Avoids the cost of establishing local manufacturing operations, and it helps the firm achieve experience curve and location economies. As discussed in the preceding chapter, entry mode choice is seen as “a critical component” in the process of internationalization (Morschett et al. However, the focus in this chapter is on M&A as a market entry or expansion mode, because cross-border. This loss occurred predominantly because Time Warner took a charge for asset impairments of $24,309 million, ($24. Contractual obligations mainly depend on the entry mode. 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). Companies need to have a strategy to enter world markets. The quality of its production, the ability to adapt to the preferences of buyers and a meticulous licensing strategy are the main factors that have led to the firm's remarkable success in the U. , wireless telecommunications). 2. 6. certain "cooperative" modes. OER 2019 Edition. Outbound licensing applies to the use of LEGO’s. 2. com A) It is a more visible strategy than FDI and draws a lot of criticism from the local market. 1 International-Expansion Entry Modes; Type of Entry Advantages. 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. Licensing allows another company in your target country to use your property. 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. Exporting is the direct sale of goods and / or services in another country. Less control, licensee may become a competitor, legal and regulatory environment (IP and contract law) must be sound: Partnering and Strategic Alliance: Shared costs reduce investment needed, reduced risk, seen as local entity:. Explain what steps a firms should take to launch a collaborative venture with a foreign partner successfully. Joint ventures. View Solution. Question: This problem has been solved!Modes of Global Market Entry MOR 492: Global Strategy Global Entry Mode OVERVIEW: ENTRY STRATEGIES Logic of. Royalties are responsible for protecting the owner of patents and they are usually abided by agreement that give others space to use property (Bonadio, 2015). A company that decides to enter the international market. Licensing or Franchising partner has knowledge about the local market. India - Market Entry Strategy. In this chapter, we address various types of cross-border contractual relationships, including licensing and franchising. Exporting. 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. 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. The equity modes category includes joint ventures and wholly owned subsidiaries. , reported a net loss of $13. 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. Complete Guide. Intellectual Property. internationalization and entry strategies employed as a tool, in executing their international marketing goals, this will allow us to have deeper insight on how firmsA contract management strategy is a business tool for implementing and overseeing all stages of a contract to increase efficiency and decrease risk. Build-Operate-Transfer Contract: A build-operate-transfer contract is a model used to finance large projects, typically infrastructure projects developed through public-private partnerships . , 75 percent) joint venture is a contractual entry mode strategyContractual entry strategies in international business are cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed. The licensor provides no technical support or assistance in most. Firms can pursue them independently or in conjunction with other foreign market entry strategies. Resource constraints can limit SMEs. The different approaches of market-entry can be further classified on the basis of the equity or non-equity requirements of each approach. Nonequity- based entry strategies offer better protection against country risks and transactional hazards than equity-based strategies but non-equity strategies, such as export and contractual agreements, enable less organizational learning. Royalties What are unique aspect of contractual relationship (5) 1. governed by a contract that provides the focal firm with moderate level of control over the foreign partner 2. A contract management lifecycle has three key focuses — creation, negotiation, and. At the same time, some contractual modes of entry can prevent a company from taking full advantage of large market growth. 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. Intellectual Property Answer & Explanation. 3 Contractual Entry Modes in North America, West Europe and Other Countries After 2001,. Expert Answer. 0 International License. This research process involves legal counsel and international distributors. It is important as a marketer that you understand the level of risk involved in each and are able to identify which strategy firms are currently using Firms looking to. tax benefits, subsidies, etc. Runnerz Inc. -determine the nature of legal relationship with the prospective partner. Q: In 2008 Time Warner, Inc. Professor Root offers recent examples of. Beyond importing, international expansion is achieved through exporting, licensing arrangements, partnering and strategic alliances An international entry mode involving a contractual agreement between two or more enterprises stipulating that the involved. , Which of the following is a potential disadvantage to licensing?, Which of the following is a general term that refers. (1987) Entry strategies for international markets, Lexington, Mass, Lexington . 