GMS 522 Chapter Notes - Chapter 8: Franchising, Foreign Direct Investment

• School: Ryerson University
• Department: Global Management Studies
• Course: GMS 522
• Professor: Fatemeh Firouzi

Document Summary

Entry mode the institutional arrangements firms employ to enter foreign markets. The mode of entry decision is determined by the internationalization objectives of the firm. Intermediaries may provide the firm with market intelligence and have typically established customer relationships in the target countries of interest to the firm. Paid in commission: export management company (emc) may provide the firm with a more comprehensive option for penetrating export markets, emcs are domestic firms which act on behalf of a number of non- competing exporters. Indirect systems franchisor transacts with a master franchisee in coordination and control of individual franchisees in its territory. Entry modes are defined as institutional arrangements used by firms to penetrate international markets. These are usually classified as being of three types export modes, intermediate modes and hierarchical modes. With direct exporting the firm transacts directly with an intermediary in the foreign country whereas with indirect exporting the firm deals with an intermediary in its own home country.