More recently, Brouthers and He nnart (2007) classified entry modes into two broad categories,Some of the most common strategies for market entry include: Exporting. The advantages of _____ are most apparent when capital is scarce, import restrictions forbid other means of entry, a country is sensitive to foreign ownership, or patents and trademarks must be protected against cancellation for nonuse. 4 explains the contractual entry modes. chapter 12 IBM 300. Cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. International. Contract Manufacturing. Country Selection Framework • 6. Licensing is an arrangement by which the owner of intellectual property grants another firm the right to use that property for a specific time period in exchange for royalties or other compensation. Market entry strategies are the methods and channels that a company uses to enter a new market. 9 Types of Foreign Market Entry Strategies. 3 Contractual Entry Modes in North America, West Europe and Other Countries After 2001,. The transaction market entry of licensing is. When the executives in charge of a firm decide to enter a new country, they must decide how best to do it. 3) Franchising Services. A) A joint venture B) One-hundred-percent ownership C) Licensing D) Exporting E) A Global strategic alliance; Answer: CForeign Market Entry Modes. 15. Acquisition Strategy—purchasing existing facilities. Intellectual Property. Contractual entry strategy _____ in international business refer(s) to a cross-border exchange in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. 1 “International-Expansion Entry Modes” (Zahra et al. - negotiate a formal agreement. Export modes are low-cost entry strategies, which provide companies with a quick entry route into the foreign market. direct investment O d. intellectual property. Everybody deserves the benefit of the doubt, but it’s important to establish that the party is indeed legally able to enter a contractual relationship. to foreign markets. Reduces political risk as in most cases, the licensing or franchising partner is a local business entity. In this chapter, we address various types of cross-border contractual relationships, including licensing and franchising. Increases revenue and profits. S. , 2) Exporting and foreign direct investing are two common types of contractual entry. One of the advantages of direct exporting for company include more control over the export process. The alliances often advance common goals, secure common interests, or leverage resources and. Market entry strategies refer to a company’s goals, plans and decisions in regard to which market to enter, when to enter and how to enter (taking into account opportunities, threats and customer needs). Chapter 7: Market Entry Strategies. 1 Explain the difference between adaption and standardisation in international marketing. What are unique aspect of contractual relationship (5) 1. Contractual entry strategies in international business. Direct Exporting. Diff: 1: Easy Skill: Application Objective: 15-1: Explain contractual entry strategies AACSB: Analytical Thinking 7) An industrial design is intended to _____. Going Global • 8 minutes. Firstly, it needs to determine the goals of the joint venture and align them with the strategic objectives of all the participating entities. The way that the intellectual property is used depends on the details of the contract. 1 (EUR one33. market size. Contractual modes involve the use of contracts rather than investment. ,The study has identified the knowledge gap concerning suitable contract risk management strategies available for implementation to effectively prevent any contract parties from losing money, time and. Licensing. 2. These strategies involve entering into a contract with a foreign partner, in which the terms and conditions of the relationship between the focal firm and the partner are explicitly laid out. Firms can pursue them independently or in conjunction with other entry strategies. Expert Answer. Outbound licensing applies to the use of LEGO’s. It is a particularly useful strategy if the purchaser of the license has a relatively large market share in the market you want to enter. -Firms. Strategic alliances. Angelica Weiss Chapter 16: Licensing, Franchising, and Other Contractual Strategies Contractual entry strategies in international business: cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit contract Intellectual property: ideas or works created by individuals or firms, including discoveries. Acquisition is also a good strategy when an industry is consolidating. 2 Franchising as an expansion strategy 3. The franchisor shares ownership of the brand’s reputation and know-how with the franchisee in exchange for royalties established ex-ante through contractual arrangements (Brouthers and Hennart, 2007). Intellectual Property Answer & Explanation. Source. ‘Market’ in this case may refer to a market segment, domestic or international. cross-border contractual relationships share several common characteristics. Production quality, adaptation to buyer preferences and a careful licensing strategy are the key driver's of the company's spectacular success in the US $ 151. The investment entry mode is the one that requires the most commitment on the part of a company, in terms of both management time and financial and human resources. If a small business wants to take the least risky strategy to enter its first foreign market, it would choose which of the following global entry strategies? Exporting. What are the two types of business entry modes. 