Which approach involves sharing ownership and control in foreign markets?

The correct choice is joint venturing, which is a strategic approach where two or more parties collaborate to develop a foreign market, sharing both ownership and control over the venture. This method allows companies to pool resources, expertise, and local market knowledge, which can be critical for success in unfamiliar territories.

In joint ventures, companies typically create a separate legal entity in the host country, where all parties contribute equity and share profits, risks, and management responsibilities. This shared ownership can lead to significant advantages, such as reduced financial risk, access to local partners’ insights, and regulatory benefits in navigating local market dynamics. As international markets can be complex and challenging, this collaborative method can mitigate risks associated with entering new territories.

Other methods of market entry, such as licensing, involve granting rights to another company to produce and sell products under specific conditions, but do not entail shared ownership or control. Similarly, a wholly-owned subsidiary means that one company fully owns and controls the business, minimizing risks but also requiring significant investment and commitment. Franchising allows for business expansion with brand consistency while the franchisee maintains ownership of their operations, but it does not involve shared equity or management control like a joint venture does.