell and Pennings (1996) suggest that low commitment entry strategies may be preferred to. This partnership can occur between businesses, non-profit organizations, or government entities. The quality of its production, the ability to adapt to the preferences of buyers and a meticulous licensing strategy are the main factors that have led to the firm's remarkable success in the U. MASTER’S THESIS Arcada Degree Programme: International Business Management Identification number:With contract manufacturing as a strategy of foreign market entry, it is likely that the manufacturer will take over the entire process of producing the goods, especially if it is rather easy and coherent, as for example the German skin-care products company Beiersdorf, which transfers production of its Nivea cream for the Philippinean market. Which of the following market entry strategies is considered the least risky? Exporting. Keywords: Internalization, Market entry modes, Export, Wholly owned subsidiaries, Joint venture, Contractual modes 1. GLOBAL MARKET ENTRY STRATEGIES 2 LEGO Global Market Entry Strategies 1. 2. Includes such knowledge-based assets of the firm or individuals as industrial designs, trade secrets, inventions, works of art, literature, and other "creations of the mind". There is a group of scholars and. In his definition, the contractual entry modes include a variety of arrangements such as licensing and franchising. The company contracts a firm in the foreign market to assemble or manufacture the products but they still have the responsibility for marketing and distribution of the products according to Root (1994:113); Albaum & Duerr (2008:380). The. Study with Quizlet and memorize flashcards containing terms like 1. London: Kogan Page. Market entry strategies are the methods and channels that a company uses to enter a new market. 1 Explain the difference between adaption and standardisation in international marketing. The general question that will be answered in. Under contract manufacturing, a company arranges to have its products manufactured by an independent local company on a contractual basis. Zhao et al. The above. They are governed by a contract that provides the focal firm with moderate level of control over the foreign partner They typically include the exchange of intangibles and services Firms can pursue them independently or in conjunction with other entry strategies They provide dynamic, flexible choice They often reduce local perceptions of the. In a contract manufacturing business model, the hiring firm approaches the contract manufacturer with a design or formula. three main reasons why companies export-expand total sales when domestic markets become saturated. Entry mode choice is a critical ingredient of international entry strategies, and has been voluminously examined in the field. 3. Answered by PrivateWombatMaster624. Exporting The most commonly used entry strategy that is both profitable and of low risk is based on the sale of product directly in the focused market with no. 18. Firstly, it makes the entire process of creating a contract much faster, allowing teams to get contracts sent out to prospects quickly. Clear direction: Market entry strategies require market research about exporting guidelines, foreign tariffs, and more. Cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an. make it easy for later entrants to win business. Besides, licensing is often adopted in view of environmental factors, such as country entry barriers, to curb product piracy and counterfeiting, and for expanding into countries where the market size is not large enough to justify higher investments. Companies need to have a strategy to enter world markets. Generalizes on the best strategy to enter the market, e. Contractual Modes of Market Entry. Contractual entry modes are distinguished from export modes because they are primarily vehicles for the transfer of. Learn. Zhao et al. The future of business unit depends on this decision whether it will survive or not. Here are some other examples of contract manufacturing in a few different industries:10. It is a form of outsourcing. Licensing 2. Indirect and Direct Export. Buying more time to build a reputation. Entering International Markets Entering foreign markets requires an analysis that examines each of the five major global entry strategies and their associated risks and rewards. Driscoll (1995) identified three modes to enter a foreign market: Export entry modes, Contractual entry modes, Investments modes. Process. Trademark. Semester 2, 2017/18 ATW 395/3 International Business Learning Objectives. Foreign direct investment (FDI) D. Becoming a “habitual” supplier of products and services to loyal customers. intellectual property. Marketing91. Contractual entry strategies in international business are cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. Which statement about cross-border contractual relationships is FALSE?. chapter 12 IBM 300. Posted on 03/06/2021 by admin. The contract also controls the money transfers. While extant research revolves around the level of resource commitment and control in foreign activities, non-traditional. Study with Quizlet and memorize flashcards containing terms like ________ is defined as a contractual arrangement whereby one company makes a legally protected asset available to another company in exchange for some form of compensation. 