Which one of the following modes of entry brings the firm closer to in...
Joint venture means the collaboration of companies . eg. maruti suzuki ,,maruti is indian co. and suzuki is from Japan so with the help of their collaboration maruti sell their product in Japan and suzuki which is from Japan sell their product in india so with the help of joint venture brings the firm closer to international market
Which one of the following modes of entry brings the firm closer to in...
Joint venture:
A joint venture is a mode of entry where a firm collaborates with a local company in the international market to form a new entity. This new entity is jointly owned and managed by both parties. Joint ventures enable firms to access the local market knowledge, distribution networks, and resources of the local partner. This brings the firm closer to international markets as it allows them to leverage the partner's expertise and establish a stronger presence in the target market.
Franchising:
Franchising is a mode of entry where a firm grants the rights to another party to operate under its established brand name, business model, and systems in exchange for fees and royalties. While franchising provides a way for firms to expand their presence in international markets, it may not necessarily bring the firm closer to the market. The franchisor typically maintains control over the brand and business operations, while the franchisee operates the business locally.
Licensing:
Licensing is a mode of entry where a firm grants permission to another party to use its intellectual property, technology, or know-how in exchange for a fee or royalty. This allows the licensee to produce or sell the licensed products or services in the international market. Similar to franchising, licensing may not bring the firm closer to the market as the licensee operates independently and the licensor maintains control over the licensed assets.
Contract manufacturing:
Contract manufacturing is a mode of entry where a firm outsources the production of its products to a third-party manufacturer in a foreign country. The third-party manufacturer produces the goods as per the firm's specifications and requirements. While contract manufacturing enables firms to access cost-effective production facilities, it does not necessarily bring the firm closer to the market as the manufacturer is not directly involved in marketing and selling the products.
Conclusion:
Among the given options, joint venture brings the firm closer to international markets as it involves collaboration with a local partner and allows the firm to leverage their knowledge and resources. Joint ventures provide a way for firms to establish a strong presence in the target market and access the local market opportunities. Franchising, licensing, and contract manufacturing, on the other hand, may provide access to international markets but do not necessarily bring the firm closer to the market in the same way as joint ventures.
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