What can a business gain by outsourcing as a mode of entry?

Outsourcing as a mode of entry allows a business to reduce costs related to production processes significantly. By shifting certain operations to external suppliers or specialists, companies can leverage the expertise and efficiencies of those providers, often leading to lower labor costs, decreased overhead, and improved production efficiency. This strategic move can enhance profitability and provide more flexibility, enabling the business to focus on its core competencies while benefiting from lower operational expenses.

In contrast, maintaining control over production, achieving direct market impact, or obtaining exclusive rights to products is not typically associated with outsourcing. When a company outsources, it often relinquishes some degree of direct control over the outsourced activities, which can affect quality and flexibility. While outsourcing can influence market presence positively, the direct impact is usually not as pronounced as when companies manage all operations in-house. Exclusive rights typically pertain to product ownership and licensing, which outsourcing does not inherently provide.