International Market Entry Strategies

From the study guide

International Business Management: Entry Modes into Foreign Markets — Revision Sheet

1. 📌 Essentials

  • Export: Selling goods/services abroad; main entry mode.
  • Direct export: Producer sells to foreign buyer; full control.
  • Indirect export: Uses intermediaries; lower risk, less control.
  • Organizational structures: Dependents (departments, subsidiaries) vs. Independents (distributors, agents).
  • présentative office: Non-trading, prospecting, informational role.
  • Commercial office: Operational support, logistics, sales.
  • Branch: Part of parent company, no legal personality.
  • Subsidiary: Independent legal entity, fully controlled.
  • Storage abroad: Ensures supply, often in free zones.
  • Legal liability: Branch liable as part of parent; subsidiary responsible for its obligations.

2. 🧩 Key Structures & Components

  • Export Department — manages export activities within the company.
  • Distributors — buy and resell products, assume legal risk.
  • Agents — represent producer, earn commissions, no stock.
  • Représentative Office — non-trading, prospecting, info-gathering.
  • Commercial Office — supports logistics, sales, after-sales.
  • Branch — operational extension, no separate legal entity.
  • Subsidiary — autonomous legal entity, majority owned.
  • Storage Facilities — stocks abroad, often in free zones.
  • Free Zones — duty-free zones for storage and logistics.

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Practice quiz preview

1. What is a primary advantage of direct export methods for a company entering a foreign market?

2. Which organizational structure is characterized by being an independent legal entity, fully controlled by the parent company, and capable of importing and selling products abroad?

3. What is the main difference between a branch and a subsidiary in the context of foreign market entry?

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Flashcard preview

Export — definition?

Selling goods abroad directly or indirectly.

Dependents — role?

Manage export activities within company.

Branch vs subsidiary — difference?

Branch has no legal personality; subsidiary is independent.

Export — definition?

Selling goods/services abroad

Direct export — role?

Producer sells directly to foreign buyer

Indirect export — advantage?

Lower risk, less control

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Frequently asked questions

What does the International Market Entry Strategies study guide cover?

It covers the core concepts of International Market Entry Strategies, organized by topic with the key definitions, explanations and takeaways, so it's easier to learn and remember.

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How many questions are in the International Market Entry Strategies quiz?

The practice quiz has 9 multiple-choice questions, each with an explanation. Use it to check what you know and find your gaps.

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