Final answer:
Exporting, licensing, and direct investing are known as market entry strategies, essential for businesses to sell products and services globally. They involve different levels of investment, managerial control, and commitment. The correct option is e. market entry.
Step-by-step explanation:
Exporting, licensing, and direct investing are called market entry strategies because they represent alternative ways to sell products and services in foreign markets. These strategies are fundamental aspects of international business and are vital in the globalization of companies.
Exporting involves selling domestically produced goods and services to foreign markets, while licensing allows a company to grant rights to another company to produce its product, use its trademark, or use its proprietary technology in a foreign market. Direct investing is more involved and includes tactics such as establishing a subsidiary in a foreign country, buying a stake in a foreign company, or engaging in a joint venture. These strategies not only demonstrate how companies can become global, but they also reflect the myriad ways through which they can leverage local advantages while participating in the global marketplace.
Among these options, foreign direct investment (FDI) is significant due to its long-term commitment and potential for managerial influence in foreign operations. Unlike portfolio investments, which can be withdrawn with relative ease, FDI requires a more substantial investment and typically involves a more significant managerial role, leading to longer-term plans and strategies. It also implies a particular interest in the supply and demand of currencies, as transactions are often international and therefore involve currency exchanges.
The phenomena of globalization and market concentration have led to the growth of cross-national economic interdependencies, changing the way global economies and companies develop. Companies use market entry strategies to expand into global markets and maintain balance and stability in the international trade landscape. This, in turn, has implications for local economies and the global distribution of labor, resources, and capital.
In summary, the correct option is e. market entry.