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Entering new market abroad (Threats (Lack of knowledge - not know the…
Entering new market abroad
Opportunity
wider choice of locations to produce goods - good knowledge of market
improved and cheaper travel and communication links makes whole world accessible
home markets might be saturated - new markets abroad give the chance to boost sales
Greater growth potential than existing market
trade barriers have been lowered in many parts of the world - makes it easier and more profitable to enter new markets
Threats
Lack of knowledge - not know the habit of the customers in new markets
Cultural differences - some products may not be suitable to sell in the new markets
Exchange rate changes - products can become expensive to sell in the new market
Import restrictions - tariff or quotas on imported products
Increased risk of non-payment - method of payment may be different
Increased transport costs - due to long distance travel
Methods to overcome
International franchising-training and support will need to be provided by franchisor
Locaising existing brands-expensive to packaging,promotion and so on for each market the product is sold in
Licensing-quality problems cause by an inexperienced licensee could damage brand reputation
Joint ventures-management conflict between two business
Examples of successful international business
Apple
Coca Cola
Apple
Coca Cola
Examples of failed international business
Wendy''s
Burger King