Which of the following is not a mode of entry to International business?

The correct answer is - Personalised sales contract

Key Points

• Personalised sales contract
  • This term does not represent a formal mode of entry into International Business.
  • Modes of entry refer to structured methods through which companies expand their operations globally, such as exporting, licensing, or foreign direct investment.
  • A personalised sales contract is simply an agreement tailored between parties and does not constitute a recognized strategy for entering international markets.
  • Understanding the difference between entry modes and contractual agreements is crucial for exam preparation.

Additional Information

• Direct exporting
  • Involves selling goods or services directly to foreign buyers without intermediaries.
  • It is a common mode of entry for businesses venturing into international markets.
  • Advantages include greater control over operations and higher profit margins.
• Indirect exporting
  • Involves using intermediaries such as export agents or trading companies to sell goods internationally.
  • This mode is typically chosen by companies with limited experience in foreign markets.
  • It reduces risk but offers less control compared to direct exporting.
• Intercorporate transfers
  • Refers to the movement of goods, services, or resources between different divisions or subsidiaries of the same company located in different countries.
  • It is a strategic mode used by multinational corporations to optimize efficiency and resource allocation.