Final answer:
When entering a new market, businesses need to consider various mode of entry options such as exporting, licensing, and joint ventures. The most appropriate mode of entry depends on factors like investment level, product or service nature, and market conditions.
Step-by-step explanation:
When entering a new market, there are several mode of entry considerations that businesses need to take into account:
- Exporting: This involves selling products or services from one country to another. It is a relatively low-risk and low-cost mode of entry, making it suitable for businesses with limited resources.
- Licensing: This involves granting permission to a foreign company to use your intellectual property, such as trademarks, patents, or copyrights. It allows businesses to enter new markets without taking on the risks and costs of production and distribution.
- Joint Ventures: This involves partnering with a local company in the target market to establish a new entity. It allows businesses to leverage the local partner's knowledge, resources, and networks.
Of these mode of entry considerations, the most appropriate one depends on several factors, such as the level of investment, the nature of the product or service, and the market conditions. For example, if a business wants to enter a market with limited resources and limited knowledge of the local market, exporting or licensing would be more appropriate. On the other hand, if the business wants to establish a strong presence in the market and have access to local resources and networks, a joint venture would be more suitable.