3. directly tied to jobs. Firms can pursue them independently or in conjunction with other entry strategies. Step-By-Step Solution. Export Entry Contractual Entry Investment Entry Indirect Direct Export Houses Agents Commission Agent Exporters Agent Abroad-Assembly-Contract Manufacturing-Licensing. Licensing and franchising are examples of transfer-related market entry strategies. Franchising reduces costs and risks, avoids political and economic restrictions, and allows for quicker expansion. Firstly, it needs to determine the goals of the joint venture and align them with the strategic objectives of all the participating entities. Question: This problem has been solved!Modes of Global Market Entry MOR 492: Global Strategy Global Entry Mode OVERVIEW: ENTRY STRATEGIES Logic of. 6. Pros and cons of different market entry modes – a study of Finnish companies entering the South Korean market Anna Långbacka Master’s Thesis International Business Management 2018 . Study with Quizlet and memorize flashcards containing terms like Low-control Strategies (Exporting and Counter-trade & Global Sourcing), Moderate-Control Strategies (Licensing, Franchising and other Contractual Strategies, Project Based (non-equity) collaborative ventures), High-Control Strategies (Minority-owned and Majority owned equity joint. This research process involves legal counsel and international distributors. Provides access to new markets. none of the aboveContractual entry modes include licensing, turnkey construction contracts, and management contracts. Intellectual Property. According to Buckley et al. A contract management lifecycle has three key focuses — creation, negotiation, and. 3 Describe the advantages and disadvantages of licensing. This study conducted a meta-analysis to quantitatively. contract-enforcing mechanisms (Khanna et al. Course. decide on the target product/market. Exporting. Each mode of market entry has advantages and disadvantages. Chigrin shares a five-step approach to creating a winning market entry strategy to expand into a new market. 3. Exit strategy. Starbucks doesn’t cultivate coffee and has no plantations in which they grow, harvest and cure coffee beans. Contract management refers to the process of creating, negotiating, assessing, and monitoring a contract’s performance to ensure that both parties fulfill their obligations. There are many different ways to enter a market, and the most appropriate method depends on the. Contractual Entry Strategies in International Business. How does LEGO generate royalties by using contractual entry strategies? In answering this question you should understand the role of royalties within an organization. Study with Quizlet and memorize flashcards containing terms like Starbucks' relentless pursuit of global market opportunities illustrates the fact that most firms face a broad range of strategy alternatives. Contractual Modes of Market Entry. Definition. 6) Mutual Recognition Agreements. [TITLE] 5 Source: International Business by Rakesh Mohan Joshi (Pg No. Customers pay the amount as they view its items as great value (Ivarsson & Möller, 2017). Contractual entry strategies 2. The specific definition of the license. The book connects to students of the technological age, facing a diverse and evolving economic environment fueled by. b) Market research: Data collection and profound survey to understand industry, rivals, and perspectives. . 3. View Test prep - 8793_MAN3600_Test_4 from MAN 3600 at Florida State University. Contr actual Entry Str a tegies Licensing: arr angemen t in which the owner of int ellectual pr operty gr ants a firm the right to use that pr operty f or a specific time period in e xcha nge f or ro yalties or other comp ensation1) A company is able to enter a market that has restrictions on foreign companies. Contractual Entry Strategies. International Business: The New Realities, 5th Edition caters to a post-millennial student audience, the most diverse and educated generation to date. LicensingThe internationalization theory provides a dynamic view of entry mode strategy and recognizes . Wu & Zhao 186 foreign market entry decision framework, which identifies export, contractual and investment as the main foreign market entry modes. Jun 16, 2017. Licensing is an arrangement by which the owner of intellectual property grants another firm the right to use that property for a specific time period in exchange for royalties or other compensation. Intellectual property. There are several market entry strategies and each one has its own advantages. Strategic alliances. His new edition represents the latest word on an evolving and complex subject. All tutors are evaluated by Course Hero as an expert in their subject area. We define franchising as a strategy mainly used by service companies, that allows the franchisee to use a business model, processes or brand name for a fee, to conduct. 