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Starting Global Business Activities: Add Subtitle Here

There are several methods for businesses to get involved in international business ranging from low to high risk. Low risk methods include indirect exporting where a company sells overseas without effort, and direct exporting where a company actively markets overseas. Other low risk options are management contracting, licensing and franchising which allow use of a company's knowledge or brand abroad. Higher risk methods involve joint ownership and include joint ventures between foreign companies, foreign direct investment through purchasing land or companies overseas, and wholly owned foreign subsidiaries.

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164 views5 pages

Starting Global Business Activities: Add Subtitle Here

There are several methods for businesses to get involved in international business ranging from low to high risk. Low risk methods include indirect exporting where a company sells overseas without effort, and direct exporting where a company actively markets overseas. Other low risk options are management contracting, licensing and franchising which allow use of a company's knowledge or brand abroad. Higher risk methods involve joint ownership and include joint ventures between foreign companies, foreign direct investment through purchasing land or companies overseas, and wholly owned foreign subsidiaries.

Uploaded by

salamat lang akin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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STARTING

GLOBAL
BUSINESS
ACTIVITIES
Add subtitle here
METHODS FOR
GETTING INVOLVED IN
INTERNATIONAL
BUSINESS

2
Methods for getting involved in International Business

01 Indirect Exporting
02 Direct Exporting

03 Management
Contracting
04 Licensing
05 Franchising
06 Joint Venture
Foreign Direct
07
Invesment
08
Wholly-Owned
Subsidiary
Low Risk Method for getting involved
in International Business
• INDIRECT EXPORTING At first, a business organization may get involved with international business
by finding a demand for its service or product without really trying. Indirect exporting occurs when a
company sells its products in a foreign market without any special activity for that purpose.
• DIRECT EXPORTING After sales increase and a company decides to get more involved in international
business, the organization will probably create its own exporting department. Direct exporting occurs
when a company actively seeks and conducts exporting.
• MANAGEMENT CONTRACTING Knowledge is a powerful tool in business. An ability to find
business opportunities, coordinate resources, solve problems, and make productive decisions is a skill that
will be in demand throughout your life. The abilities of managers to assist companies in developing
countries are important exports for industrialized countries.
• LICENSING To produce items in other countries without being actively involved, a company can allow a
foreign company to use a procedure it owns. Licensing is selling this right to use some intangible
property (production, process, trademark, or brand name) for a fee or royalty.
• FRANCHISING The right to use a company name or business process in a specific way. Organizations
contract with people in other countries to set up a business that looks and operates like the parent
company. This is also to adapt various business elements.
4
High Risk Method for getting involved
in International Business

• JOINT VENTURE A partnership can provide benefits to all owners. One type of international
partnership is the joint venture, an agreement between two or more companies from different countries to
share business project.
• FOREIGN DIRECT INVESTMENT (FDI) Occurs when a company buys land or other resources in
another country. Real estate and existing companies are common purchases under this method.
• WHOLLY-OWNED SUBSIDIARY Which is an independent company owned by a parent company.
Multinational companies frequently have wholly-owned subsidiaries in various countries that ate the
result of foreign direct investment.

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