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 strategies 2. -diversify sales-gain international business experience (low cost, low risk) Developing an Export Strategy: A Four-Step. The contract manufacturer will quote the parts. In addition to exporting, companies can choose to pursue more specialized modes of entry—namely, contracutal modes or investment modes. Disadvantage: no intern-al knowledge of the market. This chapter examines the management contract and the key components that shape its success as an entry mode. The advantages and disadvantages of the market entry strategy are as follows: Advantages. to foreign markets. 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. These modes of entering international markets and their characteristics are shown in Table [Math Processing Error] 7. 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). - Firms that use licensing often can avoid expensive entry as is usually required in FDI. CONTRACTUAL ENTRY STRATEGIES Two common types of contractual entry strategies are licensing and franchising. Firstly, they can provide a low-risk entry point into a new market without exposure to the risks. give later entrants a cost advantage over early entrants. A) initiation of meetings with intermediaries B) matching of market needs to company abilities C). There are many different ways to enter a market, and the most appropriate method depends on the. 15. Chapter 8. Firms need to evaluate their options to choose the entry mode that best suits their strategy and goals. Franchising 3. 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. How you enter a foreign market is highly dependent on your company’s capabilities and strategy, as well as on your target market. Intellectual property. An MNC may move into that mode voluntarily (to test the waters, so to speak) or for purely defensive reasons (to prevent a competitor from entering the market or to. It is one of the firms’ most important decisions when entering new markets. Principles of Management. More than a third of the sales of toys and non-electronic games worldwide are generated through licenses. True False FDI and exporting are the two most commonly used contractual entry strategies in international business False True In factor proportions. + little or no investment required,. Registration: Not necessary: Mandatory: Training and support: Not provided: Provided:. A. The first step is to decide on what you want to achieve with your exporting project and some basics about how you’ll do so. C) A local firm allows the focal firm to blend into the local market, attracting less attention. 1. If well implemented, these strategies will help a construction project be successful and experience fewer contractual disputes. In any case, the future trade. 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. , 2010: 60). 1. This definition includes both entry mode strategy and international market selection. Licensing _____ is an arrangement in which the owner of an intellectual property grants another firm the right to use that property for a. Exporting is a viable international entry strategy when the firm: a. 3 from the book Global Strategy (v. Title: Entry Strategies for Emerging Markets 1 Chapter 5. d. 2 The Entry Mode . 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. How does LEGO generate royalties by using contractual entry strategies? 15-2. What is contractual entry mode? Two common types of contractual entry strategies are licensing and franchising. 2. Exporting involves marketing the products you produce in the countries in which you intend to sell them. cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit contract. A collective mark _____. Export describes business activities where goods and/or services are sold outside the country in which the major value-added activities took place. Licensing concerns a product rights or the method of production marketing the product rights. In order to enter the. Contractual entry strategies in international business. reduce local perceptions of the focal firm as a foreign enterpriseStrategic Alliance: A strategic alliance is an arrangement between two companies that have decided to share resources to undertake a specific, mutually beneficial project. A contract manufacturer (“CM”) is a manufacturer that enters into a contract with a firm to produce components or products for that firm . What are the four steps in developing a successful export strategy? (1) Identify potential markets (2) Match needs to abilities (3) Initiate meetings (4) Commit resources. _____ represents a market entry strategy whereby one company permits a foreign company to make use of its patents, know-how, technology, company name, or other intangible assets in return for a royalty payment. Step 3: Studying investment viability. drive early entrants out of the market. Licensing. Firstly, it needs to determine the goals of the joint venture and align them with the strategic objectives of all the participating entities. 1. Direct exporting. Contract Manufacturing. Study Resources. 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. Adopting this contract management strategy can benefit businesses in several ways. 5. Fresh features from the #1 AI-enhanced learning platform. Study with Quizlet and memorize flashcards containing terms like Royalty, Franchising, Exporting and foreign direct investing are two common types of contractual entry. 70 terms. Study with Quizlet and memorize flashcards containing terms like Starbucks' relentless pursuit of global market opportunities illustrates the fact that most firms face a broad range of strategy alternatives. Contract Manufacturing Contract manufacturing obviates the need for plant investment, transportation costs and custom tariffs and the firm gets the advantage of advertising its product as locally made. Strategic planning, due diligence, consistent follow-up, and, perhaps most important, patience and commitment are prerequisites for successful businesses in India. 