What are the market entry strategy options available to a company seeking to enter the global marketplace? How do they relate to each other in terms of profit potential, risk, financial commitment required, and marketing control?

Once a company has decided to enter the global marketplace, it may select one of four strategies: (1) exporting, which involves producing goods in one country and selling them in another country; (2) licensing, where a company offers the right to a trademark, patent, trade secret, or other similarly valued items of intellectual property in return for a royalty or a fee; (3) joint venture, which involves a foreign company and a local firm investing together to create a local business; and (4) direct investment, which entails a domestic firm actually investing in and owning a foreign subsidiary or division. The amount of financial commitment, risk, marketing control, and profit potential increases as the firm moves from exporting to direct investment. See Figure 7-4.