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The Right Market Entry Strategy
All companies are usually greedy about industry expansion. In order to achieve this aim, the
companies test to enter new markets. The companies embrace different market admittance strategies
depending available on the market potential, the assets the company invest in, the expertise and
experience of the actual company, the trade obstacles, the competition in the market and lots of other
decisive aspects. Let take a review of some of the particular entry strategies the companies resort to
while entering the actual markets.
1) Direct exporting: This is really a basic level of market entry largely considered by small-scale
industries as it is less capital extensive process. In this strategy the particular company sets up the
agents in the host country and the purchases are done via these agents. The particular agents are sales
persons of the actual company. The drawback would be that the final price will probably be higher
because of direct selling and also the awareness of the product will be a smaller amount because of
the absence of marketing and advertising activities, click here.
2) Licensing: The companies with a mental property can resort to this type of strategy. The certified
product could be any manufacturing process, any technology or certain rights. Licensing is completed
with a licensing agreement which requires various details like the tenure, the pricing policy, the share
of the revenue and the kind of product that will become licensed
3) Franchising: This form of strategy is getting popular as more and more global brands are searching
for expansion. For franchising the company needs to have a robust brand recognition as well as the
products/services must be global in nature. There are issues with this type of strategy. Firstly you
create your own competitor by teaching the franchisee the actual ways to operate the business in the.
Also in order to maintain brand status the companies require to provide a common service across all
the particular franchises and this calls for hands on management a which is hard to implement and
will come at accost
4) Joint Ventures/Partners/Strategic Alliances: Any JV is collaboration which results into formation of
next independent company which is thought to be an independent entity on its own. Partnerships can
become both formal or perhaps informal. It is dependent upon the legal agreement between the firms.
Strategic confederation is a effort between the companies. The alliance could be for certain routines or
rights related to marketing, production, distribution or any other processes
5) Foreign Direct Investment: FDI requires purchasing a local firm or building another in foreign
market. Unlike FII, foreign Direct investments are lasting investment and profit the economy and
industrial growth of a region. The company owns the functioning and is fully control of the procedure.
But this marketplace entry strategy involves huge risk as well as investment and companies perform a
earlier risk assessment before investing. The particular political and economic stability of any nation
also wants to be accessed when considering any decision on foreign direct investments
Apart from the above mentioned strategies there are different ways in which a firm enters a market eg.
turn key projects, piggy financial. Depending on the aim, the resources and also the stature, the
company selects the proper strategy which will suit it to achieved its goal.
For more information about Market Entry Strategies visit us