Different strategies to enter into international markets

It is certainly the most costly and holds the highest risk but some markets may require you to undertake the cost and risk due to government regulations, transportation costs, and the ability to access technology or skilled labour. Despite these problems countertrade is likely "to grow as a major indirect entry method, especially in developing countries.

Ways for Companies to Enter the Global Market

Another form is the consolidation of orders by a number of companies in order to take advantage of bulk buying. Website Selling your products through a website is a simple, low-cost way of entering the global market. The building of an intelligence system and creating an image through promotion takes time, effort and money.

It is interesting to note that Korey5 warned that direct modes of market entry may be less and less available in the future.

Without these four coordinating activities the risk of failure is increased. The three main ways are by direct or indirect export or production in a foreign country see figure 7.

Market Entry Strategies

One may be to concentrate on a few segments in a few countries - typical are cashewnuts from Tanzania and horticultural exports from Zimbabwe and Kenya - or concentrate on one country and diversify into segments.

This has often led to a "rebellion" against the operations of multinationals, often unfounded. Some companies will never trade overseas and so do not go through a single stage. Pavord and Bogart2 found significant differences with regard to the severity of exporting problems in motivating pressures between seekers and non-seekers of export opportunities.

Costs include search and bargaining costs. Licensing Licensing is a relatively sophisticated arrangement where a firm transfers the rights to the use of a product or service to another firm. For example, the Grain Marketing Board of Zimbabwe may export grain directly to Zambia, or may sell it to a relief agency like the United Nations, for feeding the Mozambican refugees in Malawi.

Indirect methods offer a number of advantages including: Direct exporting is straightforward. In marketing products from less developed countries to developed countries point iii poses major problems.

International Agents and International Distributors Agents are often an early step into international marketing. Essentially the organization makes a commitment to market overseas on its own behalf. Exporting Exporting is the easiest, most cost effective and most commonly used method of entering a new international market.

It may get involved not just to support a specific commodity, but also to help the "public good". Countertrade can take many forms.

With a monopoly export marketing board, the entire system can behave like a single firm, regulating the mix and quality of products going to different markets and negotiating with transporters and buyers. Although working with distributors provides you with access to established markets, you have minimal control over the way distributors deal with customers or market your product.

More Exporting There are direct and indirect approaches to exporting to other nations. In the past a number of tractors have been brought into Zimbabwe from East European countries by switch deals. Joint ventures are usually an alternative to building a wholly owned manufacturing operation and offer benefits such as: Contact ISS to find out if Franchising or Licensing are the right market entry methods for your business.

It built a large freezing plant for vegetables but found itself without a contract. For example, an overseas company may agree to build a plant in Zambia, and output over an agreed period of time or agreed volume of produce is exported to the builder until the period has elapsed.

To improve your chances of success in key export markets, prepare website pages specific to the territory.Strategies for Entering Foreign Markets. Print Reference this. Disclaimer: In the following the different market entry strategies will be described and advantages and disadvantages will be shown.

A company has to clarify when they want to enter into a new market.

Ways for Companies to Enter the Global Market

Most times the decision for a strategy depends from the strategies of. Global strategies include "country centred" strategies (highly decentralised and limited international coordination), "local market approaches" (the marketing mix developed with the specific local (foreign) market in mind) or the "lead market approach" (develop a market which will be a best predictor of other markets).

Modes of Entry into International Markets (Place) How does an organization enter an overseas market? Background.

Market Entry Strategies

In making international marketing decisions on the marketing mix more attention to detail is required than in domestic marketing. Certain characteristics can be identified in market entry strategies which are different from the marketing of say cars or television sets.

Modes of Entry into International Markets (Place)

Often processors enter into contracted outgrower arrangements or. Small businesses can enter the global market by selling directly to customers in export territories, marketing products through a local distributor, participating in a.

Modes of entry into an international market are the channels which your organization employs to gain entry to a new international market. This lesson considers a number of key alternatives, but recognizes that alternatives are many and diverse.

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Different strategies to enter into international markets
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