Fig. 1 : Generic process flow diagram for the market entry in foreign economies such as China.

Definition

Market entry can be defined as the planned method of delivering goods and services to a new target market and distributing them there.

Entry mode signifies the strategy a company choses to enter a given foreign target market. One distinguishes between different entry modes, such as exporting, contractual and equity strategies.

Entry modes

Home production (export strategy)

• Indirect exporting
  • Local agents (in home country)
  • Local trading companies (in home country)
• Direct exporting
  • Foreign sales representatives (in target country)
  • Foreign distributors (in target country)

Contractual market entry strategy

• Licensing
• Franchising

Foreign production (equity strategy)

• Strategic alliance
• Joint ventures (JV)
• Wholly Owned Foreign Enterprise (WOFE)
  • M&A
  • Greenfield investment
  Click here for a more detailed description and analysis of various China market entry strategies (entry modes).