wernerhosea
Lurido Mortale
Registrato: 15/06/19 03:51
Messaggi: 7
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Every method is discussed in turn with risk and return characteristics. International trade is a traditional approach which you can use by firms to permeate markets by exporting and also importing goods. This approach causes minimal risk because firms do not place large amount of the capital at risk. If the firm encounters a decline in its exporting it could possibly normally decrease or discontinue this section of its business at affordable.
Licensing is a popular method for National Companies to exploit international business without buying sizable funds. It requires companies to produce their technology (copyrights, patents, trademarks, or trade names) in exchange for fees or another particular benefits.
Licensing enables them to use their technology in foreign markets without getting a major investment in foreign countries and minus the transportation costs that result from exporting. As local producer can be found domestically it allows reducing political risks.
A major disadvantage of licensing is the fact that it is difficult intended for company providing the technology to confirm quality control in the actual foreign production process. Some other disadvantages include: are lower licensee fees than FDI income, high agency cost, risk that technology will always be stolen, loss of possibility to enter licensee`s market together with FDI later.
A joint venture pertains to a foreign ownership which is jointly owned. Companies penetrate foreign markets by engaging in a joint venture along with firms that reside within those markets. A business unit that is certainly owned less than Fifty percent is called a currency affiliate and joint venture falls into this kind. Joint Venture with a foreign company efficient method if National Company finds a right companion. |
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