Foreign market entry modes

In international trade, foreign market entry modes are the ways in which a company can expand its services into a non-domestic market.

There are two major types of market entry modes: equity and non-equity. The non-equity modes category includes export and contractual agreements. The equity modes category includes joint ventures and wholly owned subsidiaries. Different entry modes differ in three crucial aspects:

  • The degree of risk they present.
  • The control and commitment of resources they require.
  • The return on investment they promise.
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