Foreign market entry modes (Participation strategy) differ in degree of risk they present, the control and commitment of resources they require and the return on investment they promise.

There are two major types of entry modes: equity and non-equity modes. The non-equity modes category includes export and contractual agreements. The equity modes category includes: joint venture and wholly owned subsidiaries.

Exporting

Exporting is the process of selling of goods and services produced in one country to other countries.

There are two types of exporting: direct and indirect.

Direct Exports

Direct exports represent the most basic mode of exporting made by a (holding) company, capitalizing on economies of scale in production concentrated in the home country and affording better control over distribution. Direct export works the best if the volumes are small. Large volumes of export may trigger protectionism. The main characteristic of direct exports entry model is that there are no intermediaries.