Introduction

Multinational firms seeking for an

opportunity to explore International
markets have to consider crucialentry
decisions as these markets involve high risk
and uncertainties. The three basic decisions
that a company contemplates before
expanding into the foreign markets include
the decision as to which market to step
into. Another important issue is to
understand the political and economic
issues that eventually affect the
attractiveness of a foreign market. It is also
vital to lookout for factors such as the
market size with respect to the
demographics, the purchasing power of the
consumers and the expected growth of the
country in the future. Time of entry into
these markets plays a key role, for example
it may not be practical to expand or enter
new markets during times of recession and
vice versa during periods of economic
boom.
The options with regard to the mode of
entry include the following:

Indirect and Direct Export:

Companies usually start with indirect
exporting as they have potential advantages
like less risk as the independent
intermediaries brings in experience and
services to the relationship, therefore seller
will make lesser errors. Direct exporting
where firms handle their own exporting
activities and the initial investment and risk
are much higher but high returns are more
likely.

Licencing & Franchising:

Licencing involves one firm permitting
another firm license for a limited period to
use its patent, trade secrets or other item
for a fee or royalty.
Franchising is very similar to licensing,
involving an agreement between two firm
in which one firm allows other to use its
brand name, technology, methods to
market and produce the product.
Joint Ventures:
Joint ventures (JV) are contracts or
agreements between firms often setup in
different countries to operate in
cooperation with each other as a single
corporate entity and share profits and
losses through the execution of a business
or undertaking. The core issues JV should
take into account before entering would be
ownership, length of contract, control and
pricing agreements etc. The best example
for joint venture operations in India would
be Marks & Spencer with Reliance Retail
Ltd. The prime advantage would be easy
access to enter the market, joint product
development, local knowledge and
technology, consumer behaviour and
cultural adaptability.

Conclusion
As Mercedes-Benz, from the family Daimler
AG in Germany has setup its headquarters
in Dubai in the UAE.The Multi-national
giantshave franchised their operations to
the locals in the host countries operating in
the Middle-East. The company Gargash
Enterprises L.L.C has obtained a dealership
as a sole distributor, through franchise
agreements with Daimler AG to sell
Mercedes-Benz vehicles in Dubai and
Northern Emirates. The strategy was
adopted keeping in mind the local image
and the cultural adaptability of Gargash
Enterprises L.L.C. in the Middle-East.