1. market entry strategy: right to adopt entire business system. INVESTMENT ENTRY MODE. Different entry modes differ in three crucial aspects: The degree of risk they present. contractual agreements, joint ventures and wholly owned subsidiaries. The Five Common International-Expansion Entry Modes. Types Indirect Direct agent/distributor Direct branch/subsidiaryHere are 6 strategies for effective contract management. Let’s look at the two main contractual entry modes, licensing and franchising. Licensing, Franchising and. 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. Licensing 2. 3. 14). The Five Common International-Expansion Entry Modes. Entry Strategies for Emerging Markets; 2 Entry Strategies for Emerging Markets. Doing Business in Emerging Markets: Entry and Negotiation Strategies Milind R Agarwal , Pervez Ghauri , Tamer Cavusgil There are many texts available on International Business, but only a few provide a. Who are the experts? Experts are tested by Chegg as specialists in their subject area. Definition and strategies. This research process involves legal counsel and international distributors. While extant research revolves around the level of resource commitment and control in foreign activities, non-traditional. 3 Contractual Entry Modes in North America, West Europe and Other Countries 41 5. they typically include the exchange of intangibles and services 3. Exporting is an effective entry strategy for companies that are just beginning to enter a new foreign market. LEGO products are in 130 countries—but the company is always looking to expand its operations. an entry strategy requires decision on (1) the choice of a target product/market, (2) the objectives and . In the months and years before expanding, laying out the groundwork can help companies identify a clear direction and achieve success. greenfield investment An. 2 Franchising as an expansion strategy 3. 3, there are trade-offs in the selection of the method of entry to another country. Switching costs: A. 27). A low-cost exit from industries (A new entrant can form a. Contract Manufacturing Examples. It’s a low-cost, low-risk option compared to the other strategies. 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). Joint venture. 10-14Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies, Characteristics of contractual relation, Intellectual property and more. It is therefore recommended for the provision of financial services in the U. Kogut and Zander ~ í99 ï give the addition to these two FDI strategies: the transaction market entry of licensing. 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. Export allows a fast and relatively less risky foreign market entry. Intellectual property. cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit contract. 0) under a. The. In the context of foreign market entry strategies, 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. 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. Foreign licensing is a simple way of getting involved in international marketing. As in the traditional entry mode and international franchising literatures, it is suggested that both organizational and environmental determinants influence the franchisor’s choice of entry mode (direct franchising, foreign direct investment, area development agreement, joint. Key marketing strategy #1: LEGO’s phenomenal market entry strategy. True. In the last section, section 2. It’s a low-cost, low-risk option compared to the other strategies. 3 operations (i. Low cost of entry into an international market. 55. Market entry strategies involve market entry. Offers you a passive source of income. c. International. To achieve the objective of internationalization, a company should take three factors into account and then choose appropriate entry modes. 2. These are trade mode, investment mode and contractual entry mode. 4. 5 Contract Manufacturing 54. Increases revenue and profits. 3. University University of Washington. Which statement about cross-border contractual relationships is FALSE?. S. 15. These options vary in terms of how much. Direct exporters often sell directly to a consumer (B2C), a business (B2B), or a distributor in a foreign country. 3 billion). Cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit contract. Each mode of market entry has advantages and disadvantages. There are four different approaches of foreign market-entry from which to decide on: exporting, contractual agreements, strategic alliances, and direct foreign investment. Available under Creative Commons-ShareAlike 4. Is your time best spent reading someone else’s essay?The respective statements are as follow: 1. For international trade, Foreign market entry modes are the ways in which a company can expand its services into a non-domestic market. It defines that the contractual entry modes include a variety of arrangements such as licensing, franchising, management contracts, turnkey contracts, non-equity joint ventures, and technical know. but secures a contract to provide extensive onsite technical and management support. Available under Creative Commons-ShareAlike 4. Marketing91. D) Focal firms use contractual relationships as an advanced entry strategy in foreign. It defines that the contractual entry modes include a variety of. When an organisation has made a decision to enter an overseas market, there are a variety of options open to it. The impact of strategy considerations can most easily be illustrated in a Cournot duopoly setting as displayed in Fig. Our firm recommends the following market entry cycle: a) Brief: Discussion of the current business situation. 