PRINCIPLES OF MANAGEMENT

Principles of Management (Market Entry Strategies)



Principles of Management (Market Entry Strategies)

Introduction

Strategically, market entry package is based on the relevant information in the right way, for the right customer at the right time. In a dynamic environment, position the product properly deal with demanding and changing criteria can only be achieved if company understand the needs of all decision makers involved in the whole process of evaluation, decision, positioning and product reimbursement. Several corporations have realized that the success of their company or certain segments of the company are based on effective planning (Wittwer, 2003, 487). A plan which outline how products and services of a company will be introduced to consumers, it is referred as market entry strategy. There are various effective market entry strategies available for organizations that have made decision to enter market. Choosing a market entry strategy is a tough and delicate decision that requires a thorough analysis. In this paper, we are going to discuss four market entry strategies that can be adopted by ABC business to increase its revenues. Every strategy has its own advantages and disadvantages. The purpose of this paper is to let readers know about the importance of market entry strategy for business.

Market Entry strategies

Following are some strategies that are main entry options for businesses:

Direct Exporting

Direct Exporting can be defined as the direct selling in the chosen market using. Several organization s turn to distributors or agents to represent them in the future market after the proper establishment of the sales program. Distributors and agents work closely with the company in representing their interests (Taher & Hanan , 2006, 331 ). This is perhaps the most simple and beneficial form of market entry type. Since it is the simplest form of market entry it does not need any particular investment because it is very flexible. If we look at the other side of the coin it can be said that organizations adopting this entry strategy has very limited control over the functions such as distribution and marketing in the target market.

Licensing& Franchising

Franchising is a type of market strategy that involves contractual agreement in which companies transfer their intangible assets to international countries in return for payments or other royalties. Under this type of strategy a company uses successful business model of other company. There are 33 countries including Australia, and US that have laws regulating this strategy. Franchises actually lasts for certain fixed period of time and serves a particulate geographical or territorial areas surrounding its location. KFC, McDonalds, and Subways are good examples of franchising. A company under this type of strategy standardize process of working. In franchising entire distribution, production taxes, marketing, and material procurement is controlled by the main company (Steve, 2010, 518). For instance with the help of franchising strategy the company can rapidly expand its market with the help of franchisor' intellectual property. Franchise is different from licensing. It is a contractual agreement between two companies that give ...