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Market Entry Strategies image
Yani Castro…
Market Entry Strategies 
Yani Castro
Exporting
Pros:
Easiest, most cost effective, most commonly used. Requires less investments and allows a company to 'try it out'.
Allows single location concentration = better economies of scale and quality control.
Agents and distributors represent them in the market.
Cons:
Agents and distributors represent your interest, they become the face of the company.
Buying a Company
Pros:
May buy competitor, established business, benefits of local market.
Cons:
Most costly, requires substantial due diligence, inherit problems.
Franchising/Licensing
Pros:
Simple and quick to implement, minimal business cost, rapid market expansion, good if you have reputable market brand. Access to a market that may otherwise not been available due to governmental polices.
Cons:
Must have unique business or strong brand recognition, might create your own future competitor. Significant lower revenues, lack of control over the business and marketing.
Partnering
Pros:
Necessary when entering foreign market, sometimes required, Brings area specific expertise.
Shared responsibility and accountability, common interest in success of business.
Cons:
Shared liability and cost, difference of business philosophies and strategies.
Joint Venture
Pros:
A third company is created by two unique 1+1=3, shared risk, better control over production, marketing and other business operations, better market intelligence.
Cons:
Shared profits, compromise on business strategies and operational guidelines.
Turnkey Projects
Cons:
No real input, subject to third party discretion.
Pros:
Built from ground up and turned over ready to go, plant is operational, low risk, often financed by international agency so there is no risk of not being paid.
Greenfield Investments
Pros:
Your land, build facility, operate the business on an ongoing basis.
Cons:
Highest risk, most costly, governmental,technological and labor challenges.
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