There are various ways of entering into international business. They are:
1. Exporting and Importing: Exporting means selling or sending goods and services form the home county to foreign country. Importing means purchasing goods and services from a foreign country or bringing them to the home county.
2. Contract Manufacturing: Contract manufacturing is a mode of entry into ‘ international business under which a business firm in a country enters into a contract with local manufacturer in the foreign country to get certain goods produced or services rendered as per its specification! However, the firm retains with itself the responsibility of marketing the goods.
3. Licensing and Franchising: Licensing is a contract arrangement in which a firm in a country allows a firm in a foreign country to use its patent or trademarks or technology for a consideration known as royalty. Franchising is very much similar to licensing. The patent company which gives the franchise for a fed is called the franchiser, and the other company is called the franchisee.
Franchising covers the business of restaurant, hotel, travel agency, wholesale trade, retail trade, etc.
1. Joint venture: Joint venture is a business jointly owned by two or more firms located in two different countries.
2. Wholly-owned Subsidiary: A wholly-owned subsidiary is subsidiary company which is owned by a parent company or holding company. In other words, a wholly-owned subsidiary is a subsidiary company in whose equity capital, 100% investment is made by the parent or holding company.
