Market entry strategy for entry into
First, mature products in a domestic market might find new growth opportunities overseas.
Coca Cola is an excellent example of licensing. If the firm achieves initial success at exporting quickly all to the good, but the risks of failure in the early stages are high. Control, or the lack of it, is a major problem which often results in decisions on pricing, certification and promotion being in the hands of others.
International market entry strategies pdf
Finally, some firms might export because there is less competition overseas. Towards the end of Nali chilies were in great demand, yet still the company, in its passive mode, did not fully appreciate the competitive implications of the business until a number of firms, including Lonrho and Press Farming, started to grow and export. Pros Cons It's a low-cost, low-risk mode of entry into new markets allowing you to use the cultural knowledge and know-how of local managers. Countertrade A countertrade is a form of exporting where goods and services are paid for in full, or in part, with other goods and services. A typical coordinated marketing channel for the export of Kenyan horticultural produce is given in figure 7. Bodies like the Horticultural Crops Development Authority HCDA in Kenya may be merely a promotional body, dealing with advertising, information flows and so on, or it may be active in exporting itself, particularly giving approval like HCDA does to all export documents. Integrated channels offer the advantages of planning and control of resources, flow of information, and faster market penetration, and are a visible sign of commitment. Piggybacking Piggybacking is a particularly unique way of entering the international arena. Useful resources Our Access Program provides assistance for Victorian businesses planning to establish new export markets in key countries and regions. Generally no middlemen are involved. Countertrade is the modem form of barter, except contracts are not legal and it is not covered by GATT.
Barter trade can take a number of formats. Export trading companies usually provide support services such as distribution, warehousing, shipping, billing and insurance.
Partnering is a particularly useful strategy in those markets where the culture, both business and social, is substantively different than your own as local partners bring local market knowledge, contacts and if chosen wisely customers.
If the partners carefully map out in advance what they expect to achieve and how, then many problems can be overcome.
Market entry strategies advantages and disadvantages
A systematic assessment of the different entry methods can be achieved through the use of a matrix see table 7. Agents and distributors work closely with you in representing your interests. For example, if you want to sell to Japan, you get your product into the appropriate Japanese stores and see how it does. Two caveats are required when considering using the franchise model. Export earnings have tripled from to and the added value has been significant- The roots of success can be seen on the supply, demand and institutional sides. One of the best examples is the Mauritian EPZ12, founded in the s. Countertrade can take many forms. Third, firms that face seasonal domestic demand might choose to market their offerings abroad to balance out seasonal demand in their revenue streams. Although one of the fastest and most profitable ways to expand your business to foreign markets is to use licensing market entry strategy, it also has its risks. This can be done through joint ventures with the licensee.
Export earnings have tripled from to and the added value has been significant- The roots of success can be seen on the supply, demand and institutional sides. The basic philosophy behind stage one is extension of programmes and products, behind stage two is decentralisation as far as possible to local operators and behind stage three is an integration which seeks to synthesize inputs from world and regional headquarters and the country organisation.
Usually, the two companies stay separate from each other, but work together on one particular venture to try and succeed. You immediately claim market share You have an existing customer base and brand image Even if the government has regulations on the industry for newcomers, you can bypass them with relative ease and these rules and regulations will actually help you by keeping competition low Governments will still treat you as a local firm in most cases in regards to licensing and such Of course, there are downsides.
In the early days knowledge of the market was scanty and thus the company was obtaining ridiculously low prices.
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