Advantages and Disadvantages of Market Entry Strategies
Advantages
Disadvantages
Technical Inovation Strategy
Advantage: The company has either a truly superior products or can convince the customer that they do.
High level of technical service can also be included in this strategy.
Product adaptation strategy
Advantage: Modification or changes are made on the existing product so that it suits different types of customers or markets.
This adaptation strategy is most suitable and necessary for those companies that export their product in the new foreign market. It ensures that the product meets local cultural and regulatory requirements.
Helps to minimize the funds and resources to develop a new product.
Low price strategy.
The pricing strategy where a company offers a relatively low price to stimulate demand and gain value in market shares.
A company usually employs this strategy where the product has few or no competitive advantage or where economies of scale are achievable with higher production volumes
Availability and security strategy
The company is able to overcome the risk of transportation in two ways.
The first one being providing all the services like delivery, installation, service and security, the second one is by convincing the customer they are not important.
Total adaptation and conformity strategy
The foreign producer takes a holistic approach to do everything that the customer might need in terms of product, handling, development and delivery.
Needs a high degree of inter-functional cooperation within the supplying company as well as a strong customer orientation.
Technical Inovation Strategy
Disadvantage: The old technologies and techniques are left behind and it becomes a challenge to protect them.
People have to change their lifestyle in order to get compatible with it. Ones way of thinking of it changes.
Many rituals may get lost.
Product adaptation strategy
Selling one unified product lacks uniqueness
Allows competition to gain market share through tailoring their products to meet the need of a specific market/segment.
Higher cost and difficulty knowing what the consumer really wants.
Low Price Strategy
Total adaptation and conformity strategy
Availability and security strategy
Competitors can be beat your "Bottom Price" and steal most of your customers because of it
Hard to introduce higher price items because store will be known for "Lowest Prices"
People question the quality of your products being at such low prices.
Total adaption takes away from uniqueness and creativity, making your brand your brand. To customers adapting items and ideas makes you the same as everyone else.
Having products ready and available extremely early will have customers thinking anything less is poor customer service.
Security strategy can break down, being a disadvantage to the customer because their information will no longer be safe and secure.
Conforming to competition only becomes a price war, customers can get what you have at a lower price because there is no uniqueness in your products.