Entry Mode Decision

One of the first steps in deciding on entry into a foreign market is to evaluate its internal and external factors. Internal factors can include the size of the market, the organization's experience, and product differentiation. External factors relate to consumer demographics and demand, trade barriers, and competition. Companies need to determine their acceptable risk, level of desired control, and flexibility to choose between entry modes, such as by creating a subsidiary or using an agent. Watch this video for a closer look at these criteria.