Foreign markets are any markets that are outside of a company’s own country. The channels firms use to enter a foreign market are; joint ventures, exporting, franchising, licensing, and direct foreign investment. In a joint venture, two companies establish a joint own business and provide business with a management team by sharing the joint venture’s control. Exporting is whereby a firm does direct selling of goods or services with another country. This is the best method for entering a foreign market since it is cost-efficient. In franchising, property rights are sold to a franchisee, and strict rules are used to carry out the business.
In the licensing mode of entry, another company in your selected country can use your intangible property, for instance, production techniques or patents. There is a payment of fee so that the licensee is guaranteed the right to use the property. Any marketing and manufacturing costs are taken in the foreign market is taken care of by the licensee. In foreign direct investment, a company invests directly in a foreign market, which is done by starting a new venture or obtaining an existing company.
Reference
Buckley, P. J., & Casson, M. C. (1998). Analyzing foreign market entry strategies: Extending the internalization approach. Journal of international business studies, 29(3), 539-561.