What are the various modes of entry for a multinational enterprise (MNC) to expand operations or sales to another country? Why would an MNC select one mode of entry over another?
The stages of organization's evolution is first of all the organization will start exports of the goods and services because it involves low commitment of capital and in turn low risk and return. Export is the legitimate transportation of domestic or nationalized goods and services from a country intended for use or consumption rendered abroad. Exports can be any good that is shipped out of a government's border for commercial purposes.
Overall it involves low commitment of capital and in turn low risk and return. It is low risk, as it does not involve long-term capital investment in foreign location.
Then next step can be of joint venture or franchising/ licensing route. A joint venture (often abbreviated JV, and sometimes known by the older term joint adventure) is a strategic alliance between two or more parties to undertake economic activity together. The parties agree to create a new entity together by both contributing equity, and they then share in the revenues, expenses, and ...
The various modes of entry for a multinational enterprise to expand operations or sales to another company are discussed.