Modes of entry in

International Business

By:- Anay Jain

Yash Bhatt
Sushmita
International Business
• International Business comprises all commercial transactions (private
and governmental, sales, investments and transportation) that take
place between two or more regions and countries beyond political
boundaries.
Export - Import
• Exporting is a cross border sale of domestically grown or produced
goods
• Types of Exporting – direct, indirect and cooperative
For eg:- Rice, Coal, Spices, etc.
• An import is a good or service brought into one country from
another.
For eg:- Crude oil, Milk, Technology
Subcontracting

• The process of entering a contractual agreement within outside company to

perform a certain amount of work.

For eg:- Building construction, ( General contractor takes prime responsibility

for seeing that building is constructed and signs to do so )
Countertrade
• Countertrade is a reciprocal form of international trade in which
goods or services are exchanged for other goods or services rather
than for hard currency.
• Countertrade can be classified into three broad categories:
barter, counterpurchase, and offset.

For eg:-1) Exchange offers, Buy Back, etc

2) Indo-Iraq Wheat and rice for oil deal
Licensing
• A licensing agreement is a written agreement by which the owner of a
property gives another party permission to use that property under
specified parameters.
For eg:- Microsoft Office, Quickheal Antivirus, Tally ERP, etc
Franchising
• Definition: A continuing relationship in which a franchisor provides a
licensed privilege to the franchisee to do business and offers
assistance in organizing, training, merchandising, marketing and
managing in return for a monetary consideration. Franchising is a
form of business by which the owner (franchisor) of a product, service
or method obtains distribution through affiliated dealers
(franchisees).

For eg:- Dominos, Pizza Hut, Dunkin Donuts, etc

Wholly owned Subsidiary

• A wholly owned subsidiary is a company whose common stock is

100% owned by another company, the parent company.
For eg:- American Airlines is wholly owned subsidiary of AMR Corp.,
etc
Joint Venture
• A joint venture (JV) is a business arrangement in which two or more
parties agree to pool their resources for the purpose of accomplishing
a specific task.
For eg:- Google and NASA developing Google Earth , VISTARA – Tata
Sons and Singapore Airlines.
Contract Manufacturing
• Contract manufacturing is the outsourcing of part of the
manufacturing process of a product to a third-party. More specifically,
contract manufacturing is an outsourcing of certain production
activities that were previously performed by the manufacturer to a
third-party.
For eg:- Pharma industry, Defence industry, etc.
Management Contract

• Agreement between investors or owners of a project, and a management company hired for coordinating
and overseeing a contract.

For eg:- Heathrow Airport Holdings Ltd. Of Britain operates the Indianapolis Airport under10 year management c
And provides retail management at the air mall in Pittusburgh Airport.
Mergers and Acquisition
• Mergers – When 2 or more companies combines into 1 company,
also called Amalgation.
For eg:- Tata oil mills Ltd. With Hindustan Liver Ltd.
• Acquisition – When one company takes over another and clearly
established itself as the new owner, the purchase is called
acquisition.
For eg:- Godrej Consumer Care bought Keyline Brands,
Dabur acquired Balsara.
Thank You