55. , licensing and franchising) have lower up-front costs than investment modes do. g. The need for a solid market entry decision is an integral part of a global market. contractual entry investment entry. Joint venture E. Licensing. 1. Key elements of the acquisition strategy include, but are not limited to: Flexible and modular contract strategy that enables software development teams to rapidly design, develop, test, integrate, deploy, and support software capabilities. Besides, licensing is often adopted in view of environmental factors, such as country entry barriers, to curb product piracy and counterfeiting, and for expanding into countries where the market size is not large enough to justify higher investments. Firms move to new markets to grab the growth opportunities prevailing in different markets. Abstract. Foreign direct investment (FDI) D. The analysis shows that equity-based entry modes prevail over contractual agreements among Chinese hotel chains covered by our sample. Why franchising is the best market entry strategy? The most common advantages of franchising are that it capitalises on an already successful strategy, the franchisee generally has local knowledge, it's less risky than equity based foreign entry modes, and the franchisor isn't exposed to risks associated with the foreign market (Alon, 2014). A. Motives for FDI-Market-seeking motives-Resource or asset-seeking motives-Efficiency-seeking motives. For international trade, Foreign market entry modes are the ways in which a company can expand its services into a non-domestic market. The following sub heading will discuss how licensing impacts market entry in the United States. Study with Quizlet and memorize flashcards containing terms like contractual entry modes include (9):, contractual entry modes is when. Conclusion: Licensing and franchising are two contractual entry strategies that offer distinct advantages and disadvantages. In this section, we will explore the traditional international-expansion entry modes. firms to develop strategies to enter and expand into markets outside their home locations. The courier service is required to deliver goods from the factory to the warehouse, to customers, and also to collect customer payments for the goods. wake of investigating the foreign market entry strategies of Huawei, we can discover these. Foundation Concepts • Contractual entry strategies in international business: Cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. wants to form long-term relationships with international customers. The Five Common International-Expansion Entry Modes. True. licensing). 3. Beyond importing, international expansion is achieved through exporting, licensing arrangements, partnering and strategic alliances An international entry mode involving a contractual agreement between two. Marketing91. Chapter 16 pg. Definition and strategies. The results of your market research will also help you decide on a market entry strategy. 2. Process. Export describes business activities where goods and/or services are sold outside the country in which the major value-added activities took place. 2. In addition to exporting, companies can choose to pursue more specialized modes of entry—namely, contracutal modes or investment modes. Research and analyze international opportunities and to develop a coherent export strategy. Louis Vuitton. 0 International License. The leading toymaker that is sure in the building block toy market with a market share of eighty five percent globally. Strategic planning, due diligence, consistent follow-up, and, perhaps most important, patience and commitment are prerequisites for successful businesses in India. Zhao et al. Contractual entry strategies in international business. Global Entry Strategy A Global Entry Strategy is the planned method of delivering goods or services to a new target market and distributing them there. There are many different ways to enter a market, and the most appropriate method depends on the. Semester 2, 2017/18 ATW 395/3 International Business Learning Objectives. They. Licensing or Franchising partner has knowledge about the local market. B) franchise contract must include a foreign government. The contractual arrangements ( CA ) mode of entry is in most cases a stepping stone to international production. Contractual obligations mainly depend on the entry mode. View Test prep - 8793_MAN3600_Test_4 from MAN 3600 at Florida State University. There is a group of scholars and. 6) Mutual Recognition Agreements. A) Cooperative strategies B) Entry strategies C) Options strategies D) Competitive strategies and more. These modes of entering international markets and their characteristics are shown in Table 6. The institutional distance between home and host countries influences the benefits and costs of entry into markets where a firm intends to conduct business. LEGO is a late entrant in the contractual. Flashcards. The non-equity modes category includes export and contractual agreements. Buying more time to build a reputation. Four Barriers You Need to Overcome Before Planning Your International Market Entry Strategies. INVESTMENT ENTRY MODE. (2004) differ between ownership-bas ed entry modes (OBEs) and contract based modes (CBMs). The time required to implement entry modes to foreign markets may strongly vary: contract-based entry modes usually entail quicker realization compared to equity-based entry modes. Disadvantages include loss of control over quality. Market entry strategies refer to a company’s goals, plans and decisions in regard to which market to enter, when to enter and how to enter (taking into account. 