MARKET ENTRY STRATEGIES

Market Entry Strategies



Market Entry Strategies

Introduction

The strategy of market entry is a planned process of distributing commodities or services to a specific market and distributing them there. In case of import and export, it is called creating and administrating contracts overseas. Numerous organizations effectively function in a niche market without discovering, or expanding their operations into a new market.

On the other hand some businesses accomplish improved sales by increasing their brand awareness and business stability as they enter a new market. Businesses should develop new market entry strategies in order to attain growth and success. Developing such a strategy involves a study of potential opponent who will also run their business as their competitors and possible customers. Factors that are significant in deciding the possibility of admission into a new market includes barriers in trade, competition, export, price localization and subsidies on export (Markman, 2011).

Types of Market Entry Strategies

So far there are six ways to enter a foreign market: Export Project "Turnkey", Licensing, Franchising, Joint Ventures and the Establishment of wholly owned subsidiaries.

Exports

There are advantages and disadvantages in the export process. On the one hand help build economies based on experience curve and avoiding costs related to establishing manufacturing operations in another country. While on the other hand, the disadvantages include cost, high transport and trade barriers, as well as problems marketing agents. Exported on behalf of the consortium, is responsible for setting export prices, physical distribution of goods, select and appoint distributors in foreign markets, obtain reports and participate in international trade fairs and other promotional activities (Lamont, 2002).

Provide SMEs the advantage of not having the need to expand its own organizational structure, has a more specialized service, fixed costs shared between the companies forming the consortium, are able to obtain grants, provide broader product ranges markets and have more negotiating power with agents and distribution channels. But what is certain is that there is the difficulty of finding suitable partners, as each company takes a portion of risks, can create internal competition between them and incompatibility between strategies of different companies.

At the other extreme, the foreign market intermediaries see agents or representatives in foreign markets. These, practice their profession independently and autonomously, is linked to the exporter by contract lasting and occasionally, promotes business and contact with customers, handles all customer service and operations performed at your own risk.

Direct regular exports are treated in a distribution network with vendors themselves. In this case the exported opens its own marketing channels and maintains itself a sufficient presence in the purchasing countries to serve their customers in a similar way as it does in the country of origin, this presence requires foreign investments and periodic travel, effort only justified by significant sales volumes and continuity in export activity (Markman, 2011).

Sporadic exports are referred to have been made at a point in time, without having the intention to have continuity in that market.

Regular indirect exports are a way to penetrate foreign markets without direct involvement in the complexities of ...