International Market: Market Entry Strategies



Market Entry Strategies

Introduction

Marketing is a diverse field which requires the knowledge and creativity in equal proportion. If a company wants to grow in a market, without having the knowledge of current market situation, then the innovative marketing strategy may not produce the desired results. It is vulnerable to failures. That is why it is important to gather knowledge of the market before attempting to enter it. Internationalisation of companies has been the most discussed topic in international marketing and business. The growth of a business determines whether the company is going to expand internationally or not (Anonymous, 2000, p.12). How do companies analyse the suitable market for their services and products? And how do they plan strategies to avoid market entry failures? These are the questions which are important for any growing business willing to capture markets across the globe. The companies expand their business in the local market and then grow into foreign markets. There are many factors influencing the decision of expanding a company's operations across the borders. International marketing is an art which requires careful design of strategies.

With the rapid globalisation, businesses are getting chances to run their operations across the borders. Today, people have much more knowledge of the situation in other regions than earlier days. Therefore, it becomes a little less complex now to target foreign markets. Companies develop market entry strategies to mark their presence in a target market (Dykes, 2010, p.59). A market entry strategy is the plan of distributing products and services in the target market. Target market can be local on international. This paper presents a detailed account on market entry strategies and the factors affecting those strategies. Here, we discuss objectives of market entry strategies and the reasons behind the failure. The write up begins with the thorough review of literature to establish the context for discussion and conclusion.

Discussion

Review of literature

With the increasing globalization of businesses, foreign markets are becoming attractive to companies aiming to expand their operations. In this regard, the time and situation of entry is of vital importance (Song 2010, p. 1). Licensing, franchising, Alliances, Joint ventures and wholly owned subsidiaries are some of the market entry strategies. The establishment chain Model explains gradual internationalisation from no regular export to manufacturing subsidiaries. The model explains that business firms gradually expand their business abroad. Initially, the companies aim to expand in domestic markets by attracting local customers to their services or products. Then gradually enter foreign markets to temp international buyers. The companies face a lot of obstructions which they should handle intelligently with their market entry strategy.

Two main obstructions are lack of market knowledge and resources. However, these two has been of major concern in the past. With the world coming on our finger tips, the process of collecting facts and figures is not difficult. Today, companies can access the market situation easily. The psychic distance is another obstacle in international marketing. Psychic distance does not refer to geographic distance in every ...