Condition to use




High target market, product cost, high political risk, low home-country currency

Relatively low financial exposure, permit gradual, market entry Acquire knowledge about local market

Vulnerability to tariffs logistical complexities potential conflicts with distributors


Licensing licks ability to become a competitor, low sales, potential in targeted market

Lower cost and risk licensee provides knowledge of local market

No tight control, risk for losing know-how


Contractual agreement

Low financial risk, low cost way to assess market potential, maintain more control than with licensing

Limits market opportunity, dependence on franchisee, potential conflicts with franchisee


High sales potential low political risk.

Greater knowledge of local market, Can better apply specialized skills

Higher risk than other modes

requires more resources and commitments may be difficult to manage the local resources

Joint ventures

High sales potential local company can provide recourses and skills

Benefit from local partner Share cost and risk, Political considerations

Loss control of technology, no tight control of partner, Conflicts and battles