These types of entry modes consist of several similar, but different, contractual arrangements between firms in the domestic market and the company that licenses the intangibles in the foreign market (Bradley 2005:243) . (1994:86) mention licensing, franchising, technical agreements, service contracts, management contracts, construction/turnkey contracts, co-production contracts and more. As a company, you establish some sort of partnership with another company that is in a different market than you. The goal is to improve the long-term competitiveness of alliance partners and is built on the belief that each party has something unique to contribute to the partnership. For this to work, there must be mutual benefits, shared control, and power (Albaum & Duerr 2008:373). Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay Licensing: Root (1994:86) describes licensing as the transfer of intangible property that is not subject to import restrictions. Licensing occurs when a company provides other companies in a foreign market with the technology they need, for a fee or royalty (Bradley 2005:243). This form of licensing involves one or a combination of trademark, operational expertise, manufacturing process technology, access to patents and trade secrets according to Bradley (2005:243). The company that has entered into a licensing partnership gains access to a foreign market with very low investment costs and obtains market knowledge from an established and competent local company. According to him, there are two modes of licensing agreements, namely a current technology license and a current and future technology license. The difference between the two is that in the first it only gives access to current technological progress to the licensee. The second gives access to existing and future technological development under their agreement. Companies using this entry mode must be careful not to be robbed of what is rightfully theirs and thus lose the right to exclude due to high legal costs and unclear laws. Franchising: Franchising is a derivative of licensing in which the business format is licensed instead of the technology (Bradley 2005:246). Bradley (2005:246) also explains that this form of business is nothing new, although it has gained a lot of publicity in recent times. On the other hand it is an established way of doing business in the United States. Franchising is the so-called intellectual property right, and intellectual property rights (IPR) are formal regulations that have the power to establish property as intellectual assets. Maskus (1998:186) defines intellectual property as; “Intellectual property (IP) is an asset, developed by inventive or creative work, to which the law has granted the right to exclude unauthorized use. International exploitation of intellectual property is critical for trade, foreign direct investment (FDI) and cross-border technology licensing.” Furthermore, Maskus (1998:187-188) states that these types of regulations are necessary to protect vulnerable information from overuse and parasites. Franchise packages often include trademarks, copyrights, patents and more. It is a form of distribution and marketing in which the company gives the other company the right to do business in a protected manner (Bradley 2005:246). Contract Manufacturing:- This entry mode is a cross between licensing and investment entry. The company commissions an enterprise in the foreign market to assemble or manufacture the products, but still has the responsibility for marketing and distributing the products according to Root(1994:113);Albaum & Duerr (2008:380). This entry mode requires minimal investment of money, time and executive talent; it also allows rapid entry into a new market Albaum & Duerr (2008: 380). On the other hand it also has formidable potential disadvantages such as: training of potential competitor who has access to high quality know-how and products (Root 1994:113), furthermore the profit from production is passed on to the contractor. Management Contracts: - The international management contract gives the company the right to control the day-to-day operations of a business located in a foreign market. Often this contract does not give them the right to make decisions about new capital investments, policy changes, take on long-term debt or change ownership arrangements according to Root (1994:114); When a producer wishes to enter into a management agreement, it rarely does so in isolation from other agreements (Root 1994:114). Turnkey Projects:- In a turnkey project, the contractor designs and builds a plant, starts manufacturing activities, purchases raw materials and trains employees. The entire project is then handed over to the contracting company after a trial run (Ball et al., 2008). Turnkey projects allow companies to use their own expertise and use other companies to carry out tasks that they cannot do themselves. Due to the high value of such projects, there is often government involvement and political reasons. There is always the threat of transferring competencies to other companies and giving rise to competition in existing markets and other foreign markets (Wild, Wild & Han, 2008). Investment Modes When a company decides to move most or all of its operations to foreign markets, it goes through several stages of internationalization. The ways of placing an investment have different names in business management, such as sole proprietorship, foreign direct investment, wholly owned subsidiary and wholly owned subsidiary. A large investment in a new country can be made in a sole proprietorship with a new factory or with the acquisition of a sole proprietorship and also in a joint venture according to Root (1994:6). The only mode of business is high investment which also involves high risk and possibility of high returns (Agarwal & Ramaswami 1992:3). In the sole venture mode, a firm seeks to develop a foreign market by investing directly in that market (Agarwal & Ramaswami 1992:11). Foreign Direct Investment (FDI): - The Organization for Economic Co-operation and Development (OECD) defines direct investment (FDI) as “a category of investment that reflects the objective of establishing a lasting interest by a resident enterprise in an economy (direct investor) in an enterprise (direct investment enterprise) resident in an economy other than that of the direct investor” (OECD:7). This mode of entry offers a high degree of control over international affairs in the host country (Chung & Enderwick 2001:444; Bradley 2005:269). This is a mode with high financial commitment, but also a transfer of technology, skills, management, production and marketing, production processes and other resources according to Bradley (2005:270). Bradley (2005:270) also explains that having a unique resource or competitive advantage is often important when a company wants to replicate its good business in another country. In the article by Chung & Enderwick (2001:444) it is said that FDI often generates a higher profit return than that generated by exports. However, FDI modes are also associated with greater risks and involve greater management complexity. Since these are high-risk options, companies 2005:249).