![]() A company boasted of lait frais usage, which translates to “used fresh milk,” when it meant to brag of lait frais employé, or “fresh milk used.” The “terrific” pens sold by another company were instead promoted as terrifiantes, or terrifying. David Ricks’s book on international business blunders relates the following anecdote for US companies doing business in the neighboring French-speaking Canadian province of Quebec. While this may seem to be a simple task, it’s often a source of embarrassment for the company and humor for competitors. This requirement may be driven by local regulations or by the company’s wish to market the product or service in a locally friendly fashion. One common factor in exporting is the need to translate something about a product or service into the language of the target country. Firms need to evaluate their options to choose the entry mode that best suits their strategy and goals. Each mode of market entry has advantages and disadvantages. Hitt, “International Expansion by New Venture Firms: International Diversity, Mode of Market Entry, Technological Learning, and Performance,” Academy of Management Journal 43, no. These modes of entering international markets and their characteristics are shown in Table 8.1 "International-Expansion Entry Modes". Beyond importing, international expansion is achieved through exporting, licensing arrangements, partnering and strategic alliances An international entry mode involving a contractual agreement between two or more enterprises stipulating that the involved parties will cooperate in a certain way for a certain time to achieve a common purpose., acquisitions, and establishing new, wholly owned subsidiaries, also known as greenfield ventures An international entry mode involving the establishment of a new, wholly owned subsidiary. In this section, we will explore the traditional international-expansion entry modes. The Five Common International-Expansion Entry Modes ![]()
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