2. These same reasons make exporting a good strategy for small and midsize companies that can’t or won’t make significant financial investment in the international. This systematic literature review. Study with Quizlet and memorize flashcards containing terms like Royalty, Franchising. A contractual entry mode in which a company that owns intangible property (the licensor) grants another firm (the licensee) the right to use that property for a specified period of time Franchising A contractual agreement in which one company (the franchiser) supplies another (the franchisee) with intangible property and other assistance over. " Questions 15-1. Through a distribution contract, the foreign investor makes real its planned market entry strategy in order to achieve its goals. Pros and cons of different market entry modes – a study of Finnish companies entering the South Korean market Anna Långbacka Master’s Thesis International Business Management 2018 . In contractual entry modes, the _____ between a focal firm and its foreign partner is governed by an explicit contract. The question about the right international strategy is often divided into five major subjects: (1) Market entry as part of a general strategy, (2) the selection of target markets, (3) choosing the right time to enter a foreign market. Licensing is governed by a licensing agreement, which involves a one-time transfer of property or rights for a fee. 1. CONTRACTUAL ENTRY STRATEGIES Two common types of contractual entry strategies are licensing and franchising. While the pandemic has led Indian companies to work more frequently with global partners in virtual environments, it remains to be seen whether this is a permanent shift in business practices. Disadvantages. Praise for Entry Strategies for International Markets, Revised and Expanded To a generation of students and readers, Franklin Root has been known as the leading authority on the international entry strategies of companies. The global monetary value of licensed toys and games is expected to grow annually at the rate of 2-3% until 2020. The franchisor shares ownership of the brand’s reputation and know-how with the franchisee in exchange for royalties established ex-ante through contractual arrangements (Brouthers and. As the marketing manager for Selfie, a self-driving car, what marketing entry strategy would you use to sell Selfie in Asia? Briefly explain why that would be the best strategy to use to sell Selfie to. , 2) Exporting and foreign direct investing are two common types of contractual entry strategies. 6) Mutual Recognition Agreements. Louis Vuitton company incorporates pricing based on value into its mix of product marketing. “Entry Strategies: Modes of Entry”, section 5. Exporting. LEGO products are in 130 countries—but the company is always looking to expand its operations. alexis_pflumm. A. Low cost of entry into an international market. Show transcribed image text. A collective mark _____. Need thoughtful strategy to tackle dissimilarities at different levels (global, macro, micro) Entry strategies depend on numerous factors including ; Size of the market, business environment ; Product-market fitThis course focuses on the challenges and opportunities associated with organizational management and business strategy in emerging economies. This definitio n includes both entry mode strategy and . A strategic alliance is an agreement between two or more parties to pursue a set of agreed-upon objectives while remaining independent organizations. Management contracts are increasingly popular among owners. What is a contractual entry mode? Contract Manufacturing: – This entry mode is a cross between licensing and investment entry. When to enter them and on what scale. LO 4: Licensing, Franchising, & Other Contractual Strategies 14 Contractual entry strategies in international business Cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. Can harm existing relationships. 2) The licensing company benefits from the licensee company’s local market knowledge. OER 2019 Edition. This research process involves legal counsel and international distributors. Let's take a look these. - By utilizing various contractual entry strategies, Warner is able to generate royalties. 