1. They typically include the exchange of intangibles (intellectual properties) and services. This systematic literature review. _____ represents a market entry strategy whereby one company permits a foreign company to make use of its patents, know-how, technology, company name, or other intangible assets in return for a royalty payment. , 75 percent) joint venture is a contractual entry mode strategy A solid joint venture entry strategy should encompass several important elements. 6. International. 4. Contractual Entry Modes 2. A company that decides to enter the international market. Can be pursued independently or in conjunction with other entry strategies. A) Cooperative strategies B) Entry strategies C) Options strategies D) Competitive strategies and more. In international business, management contracts offer several advantages. Corporate level strategies. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in int'l business:, Contractual Entry Strategies:, Unique Aspects of Contractual Relationships: -They are governed by a contract that provides the focal firm with a _____ level of control over the foreign partner. Intellectual Property. It's also easier for the company to extricate itself from the situation if the results aren't favorable. Posted on 03/06/2021 by admin. Terms in this set (17) Contractual entry strategies in international business. Advantages and disadvantages of franchising Foundation ConceptsFurthermore, disputes between franchisors and franchisees regarding contract terms, territorial rights, or intellectual property issues can arise and negatively impact the relationship (Cavusgil et al. The decision of entry mode strategy is the most critical decision in international expansion. Abstract. - As entry strategy, licensing requires neither substantial capital investment nor extensive involvement of licensor in foreign markets. Jun 16, 2017. Study with Quizlet and memorize flashcards containing terms like Low-control Strategies (Exporting and Counter-trade & Global Sourcing), Moderate-Control Strategies (Licensing, Franchising and other Contractual Strategies, Project Based (non-equity) collaborative ventures), High-Control Strategies (Minority-owned and Majority owned equity joint venture & Wholly Owned Subsidary (FDI) ) and more. These same reasons make exporting a good strategy for small and midsize companies that can’t or won’t make significant financial investment in the international. The international entry strategy that requires the least investment of resources and has the least risk is _____. 1. (2004) differ between ownership-based entry modes (OBEs) and contract based modes (CBMs). c. Decisions are generally decentralized. Intellectual property. 2 The Entry Mode In this paper, we use the Uppsala model (Johanson & Wiedersheim-Paul 1975). Kogut and Zander ~ í99 ï give the addition to these two FDI strategies: the transaction market entry of licensing. Q: In 2008 Time Warner, Inc. For example, a contract with an agent can usually be dissolved quite quickly. It’s a low-cost, low-risk option compared to the other strategies. This chapter examines the management contract and the key components that shape its success as an entry mode. The leading toymaker that is sure in the building block toy market with a market share of eighty five percent globally. Step 3: Studying investment viability. 5. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business are cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. The contractual arrangements ( CA ) mode of entry is in most cases a stepping stone to international production. Markman et al. B) fails to specify the amount that will be spent on the purchase. In the months and years before expanding, laying out the groundwork can help companies identify a clear direction and achieve success. There are five basic options available: (1) exporting, (2) creating a wholly owned subsidiary, (3) franchising, (4) licensing, and (5) creating a joint venture or strategic alliance (Figure 7. [2] defined market entry as "a planned move into a new or adjacent market for the creation and delivery of offerings. Doing Business in Emerging Markets: Entry and Negotiation Strategies Milind R Agarwal , Pervez Ghauri , Tamer Cavusgil There are many texts available on International Business, but only a few provide a. Abstract and Figures. Contract Manufacturing Contract manufacturing obviates the need for plant investment, transportation costs and custom tariffs and the firm gets the advantage of advertising its product as locally made. licensing, and contract manufacturing. 