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 market entry strategies. There are several market entry strategies and each one has its own advantages. Licensing. There are various market entry strategies that can be employed by firms in developing their foreign business. g. Secondly, the automation process empowers commercial teams to self-serve on contracts, rather than waiting on. Here are 10 market entry strategies you can use to sell your product internationally: 1. firms to develop strategies to enter and expand into markets outside their home locations. 1) Selling Consultancy Services. ability to preempt rivals and capture demand by establishing a strong brand name. Barkema, Bell and Pennings (1996) suggest that low commitment entry strategies may be preferred to. It is a form of outsourcing. 5) Hiring a Sales Representative. 2. What is contractual entry mode? Two common types of contractual entry strategies are licensing and franchising. Learn from your partner (and apply that knowledge within your organization) Study Chapter 5: Entry into Foreign Markets flashcards. Other Contractual Entry Strategies Chapter 15 Contractual Entry Strategies There are two common types of contractual entry strategies; 1. Franchising is a form of licensing, which is most often used. 2. Discard Apply . Through a distribution contract, the foreign investor makes real its planned market entry strategy in order to achieve its goals. Easing entry and exit of companies through: A low-cost entry into new industries (a company can form a strategic partnership to easily enter into a new industry). Market entry strategies are the methods and channels that a company uses to enter a new market. Organization will make in the light cost, risk and the. The above. In a contract manufacturing business model, the hiring firm approaches the contract manufacturer with a design or formula. This systematic literature review. B) franchise contract must include a foreign government. Contract manufacturing also enables the firm to avoid labour and other problems that may arise from its lack of familiarity with the local. The simplest form of entry strategy is exporting using either a direct or indirect method such as an agent, in the case of. Question: Question 26 Exporting and forvion direct Investment are the two most frequently employed contractual entry strategies Select one True False 27 in his International Product Life Cycle (PLC) Theory, Raymond Vernon observed that each product and its manufacturing technologies go through the stages of evolution: Introduction, maturity,. D. International Market Entry Mode. A) Cooperative strategies B) Entry strategies C) Options strategies D) Competitive strategies and more. 2. Contractual forms of entry (i. Which of the following is a contractual entry mode? Turnkey operation. 1. International market entry mode strategies of manufacturing firms and service firms. The international business and marketing literature classify entry modes for international business operations into the following categories based on the risk-return trade-off, degree of control, and resource commitment: exporting, contractual agreements, wholly owned subsidiaries and strategic alliances. Having an effective contract management process helps businesses in accelerating contract review and execution. 4 billion. This kind of ‘greenfield’ investment – ‘greenfield’ meaning. In international business, choosing the right entry mode is essential to maximize the success of your international expansion. The equity modes category includes joint ventures and wholly owned subsidiaries. They typically include the exchange of intangibles and services. 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. 5 characteristics of cross-border contractual relationships. , 75 percent) joint venture is a contractual entry mode strategyA solid joint venture entry strategy should encompass several important elements. 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. 25 “Market entry options”). However, SMEs have limited financial and personnel resources ( Brouthers and Nakos, 2004, Nakos and Brouthers, 2002 ). 2) Licensing Services. the role of management in the choice of entry mode. There is a group of scholars and. 2. 2) Licensing Services. 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. 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. Using a central platform to manage the entire process and analyze data can improve contract workflows. Chapter 16 - Licensing, Franchising, and Other Contractual Strategies. Corporate level strategies. Nonequity- based entry strategies offer better protection against country risks and transactional hazards than equity-based strategies but non-equity strategies, such as export and contractual agreements, enable less organizational learning. The non-equity modes category includes export and contractual agreements. Arrow, ‘America’s shirt maker since 1851’ follows the licensing strategy to expand worldwide. , and Graham, John L. Entry mode choice is a critical ingredient of international entry strategies, and has been voluminously examined in the field. 