15. that foreign market entry strategies usually accord with the sequential stages of Exporting, Competitive alliances, Acquisition /foreign direct investment. Let’s look at the two main contractual entry modes, licensing and franchising. Exporting The most commonly used entry strategy that is both profitable and of low risk is based on the sale of product directly in the focused market with no. Can be pursued independently or in conjunction with other entry strategies. Two common types of contractual entry strategies are licensing and franchising. McDonald’s. 3. , 2010: 60). Contractual forms of entry (i. 50 per tick x 264). • Intellectual property: Ideas or works created by firms or individuals, such as patents, trademarks, and copyrights. D) fails to make a hard-currency purchase of any product from that nation in the future. Other Contractual Entry Strategies Chapter 15 Contractual Entry Strategies There are two common types of contractual entry strategies; 1. [2] defined market entry as "a planned move into a new or adjacent market for the creation and delivery of offerings. There are various market entry strategies that can be employed by firms in developing their foreign business. GSPs are ambitious, reciprocal, cross-border alliances that may involve business partners in a. Advantages and disadvantages of franchising Foundation ConceptsFurthermore, disputes between franchisors and franchisees regarding contract terms, territorial rights, or intellectual property issues can arise and negatively impact the relationship (Cavusgil et al. We would like to show you a description here but the site won’t allow us. Contractual Entry Strategies – Licensing – arrangement in which the owner of intellectual property grants the right to use that property for a specified period of time in exchange for royalties – fee paid periodically to compensate a licensor for the temporary use of its intellectual property, often based on percentage of gross sales. Franchising 3. - Arrangement where owner of intellectual property grants another firm right to use property for specific time in exchange for royalties or other compensation. 1. Driscoll recognized three modes to enter a foreign market: Export entry modes, Contractual entry modes, Investments modes. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in int'l business:, Contractual Entry Strategies:, Unique Aspects of Contractual Relationships: -They are governed by a contract that provides the focal firm with a _____ level of control over the foreign partner. Becoming a “habitual” supplier of products and services to loyal customers. A) eliminate the possibility of the design being copied 2. Create flashcards for FREE and quiz yourself with an interactive flipper. Ideas or works created by firms or individuals, such as patents, trademarks, and copyrights. Exporting When a company decides to enter the global market, exporting is usually theleast complicated and least risky. Complete Guide. The simplest form of entry strategy is exporting using either a direct or indirect method such as an. Contractual entry strategies 2. 6 Joint Ventures VIII. They provide dynamic, flexible choices. The selection of entry modes when penetrating a foreign market ± A research study on the education institutes choice of entry mode Author(s) : Annica Gunnarsson , Master in Marketing 4FE02E Tutor: Åsa Devin e Subject: International Marketing Strategy Level and semester: Master´s Thesis , Spring 2011Expert-verified. In this section, we will explore the traditional international-expansion entry modes. Terms in this set (19) Contractual entry strategies. Mainly three modes of entry into foreign markets can be exercise. The future of business unit depends on this decision whether it will survive or not. g. Test. Licenses can be for marketing or production. cross-border exchanges in which relationship between focal firm and foreign partner is governed by explicit contract. Licensing is a relatively sophisticated arrangement where a firm transfers the rights to the use of a product or service to another firm. ideas or works created by individuals or firms, including discoveries and inventions; artistic, musical, and literary works; and words. The equity modes category includes joint ventures and wholly owned subsidiaries. Contractual entry strategies in international business are cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. Contractual entry 3. Firms need to evaluate their options to choose the entry mode that best suits their strategy and goals. Chapter 14 Licensing, Franchising, and other Contractual Strategies Opening: Harry Potter; The Magic of Licensing386 • Warner Brothers has exclusive licensing rights to the Potter series • Warner allows companies to use Potter realted images on manufactured products in exchange for royalty • Licensing process is self generating o Each new Harry. A) initiation of meetings with intermediaries B) matching of market needs to company abilities C). Workflow efficiency strategies for automating your contract workflow. Ask a question to Desklib · AI bot. International Entry Decisions • 2 minutes. economic, political and demographic power. Changes in the franchisors’ strategy may be slow to implement, because franchise contracts usually run for 3–5 years, and substantial changes are only possible by changing the contracts. Contractual entry strategies in international business cross-border exchanges where the relationship between focal firm and its foreign partner is governed by an explicit contract. international experience. How does LEGO generate royalties by using contractual entry strategies? LEGO is the leading toy manufacture within the building-block toy industry with 85% market share globally. Clear direction: Market entry strategies require market research about exporting guidelines, foreign tariffs, and more. In this chapter, we address various types of cross-border contractual relationships, including