Ways of reaching foreign markets
•licensing or franchising, where a local organisation makes the products to designs supplied by a foreign company; depending on circumstances, the foreign company might specify a range of procedures for operations, quality, tests, suppliers, and so on
•exporting finished goods and using local distributors to market them; the main risk here comes from increasing production to satisfy a demand that depends on the marketing company
•setting up a local distribution network; products are still exported to meet demand but the foreign company increases control of the supply chain by replacing the local marketing company by an owned subsidiary
•exporting parts and using local assembly and finishing; this needs facilities in the home market, but these can start very small, as seen in ‘postponement’
•full local production with new manufacturing facilities either built specially or taken over from an existing company. This gives access to local knowledge and is often the only way of getting a presence in a controlled market.
•joint venture with a local company; more substantial facilities can be opened through a partnership, allowing shared ownership, management skills, knowledge and risk.