6. Market entry strategies involve market entry. Advantages and disadvantages of licensing 4. Ch09. • Entry strategy for a single target country in which the partners share ownership of a newly-created business entity . The advantages and disadvantages of the market entry strategy are as follows: Advantages. This theory considers both location and ownership . Strategic factors in selecting an entry mode: cultural environment. c. A. ). In addition to the standard license process, a company will assist in establishing the business with the design, equipment, organization, and marketing. Licensing. These variables are: The amount of risk; The degree of control and ownership- they are governed by a contract that provides the focal firm a moderate level of control over the foreign partner - they typically include the exchange of intangibles (intellectual property) and services - firms can pursue them independently or in conjunction with other foreign market entry strategies - they provide a dynamic, flexible choiceBefore undertaking contractual entry strategies abroad, management ____. This assignment on market entry strategies. ideas or works created by individuals or firms, including discoveries and inventions; artistic, musical, and literary works; and words. Using a central platform to manage the entire process and analyze data can improve contract workflows. Organization will make in the light cost, risk and the. Louis Vuitton company incorporates pricing based on value into its mix of product marketing. , contract based entry strategies are a _____ mode. 2. A deliberate and well-planned Modular Contracting strategy can provide SWP programs with flexible. Question: Question 26 Exporting and forvion direct Investment are the two most frequently employed contractual entry strategies Select one True False 27 in his International Product Life Cycle (PLC) Theory, Raymond Vernon observed that each product and its manufacturing technologies go through the stages of evolution: Introduction, maturity,. Firms need to evaluate their options to choose the entry mode that best suits their strategy and goals. In addition, firms employ other contract-based approaches to venture abroad. Define and distinguish the following contractual entry strategies: turnkey projects, build-operate-transfer, management contracts, and leasing. D) fails to make a hard-currency purchase of any product from that nation in the future. Introduction to International Business Venturing Abroad • 1 minute. 4 Conclusion. , 2) Exporting and foreign direct investing are two common types of contractual entry. Transport costs, trade barriers, political risks, economic risks, costs and firm strategy. View Test Prep - licensing and franchising from ECONOMICS 12 at Xavier Institute Of Management & Research. Retrieved March 24, 2022, from marketing91/contract-. #3 Choose a market entry strategy. -Choose going in alone or collaboration. 26 terms. As shown in Figure 9. + little or no investment required,. Previous question Next question. Terms in this set (38). The results of your market research will also help you decide on a market entry strategy. 1. International Marketing (OCEAN591) 19 Documents. This research process involves legal counsel and international distributors. For Shen et al. Strategy planning, market entry and implementation (3rd ed. Market entry strategies refer to a company’s goals, plans and decisions in regard to which market to enter, when to enter and how to enter (taking into account opportunities, threats and customer needs). B. 1. Different entry modes differ in three crucial aspects: The degree of risk they present. However, the focus in this chapter is on M&A as a market entry or expansion mode, because cross-border. In this section, we will explore the traditional international-expansion entry modes. 4 Understand franchising as an entry strategy. What is a contractual entry mode? Contract Manufacturing: – This entry mode is a cross between licensing and investment entry. Contractual entry modes are defined as long-term non-equity associations between an international company and an entity in a foreign target country that involve the transfer of technology or human skills from the former to the latter (Root, 1994, p. an entry strategy requires decision on (1) the choice of a target product/market, (2) the objectives and . e. Contract manufacturing also enables the firm to avoid labour and other problems that may arise from its lack of familiarity with the local. , visiting the country; importance of relationships to finding a good partner; use of agents. 1 (EUR one33. 2. 15. More recently, Brouthers and Hennart (2007. Other benefits include political connections and distribution channel access. In the long term, every modern business wants to expand its reach to international markets, which would eventually spike its profit and growth. In this section, we will explore the traditional international-expansion entry modes. tax benefits, subsidies, etc. 5. . Currency rate used The current exchange rate used in this thesis for the U. Contract Law: Franchising regulations or Company Law as the case may be. SOURCE : Root, Foreign Market Entry Strategies, p. Contract manufacturing B. 1 Explain contractual entry strategies. Production quality, adaptation to buyer preferences and a careful licensing strategy are the key driver's of the company's spectacular success in the US $ 151. View Sample Solution. Learn from your partner (and apply that knowledge within your organization) Study Chapter 5: Entry into Foreign Markets flashcards. Low cost of entry into an international market. 