What does an entry strategy specify for a firm?

An entry strategy is a crucial component of a firm's expansion plan into new markets, outlining the specific goals the firm aims to achieve and the methods it will employ to reach those objectives. This involves detailed planning regarding market penetration, resource allocation, and operational tactics designed to establish a foothold in the new environment.

By defining both the goals and the means to achieve them, a well-formulated entry strategy helps a firm navigate the complexities of entering a new market, such as cultural differences, market dynamics, and consumer behavior. It ensures that the firm has a clear understanding of what it wants to accomplish—whether it's gaining market share, establishing brand presence, or generating profit—and the targeted approach to reaching those goals.

The other aspects mentioned in the other choices, such as financial risks, competitor identification, and legalities of foreign investment, are indeed important considerations for a firm entering a new market, but they do not fundamentally define what an entry strategy is. Instead, they are elements that may be analyzed as part of the strategic planning process which ultimately supports the broader entry strategy itself.