Forms of going international
Going international fall within three categories:
It is the most commonly used entry mode for SMEs. It has many sub-modes that can be classified within indirect exporting and direct exporting.
• Contractual entry modes
Contractual entry modes are 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.
It can be distinguished from export entry modes because they are the primary vehicles for the transfer of knowledge and skills although they may also create export opportunities.
It has many sub-modes that can be classifies as franchising, licensing, strategic alliances and other entry modes (turnkey contracts, sub-contracting and different management contracts).
• Investment entry modes
Involve ownership by an international company of manufacturing plants or other production units in the target country. In terms of ownership and control, foreign production affiliates may be classified as sole ventures with full ownership and control by the parent company, or as a joint venture with ownership and control being shared between a parent company and one or more local partners which usually represent the local company.
Detailed Information for the different forms: