Which of the 5 entry modes is best to expand a business internationally. Explain why and why that option is better than the others.

Wireless Industry Entry Modes Examined While an actual investigation for interna- Virtual Network Provider - your firm Wholly-Owned Subsidiaries - your tional expansion would require your firm to contracts with a local mobile company to firm builds a new network in the host check with the host government to deter- use a portion of their network to serve country. Your firm has complete con- mine what entry mode options are permit- your customers. Your firm pays quarter- trol of the new subsidiary and conse- ted by law, in this project you are to as- ly fees based upon sales revenue. Using quently your firm retains all profits. sume that the following options are availa- this method, your firm is dependent on ble to your firm: franchising, management the partner firm for product quality and contracts, joint ventures, and wholly-owned development. subsidiaries. Joint Ventures - your firm creates a To help you better understand how certain new company in conjunction with another entry modes may apply to the wireless in- firm (or firms) to provide service in the dustry, the following information is of- host country. For purposes of this pro- fered. However, please consult chapter 13 ject, three joint venture options are of your text for a complete description of available - minority, 50/50, and majori- the advantages and disadvantages of these ty, and each refer to the amount of entry modes. controlling interest your firm has in the Franchising - your firm provides the rights joint venture. With a minority joint to your brand in the host market to a firm venture your firm does not have control who is either building a new network or is over daily or strategic decisions where- looking to re-brand their existing network. as with a majority joint venture your In return, your firm receives a flat fee and firm does. In a 50/50 joint venture, ongoing royalty fees. your firm shares all decisions equally with your partner(s). With joint ven- Management Contract - your firm operates tures, your firm receives x%% of the the network of a local firm using their profits from the venture where 'x're- brand. In return, your firm receives quar- fers to the percent ownership your firm terly fees based upon sales revenue. holds in the joint venture