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Market Entry Modes

In: International Management

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  • Manfred Fuchs

    (University of Graz)

Abstract

Market entry modes are divided into functional market entry modes, which are prepared and conducted mainly from the home country location, and institutional market entry modes, which are accomplished and operated in the host country locations. The success of functional market entry forms is highly dependent on the commitment of a sales agent, intermediaries, licensees, or franchisees. Although the proposed dependency is not one-sided, a significant effect on the market success rests on the capabilities and efforts required by local partners. In all functional market entry mode strategies, the leverage of control is limited. Thus, functional or institutional market entry strategies will be adopted to fit different needs and capabilities for controlling international business activities. The operative control can be carried out by relying on exports, licensing, franchising, and by establishing an international joint venture, or a wholly-owned subsidiary. Generally, market entry modes are portrayed as market entry strategies, although this definition can be confusing because the choice of market entry strategy is more than an elaborated long-term objective, but also a means of how to operate a particular business activity in co-evolving foreign markets.

Suggested Citation

  • Manfred Fuchs, 2022. "Market Entry Modes," Springer Books, in: International Management, chapter 5, pages 179-230, Springer.
  • Handle: RePEc:spr:sprchp:978-3-662-65870-3_5
    DOI: 10.1007/978-3-662-65870-3_5
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