STARTING

GLOBAL
BUSINESS
ACTIVITIES
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METHODS FOR
GETTING INVOLVED IN
INTERNATIONAL
BUSINESS

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Methods for getting involved in International Business

01 Indirect Exporting
02 Direct Exporting

03 Management
Contracting
04 Licensing
05 Franchising
06 Joint Venture
Foreign Direct
07
Invesment
08
Wholly-Owned
Subsidiary
Low Risk Method for getting involved
in International Business
• INDIRECT EXPORTING At first, a business organization may get involved with international business
by finding a demand for its service or product without really trying. Indirect exporting occurs when a
company sells its products in a foreign market without any special activity for that purpose.
• DIRECT EXPORTING After sales increase and a company decides to get more involved in international
business, the organization will probably create its own exporting department. Direct exporting occurs
when a company actively seeks and conducts exporting.
• MANAGEMENT CONTRACTING Knowledge is a powerful tool in business. An ability to find
business opportunities, coordinate resources, solve problems, and make productive decisions is a skill that
will be in demand throughout your life. The abilities of managers to assist companies in developing
countries are important exports for industrialized countries.
• LICENSING To produce items in other countries without being actively involved, a company can allow a
foreign company to use a procedure it owns. Licensing is selling this right to use some intangible
property (production, process, trademark, or brand name) for a fee or royalty.
• FRANCHISING The right to use a company name or business process in a specific way. Organizations
contract with people in other countries to set up a business that looks and operates like the parent
company. This is also to adapt various business elements.
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High Risk Method for getting involved
in International Business

• JOINT VENTURE A partnership can provide benefits to all owners. One type of international
partnership is the joint venture, an agreement between two or more companies from different countries to
share business project.
• FOREIGN DIRECT INVESTMENT (FDI) Occurs when a company buys land or other resources in
another country. Real estate and existing companies are common purchases under this method.
• WHOLLY-OWNED SUBSIDIARY Which is an independent company owned by a parent company.
Multinational companies frequently have wholly-owned subsidiaries in various countries that ate the
result of foreign direct investment.