4 billion. Reduces political risk as in most cases, the licensing or franchising partner is a local business entity. If well implemented, these strategies will help a construction project be successful and experience fewer contractual disputes. Access International Business: The New Realities [RENTAL EDITION] 5th Edition Chapter 15 solutions now. International Business: The New Realities, 4e (Cavusgil) Chapter 15 Licensing, Franchising, and Other Contractual Strategies _____ is a fee paid periodically to compensate a licensor for the temporary use of its intellectual property, often based on a percentage of gross sales generated from the use of the licensed asset. Terms in this set (17) Contractual entry strategies in international business. The choice of entry mode is an important strategic decision for SMEs as it involves committing resources in different target markets with different levels of risk, control, and profit return. 38 terms. This loss occurred predominantly because Time Warner took a charge for asset impairments of $24,309 million, ($24. Less control, licensee may become a competitor, legal and regulatory environment (IP and contract law) must be sound: Partnering and Strategic Alliance: Shared costs reduce investment needed, reduced risk, seen as local entity:. A) a monetary down-payment plus royalties for all products sold locally B) a combination of intellectual property and technical information and assistance l a storefront or facility and the necessary materials to make the product D) a combination of a lump-sum payment and the intellectual know-how 37) wh 38) In a licensing agreement, the. Relevant market entry strategies, such as franchising, contract manufacturing, joint ventures, and others are explained and categorized in light of crucial determinants of international business decision making: hierarchical control of operations, the firm’s proximity to the foreign market, the investment risk, and the factor of time. 15. Intellectual property. Motives for FDI-Market-seeking motives-Resource or asset-seeking motives-Efficiency-seeking motives. The subject of market entry strategies is a much-researched but still contemporary one. Turnkey projects could be considered especially with significant customers and as a specific type of project marketing as actors through the network of. ENTRY STRATEGIES. Chapter 16 Licensing, Franchising, and Other Contractual Strategies Learning Objectives: 1. Secondly, the automation process empowers commercial teams to self-serve on contracts, rather than waiting on. There are several market entry methods that can be used. Which of the following is a contractual entry mode? A) joint venture B) wholly owned subsidiaries C) licensing D) exporting. Contractual entry strategies in international business. B) franchise contract must include a foreign government. firm that handles all aspects of export operations under a contractual agreement. a majority-owned (e. acquisitions), contractual entry modes (e. Contract manufacturing and franchising are two specialized . 1 China Greenfield Investment Strategy. This loss occurred predominantly because Time Warner took a charge for asset impairments of $24,309 million, ($24. 2. B) improve a product's performance and marketability 3. 1. 1. They typically include the exchange of intangibles and services. Registration: Not necessary: Mandatory: Training and support: Not provided: Provided:. How does LEGO generate royalties by using contractual entry strategies? LEGO is the leading toy manufacture within the building-block toy industry with 85% market share globally. 2 ABSTRACT Presently, companies wanting to engage in international trade have a wide pool of choices to choose from. decide on the mode of. ability to preempt rivals and capture demand by establishing a strong brand name. The analysis shows that equity-based entry modes prevail over contractual agreements among Chinese hotel chains covered by our sample. Types of Contractual Relationships Licensing An arrangement in which the owner of intellectual. Typically include the exchange of intangibles and services. - negotiate a formal agreement. The impact of strategy considerations can most easily be illustrated in a Cournot duopoly setting as displayed in Fig. Definition. This is an example of _____. Workflow efficiency strategies for automating your contract workflow. Contractual modes involve the use of contracts rather than investment. political and legal environments. Direct exporters often sell directly to a consumer (B2C), a business (B2B), or a distributor in a foreign country. Franchising. Table 8. that foreign market entry strategies usually accord with the sequential stages of Exporting, Competitive alliances, Acquisition /foreign direct investment. MKT 305-100- International Market Entry Strategies. Partnering. 2 Franchising. g. Contract Manufacturing: Definition, Meaning, Advantages, Examples. Cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. Joint ventures are the most preferred market entry strategy after wholly owned subsidiaries. - Arrangement where owner of intellectual property grants another firm right to use property for specific time in exchange for royalties or other compensation. Resource commitment in an emerging market is examined in terms of the degree of control of the entry strategy employed.