ABSTRACT
Foreign market entry is a complex process fraught with potential pitfalls. In this chapter, we look at one aspect of international entry – the structure of foreign operations. Historically, firms used exporting to send products to foreign lands. Even today, exporting operations are the main method of international entry. Yet exporting offers different ways to structure an operation, including the use of market-based distributors, sharing the exporting operation with agents or joint venture partners, or internalizing the exporting tasks using home country–based personnel or the creation of foreign market–based wholly owned export subsidiaries. This chapter reviews the literature on this choice and the theories used to explain the choice, discusses how and when firms change export structures, and provides guidance for future research.
