Which of the following is true of modes of entry?
A) Non-equity modes require the establishment of independent organizations overseas.
B) Non-equity modes are methods used to enter a market in the home country.
C) Equity modes are indicative of relatively larger, harder-to-reverse commitments.
D) Equity modes do not require the establishment of independent organizations overseas.

Question

Which of the following is true of modes of entry? 
A) Non-equity modes require the establishment of independent organizations overseas. 
B) Non-equity modes are methods used to enter a market in the home country. 
C) Equity modes are indicative of relatively larger, harder-to-reverse commitments. 
D) Equity modes do not require the establishment of independent organizations overseas.

Quizplus · Accepted Answer

Equity modes, such as joint ventures or wholly owned subsidiaries, involve significant investments and control over operations in the foreign market, making them relatively harder to reverse compared to non-equity modes such as exporting or licensing agreements. Non-equity modes do not require the establishment of independent organizations overseas, but rather involve using existing channels or partners to access the foreign market.

Which of the Following Is True of Modes of Entry