What technique allows firms to access global markets effectively?

Franchising is a technique that allows firms to effectively access global markets by leveraging established brands and business models. Through franchising, a company (the franchisor) grants another party (the franchisee) the rights to operate a business under its brand and according to its established operational guidelines. This model not only minimizes the risks associated with entering new markets but also enables rapid expansion with lower capital investment compared to other methods.

Franchising capitalizes on local knowledge and resources as franchisees often possess a better understanding of their specific market, including customer preferences, cultural nuances, and regulatory environments. This local expertise can significantly enhance the chances of success in a new market. Additionally, the franchisor can achieve scale and brand recognition rapidly without bearing the full burden of setting up operations in each new location.

The collaborative nature of franchising allows for a mutually beneficial relationship where franchisees can operate independently but still receive support from the franchisor in areas such as marketing, training, and operational guidelines, thus ensuring brand consistency and quality across different regions.