Business Knowledge

Global Market Entry: Applied Frameworks

Going Global: Which Entry Mode is Right for You?

Expanding internationally is a big decision. Here’s how to pick your path.

1. Exporting (Shipping from home)

  • Pros: Low risk, low cost.
  • Cons: Little control, trade barriers.
  • When to use: [ ] First test of a market, simple products.

2. Licensing / Franchising (Let others use your brand/IP)

  • Pros: Low financial risk, fast entry, leverages local knowledge.
  • Cons: Loss of control, potential for IP theft.
  • When to use: [ ] Strong brand/IP, restricted direct investment.

3. Joint Ventures (Partner with a local company)

  • Pros: Share costs/risks, access local expertise/networks.
  • Cons: Potential partner conflict, sharing profits.
  • When to use: [ ] High-risk markets, critical local knowledge needed.

4. Foreign Direct Investment (FDI) (Buy or build your own operation)

  • Pros: Full control, highest profit potential, protect IP.
  • Cons: Highest risk, highest cost, complex management.
  • When to use: [ ] Significant resources, strong desire for control, proprietary tech.

Factors to Consider:

  • Market Size & Growth: How attractive is the new market?
  • Political/Economic Risk: How stable is the country?
  • Cultural Distance: How different is it from home?
  • Your Resources: How much money and expertise can you commit?

Golden Rule: Start with lower commitment options to test the waters, unless there’s a compelling strategic reason for high commitment.