Two low-cost methods that firms entering foreign markets can use are licensing and franchising agreements.

Question

Quizplus · Accepted Answer

Licensing and franchising are indeed two low-cost methods that firms can use to enter foreign markets. Licensing involves allowing another company to use a firm's intellectual property, such as patents or trademarks, in exchange for royalties or fees. Franchising involves granting a company the right to use a firm's business model and brand name in exchange for fees and a share of the profits. Both methods allow firms to enter foreign markets without making large investments in infrastructure or personnel, and can be effective ways to test the waters before committing to a more substantial presence in the market.

Two Low-Cost Methods That Firms Entering Foreign Markets Can Use