1. Joint Venturing:
A Joint Venturing is a kind of business arrangements in which two or more parties pool their resources for the purpose fulfil the specific task, which can be either a new project or any other business oriented activities.
Profits and loss of the organization will be borne equality within the parties that may be the shares, expenses, investment, salary of the employees etc.
There are five types of Joint Venturing,
i. Project Joint Venturing - where the parties owes the shares of the profit or loss only for the specific project.
ii. Functional Joint Venturing- where the parties owes the shares of the profit or loss of the organization.
iii. Contractual Joint Venturing - where the parties owes the shares profit or loss of the organization for a certain period.
iv. Vertical Joint Venturing - where the parties owes the shares profit or loss of the vertical group of the organization.
v. Horizontal Joint Venturing - where the parties owes the shares profit or loss of the horizontal group of the organization.
2. Exporting:
Exporting is a process of producing a product in a country and selling them to another country.
The product may be dress, food, cosmetics, or any consumer products, which depends upon the need and demand of the particular geographic region it is exported for.
The buying country can be said a importing country and the one which is involved in the sale of the products is known as exporting country.
Exporting not only depends upon a country it may also be a person or an entity from where the goods are exported to other person or entity in another geographical region with different political and governmental influence.
There are two kind of exporting processes,
i. Direct exporting: Its the process where the seller directly exports the goods to the buyer.
ii. Indirect exporting: Its the process where the seller exports the goods to the trader or the retailer as an intermediator, who imports the goods to the required destination.
3. Licensing:
Licensing is another way to enter into a foreign market with a limited degree of risk.
Under International licensing, one firm in one country permits a firm in another country to use its intellectual property (trade marks, patents, etc.)
Examples like design of popular characters, like mickey mouse, tom and jerry, etc., on their products.
4. Franchising:
Franchising is a business model in which many different owners share a single brand name where a parent company allows entrepreneurs to use the company's strategies and trademarks in exchange, the franchisee pays an initial fee and royalties based on revenues.
The parent company also provides franchisee with support, including advertising and training as a part of franchising agreement.
Example:
McDonalds, Subway, KFC, etc.
5. Piggybacking:
An entry strategy in the low cost markets where one or two firms collaborate to represent one another's complementary products in their market rather than computing each other.
Example:
Going to a shopping website and adding items to
the cart, then we navigate to other shopping websites and notice an advertisement for the same item we added in our cart previously - that's called piggybacking. This is becoming popular in age of digital advertisements.
6. Wholly Funded Subsidiaries:
A corporation where the common stocks of it are 100% owned by another corporation - the parent company is known as wholly funded subsidiary.
This allows the parent company to diversify the streamline management, their own product lines, possibly can reduce risk and it has no obligations to minority shareholders.
Examples:
i. Reliance Industrial Investment and Holdings Limited is a wholly funded Subsidiaries of the Reliance Group of Company.
ii. Tata Motors Insurance Broking and Advisory Services Limited (TMIBASL), Concorde Motors India Limited (CMIL) are some examples of a wholly Funded Subsidiary of Tata Motors Group.
7. Foreign Direct Investment:
Foreign direct investment (FDI) or direct foreign investment refers to a purchase an interest of a particular organization by another foreign organization.
FDI requires a direct and substantial investment in or outright acquisition of the company based in another country and not just their securities.
For example:
A business decision made to take an interest or stakes of a company by an investor located outside its borders like a large Australian mining company acquires a smaller Angolan one for diversification.
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