licensing and franchising. Step-By-Step Solution. Arrow, ‘America’s shirt maker since 1851’ follows the licensing strategy to expand worldwide. However, if a. The strategic importance of an international business operations lie in that a firm can maintain more control over international business and enhance experiential knowledge, critical for further overseas. Includes such knowledge-based assets of. Having an effective contract management process helps businesses in accelerating contract review and execution. The company contracts a firm in the foreign market to assemble or manufacture the products but they still have the responsibility for marketing and distribution of the products according to Root (1994:113); Chapter Overview. b. Contr actual Entry Str a tegies Licensing: arr angemen t in which the owner of int ellectual pr operty gr ants a firm the right to use that pr operty f or a specific time period in e xcha nge f or ro yalties or other comp ensation1) A company is able to enter a market that has restrictions on foreign companies. d. Licensing is an arrangement by which the owner of intellectual property grants another firm the right to use that property for a specific time period in exchange for royalties or other compensation. Barkema, Bell and Pennings (1996) suggest that low commitment entry strategies may be preferred to. The most common methods firms join international trade are through contractual entry strategies such as direct exporting, franchising, licensing, management contract, contract manufacturing, buying a company, and joint ventures. We define franchising as a strategy mainly used by service companies, that allows the franchisee to use a business model, processes or brand name for a fee, to conduct. Other Contractual Entry Strategies. Trademark. Study with Quizlet and memorize flashcards containing terms like 1) Contractual entry strategies in international business are cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. However, the focus in this chapter is on M&A as a market entry or expansion mode, because cross-border. Licensing. Intellectual property. Access International Business: The New Realities [RENTAL EDITION] 5th Edition Chapter 15 solutions now. There are two major types of market entry modes: equity and non-equity. Contractual entry strategies in international business are cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. Barkema, Bell and Pennings (1996) suggest that low commitment entry strategies may be preferred to. licensing, and contract manufacturing. FDIs have been portrayed as effective market entry strategy in the United States Market. It’s a low-cost, low-risk option compared to the other strategies. 82. 1 International-Expansion Entry Modes; Type of Entry Advantages. The licensee will provide the majority of the infrastructure in most situations. acquisitions), contractual entry modes (e. strategic international alliances, and global strategic partnerships (GSPs) represent an important market entry strategy in the twenty-first century. 2. How does LEGO generate royalties by using contractual entry strategies? 15-2. D) franchise contract involves less control and. give later entrants a cost advantage over early entrants. Offers you a passive source of income. Contractual Modes of Market Entry. A contract manufacturer (“CM”) is a manufacturer that enters into a contract with a firm to produce components or products for that firm . A) should bribe government officials to ensure protection of intellectual property B) should register patents and copyrights with local governments C) should keep information about intellectual property confidential from all franchisees in. 1 “International-Expansion Entry Modes” (Zahra et al. 15. Generalizes on the best strategy to enter the market, e. International Business: The New Realities, 5th Edition caters to a post-millennial student audience, the most diverse and educated generation to date. 1 Explain the different kind of contractual entry strategies Huawei may follow. What makes up a contractual entry strategy? (3) 1. The equity modes category includes joint ventures and wholly owned subsidiaries. Exit strategy. A) a monetary down-payment plus royalties for all products sold locally B) a combination of intellectual property and technical information and assistance l a storefront or facility and the necessary materials to make the product D) a combination of a lump-sum payment and the intellectual know-how 37) wh 38) In a licensing agreement, the. Students shared 19 documents in this course. The choice of international strategy has long-term implication for MNCs. decide on the goals of the target markets. lacks the resources to make a significant commitment to the market. 1. Switching costs: A. Joint. 4. Foundation Concepts • Contractual entry strategies in international business: Cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. A firm wishing to expand into foreign markets can use contractual entry strategies, foreign direct investment, and exporting, among other strategies. 6 market entry practices specifically for service exports. 