Question

What are the modes and methods of international business expansion?

Answer 1

Five modes or methods of business expansion into another location or even cross borders would be:

LICENSING
Licensing allows us the ability to utilize our offering in a way that will enable us benefits from it in the form of licensing fee or royalty can enable us to an option to expand into the market, test our product and the customer base in the area, without considerable upfront investment.

EXPORTING
Exporting is the easiest direct involvement of a company in the target market. We can necessarily tie up with third-party logistics to get our products into the target market at a minimal cost of operation or investment.

ACQUISITION
Acquiring a business already operating in the market would allow simplicity of structure, presence in the market as well as a functional supply chain which we can use to our advantage.

MERGER/PARTNERSHIP/STRATEGIC ALLIANCE
If we are not sure about the capabilities of the market or it has the presence of excess competition, we can improve our odds by forming an alliance or strategic partnership and merging with a business already present in the market to help solidify our footing in the market.

GREENFIELD INVESTMENT
For a large company, with a significant investment and budget, being able to add functionality by allowing better structure and functions that the company already makes use of can allow them the advantage they need in the market. A company can essentially create their princesses from scratch, build their structures and design, allowing them a better standing in the market in terms of future potential and sustainable growth.

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