Root's Entry Mode Strategies Framework Graph Template

Description
In 1994, in his book "Entry Strategies for International Markets", Franklin R. Root published a graph summarizing the various different "Entry Strategies", when assessing a specific international market potential entry.

The book can be purchased here on Wiley's website.

The model he outlined in his book, is a 2x2 matrix graph with two axis:

->Extent of Investment and Risk (Low, High) - X-Axis
->Degree of Ownership and Control (Low, High) - Y-Axis

Both Axis are relatively correlated thus the "tilted ladder" aspect of the graph, leading to 6 different combinations in 3 categies, and thus possible international market entry strategies (from most implicating to least):

CATEGORY "FOREIGN DIRECT INVESTMENTS (FDI) - > Equity based
- Wholly Owned Subsidiary ✅ - Top Right - High "Degree of Ownership and Control" + Very High "Extent of Investment and Risk" - Greenfield or Acquisitions
- Joint Venture 📄 - Right - Average to High "Degree of Ownership and Control" + High "Extent of Investment and Risk"

CATEGORY "NON-EQUITY OR EQUITY-BASED" -> Contractual agreements OR Cross-shareholdings
- Strategic Alliance 🤝 - Center Right - Average to High "Degree of Ownership and Control" + Average to High  "Extent of Investment and Risk"

CATEGORY "CONTRACTUAL" -> Non-equity based
- Franchising 🏬 - Center - Average "Degree of Ownership and Control" + Average "Extent of Investment and Risk"
- Licensing 🛍 - Center Left - Low to Average ""Degree of Ownership and Control" + Low to Average "Extent of Investment and Risk"
- Exporting 📦 - Left - Low "Degree of Ownership and Control" + Low "Extent of Investment and Risk"

To discrimate between the various options, it is advised to use the "OLI paradigm" (also known as the "eclectic paradigm", which works as follows:

1/ Does the Company have an Ownership advantage? If YES continue to 2/, if NO -> Remain Domestic
2/ Does the Company have an Location advantage? If YES continue to 3/, if NO -> Produce at Home and Export
3/ Does the Company have an Internationalisation advantage? If YES, FDI (Foreign Direct Investment), if NO -> License

For further detail on now to use the OLI Paradigm in this situation, I strongly advise to read "Choosing the Right Entry Mode Strategy" by Business2You.

Given the popularity of this framework when looking to study the internationalisation of a business, I decided to create a simple PowerPoint template for any analyst, consultant or leader to use as to present the various market entry strategies that are possible according to each product line/market.

The Best Practice is:

- 1 editable Microsoft PowerPoint Template Slide
- with an online & offline 13 step-by-step methodology, with pedagogical illustrations for each step.

Should you have any questions about this top tier Project Risk Management framework template, you're welcome to reach out to me via Private Message.

Good Luck!
- Tim