2. This is an example of _____. Available under Creative Commons-ShareAlike 4. Available under Creative Commons-ShareAlike 4. The choice of foreign country markets and the selection of corresponding market entry strategies belong to classical questions in the international business research, which – despite their high relevance for business success – have not yet been consistently solved. cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit contract. Licensing is an arrangement by which the owner of intellectual property grants another firm the right to use that property for a specific time period in exchange for royalties or other compensation. London: Kogan Page. , 75 percent) joint venture is a contractual entry mode strategyA solid joint venture entry strategy should encompass several important elements. Question: 2 Exporting and foreign direct investment are the two most frequently employed contractual entry strategies Select one: of 2 True nation False . international market selection. _____ is a contractual arrangement in which a company receives a royalty or fee in exchange for the right to use its trademark. This theory considers both location and ownership . The time required to implement entry modes to foreign markets may strongly vary: contract-based entry modes usually entail quicker realization compared to equity-based entry modes. Secondly, the automation process empowers commercial teams to self-serve on contracts, rather than waiting on. Choose question tag. 3. Study with Quizlet and memorize flashcards containing terms like 1. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business are cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. Cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. There are two major types of market entry modes: equity and non-equity. Which statement about cross-border contractual relationships is FALSE?. Market entry strategies involve market entry. Define and distinguish the following contractual entry strategies: build-operate-transfer, turnkey projects, management contracts, and leasing. View Chapter 16 & 17 MAN 3600 from MAN 3600 at Florida State University. a majority-owned (e. , Patents provide inventors the right to. 1. ). g. Studies have explored franchising as a contractual mode of entry, which represents a hybrid between markets and hierarchies (Hennart, 2010). The subject of market entry strategies is a much-researched but still contemporary one. The investment. Be that as it may, in the. University University of Washington. ENTRY STRATEGIES. Terms in this set (17) Contractual entry strategies in international business. 27). 1. 5, the conclusion of this chapter will be given. It is a form of outsourcing. 2. Direct exporters often sell directly to a consumer (B2C), a business (B2B), or a distributor in a foreign country. It emphasizes adapting products and services to local markets. It also depends on the presence of local and international competition, on regulation. View chapter 15. The. Question: Question 17 Not yet answered Contractual entry strategies in international business are cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. Allows for diversification. In this section, we will explore the traditional international-expansion entry modes. Contractual entry strategies in international business Cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit. 2 Understand licensing as an entry strategy. High costs and risks. Contractual entry strategies involve using contracts such as licensing and franchising. It is one of the firms’ most important decisions when entering new markets. Starbucks doesn’t cultivate coffee and has no plantations in which they grow, harvest and cure coffee beans. Adloonix team takes care of details. entry strategies based on strategic considerations of exploitation and augmentation of knowledge andThis strategy requires direct foreign investment from the company. _____ represent(s) a market entry strategy whereby one company permits a foreign company to make use of its patents. 2. + little or no investment required,. Contract: Liscening Agreement. Conflict, Administrative, Geopolitical and Cultural potential. 1 (EUR one33. , 2016). " Early market entry is generally considered a competitive. (2004) differ between ownership-bas ed entry modes (OBEs) and contract based modes (CBMs). Chapter 15 Licensing, Franchising and other Contractual Strategies Internatonal Business:Ch09 Global Market Entry Strategies Licensing Investment and Strategic Alliances. However, the focus in this chapter is on M&A as a market entry or expansion mode. LEGO says it is determined to secure a fair share, without com- promising its mission: to "redefine play and re-imagine learning. Which of the following market entry strategies is considered the least risky? Exporting. 2 ABSTRACT Presently, companies wanting to engage in international trade have a wide pool of choices to choose from. Course. but secures a contract to provide extensive onsite technical and management support. 3) Franchising Services. How you enter a foreign market is highly. Contractual entry strategies in international business. There are two major types of market entry modes: equity and non-equity. 4 billion. Contractual Entry Strategies. The franchisor exercises enormous control over the franchisee’s business regarding the quality of service provided, marketing and selling strategies, etc. , reported a net loss of $13. Market entry strategies involve market entry. Contractual entry strategies in international business are cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract.