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Unformatted text preview: y to perform the service in the foreign target country, because
11 LITERATURE REVIEW
services cannot be produced in one country for export to another. Local service production
can be arranged by training local companies to provide the service (as in franchising), by
setting up branches and subsidiaries (as an advertising agency or branch bank) or by directly
selling the service under contract with the foreign customer (as in technical agreements and
construction contracts). Technologically intensive products give companies an option to
license technology in the foreign target county rather than use alternative entry modes.
Products that require considerable adaptation to be marketed abroad favor entry modes that
bring a company into close proximity with the foreign market (branch/ subsidiary exporting)
or into local production (Root, 1994).
Resource/ Commitment Factors
Root (1994) also states that the more abundant a company’s resources in management, capital,
technology, production skills and marketing skills, the more numerous are their entr...
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This document was uploaded on 03/22/2014.
- Summer '14
- The Land