Final answer:
Exporting, licensing, and direct investing are known as market entry strategies, facilitating the selling of products and services in foreign markets. They range from lower-risk exporting to higher-commitment foreign direct investment, where managerial control is assumed in the target country.
Step-by-step explanation:
Exporting, licensing, and direct investing are called market entry strategies because they represent alternative ways for companies to sell products and services in foreign markets. Each of these strategies varies in the degree of risk they present, the investment required, and the level of involvement in foreign operations. For instance, exporting is the process of selling goods or services produced in one country to another country, which can be a lower-risk way to enter new markets without significant direct investment.
Licensing involves granting a foreign company the right to produce and sell goods using the licensor's brand, technology, or product specifications. In contrast, foreign direct investment (FDI) typically involves establishing or acquiring a business in the foreign country, thus assuming more managerial responsibility and a long-run focus. For example, buying or selling a company that manufactures automobile parts abroad would be considered a direct investment and generally takes longer to execute compared to portfolio investments like stocks or bonds.