Which of the following is a popular way for firms to enter into international service markets?

• A. Import quotas
• B. Tariff imposition
• C. Domestic licensing
• D. Franchising

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the context of the question, which is about how firms enter international service markets. This involves recognizing different market entry strategies used by firms globally.
2. Step 2: Review the options given: Import quotas and tariff imposition are trade policy tools that regulate goods, not services, so they are less relevant for service market entry.
3. Step 3: Consider 'Domestic licensing' which involves granting rights within the home country, not necessarily a method for entering foreign markets.
4. Step 4: Recognize that 'Franchising' is a common and popular method for firms to expand internationally in service industries, as it allows firms to grant rights to foreign operators to use their brand and business model.
5. Step 5: Conclude that franchising is the correct answer because it directly facilitates international service market entry by leveraging local partners while maintaining brand control.