Entry modes and dynamics

This chapter examines different modes of entry available to foreign enterprises entering the Indian market. It presents the key concepts of the market entry modes and describes the different forms of entry modes, both equity-based and non-equity-based, along with the advantages and disadvantages and the key regulations in India associated with each entry mode. The chapter provides key contact details useful to foreign investors and discusses the criteria for selection of entry mode. An enterprise intending to do international business faces a decision crunch time when it needs to decide how to enter a given foreign market. Exporting is a non-investment-based entry mode as the enterprise does not undertake any foreign direct investments in the host countries. Licensing and franchising are non-equity-based entry modes because the licensor or franchisee does not buy an equity stake in the licensee’s or franchisee’s business.