1 (€ 133) billion toy industry. Create flashcards for FREE and quiz yourself with an interactive flipper. Can be pursued independently or in conjunction with other entry strategies. B) improve a product's performance and marketability 3. a majority-owned (e. 15. dollar is 0. Indirect and Direct Export. International Business: The New Realities, 5th Edition caters to a post-millennial student audience, the most diverse and educated generation to date. g. Resource commitment in an emerging market is examined in terms of the degree of control of the entry strategy employed. The global monetary value of licensed toys and games is expected to grow annually at the rate of 2-3% until 2020. Acquisition is also a good strategy when an industry is consolidating. Brownfield Strategy—contributing to a joint venture. MKT 305-100- International Market Entry Strategies. Study with Quizlet and memorize flashcards containing terms like 1. 3) Franchising Services. Define and distinguish the following contractual entry strategies: build-operate-transfer, turnkey projects, management contracts, and leasing. Learning Objectives. These modes of entering international markets and their characteristics are shown in Table 6. 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. Secondly, it should involve detailed market analysis to understand the competitive landscape and potential challenges. All tutors are evaluated by Course Hero as an expert in their subject area. Franchising. Nonetheless, acquisitions are risky. 1. Equity. directly tied to jobs. The book connects to students of the technological age, facing a diverse and evolving economic environment fueled by. It emphasizes adapting products and services to local markets. Answered by PrivateWombatMaster624. Lower costs in the form of cheaper labor or raw materials, foreign government investment incentives, freight savings, & the opportunity to improve the company image are the factors that would most likely lead a. Barkema, Bell and Pennings (1996) suggest that low commitment entry strategies may be preferred to. Each strategy has its own advantages and disadvantages that. Advantages and disadvantages of licensing 4. Firms need to evaluate their options to choose the entry mode that best suits their strategy and goals. 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. 1. Grand Strategies Stability Strategy: Less risky, stable environment, expansion threatening, consolidation after stabilisation Expansion strategy: increase pace,. , 2000). Study with Quizlet and memorize flashcards containing terms like In global market entry, all of the following are entry decisions that must be made by management before entering an international market EXCEPT: a. Which of the following is a contractual entry mode? A) joint venture B) wholly owned subsidiaries C) licensing D) exporting. In this section, we will explore the traditional international-expansion entry modes. a majority-owned (e. Ideas or works created by firms or individuals, such as patents, trademarks, and copyrights. ‘Market’ in this case may refer to a market segment, domestic or international. Direct investment. Strategic Management Chapter 7. Starbucks doesn’t cultivate coffee and has no plantations in which they grow, harvest and cure coffee beans. Oct 26, 2018. 1. The analysis shows that equity-based entry modes prevail over contractual agreements among Chinese hotel chains covered by our sample. $ 151. Jeannet and Hennessy (2001) use control, asset level, variable costs. Licensing is an arrangement by which the owner of intellectual property grants another firm. 15. The entry strategies for China should be carefully planned and executed to ensure success in this competitive and rapidly evolving market. Whichever way is adopted, it all starts by following a clear strategy if the company and its products will be successful (Hitt et al, 2001). Exporting. ‘Market’ in this case may refer to a market segment, domestic or international. A strategic alliance involves a contractual agreement between two or more enterprises stipulating that the involved parties will cooperate in a certain way for a. This case studyThey are governed by a contract that provides the focal firm with a moderate level of control over their foreign partner. 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. 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. wishes to maintain direct control of the marketing program. Generalizes on the best strategy to enter the market, e. 1 (EUR one33. Contractual modes involve the use of contracts rather than investment. In contractual entry modes, the _____ between a focal firm and its foreign partner is governed by an explicit contract. 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. -Choose going in alone or collaboration. In this section, we will explore the traditional international-expansion entry modes. Franchising is a contractual international market entry mode as a licensing agreement when an organization wants to enter a foreign market quickly with low risk and resource commitment. cross-border exchanges in which relationship between focal firm and foreign partner is governed by explicit contract. Workflow efficiency strategies for automating your contract workflow. 1. Cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an exploit contract. . Market entry case examples to learn from. The alliances often advance common goals, secure common interests, or leverage resources and. [2] defined market entry as "a planned move into a new or adjacent market for the creation and delivery of offerings. 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. 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. C) licensing contract covers more aspects of operations. 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. Chemawat (in Deresky) developed a CAGE strategy of global entry that is an abbreviation of. • Often mitigate liability of foreignness for the focal firm.