INTERNATIONAL MARKET ENTRY STRATEGIES - Coggle Diagram
INTERNATIONAL MARKET ENTRY STRATEGIES
Individual business owners pay you a fee to use your branding.
Good: Easy way to break into new market and open doors.
Bad: Usually comes with compromises, must deal with individual franchisees.
Simplest market strategy: very similar strategy to selling in a domestic market.
Good: Simple methodology allows you to reuse existing strategies.
Bad: The simplicity of direct exporting allows you to easily be out-competed by other brands with better strategies and domestic sellers in your target nation/market.
Rather than relying on your own brand, find partners in a foreign domestic market to help you sell.
Good: If you have good connections, creates a strong "in" into the market which you're targeting with minimal risks.
Bad: Strategy relies entirely on your ability to maintain a connection with a partner. Anything negative that occurs to your partner will affect your business.
Unlike a partnership, a joint venture is a temporary effort between two or more companies in a single large project. Usually profits are split equally and the companies stay separate, but work together for the duration of the project.
Good: Many of the same benefits as a partnership but with less risk of entanglement with another company's problems. Combined resources of two companies provide much more ability and flexibility.
Bad: Still dependent on the performance of another company. There is a risk of company/trade secrets being stolen or accidentally revealed, the relationship between the companies souring, etc.
Purchase Foreign Company
Purchasing a foreign company provides an accessible and simple route into a foreign market with an already-existing brand to use.
Good: Quick way into a foreign market, provides known branding and preexisting connections.
Bad: Must have capital to purchase foreign company. Problems of company are inherited and will need to be remedied or compensated for by the new parent company.
Turnkey projects are projects a company bids on (usually government contracts) to build something from the ground up, such as a major construction project, etc.
Good: Great way to break into a foreign market, turnkey projects are generally very secure and profitable.
Bad: Because turnkey projects are usually highly desirable it is difficult to land one, especially for a foreign competitor/firm.
Piggybacking is essentially asking your domestic business partners who have an international presence to market your product overseas (probably at a markup so they can make money).
Good: Minimal risk, easy way to break into foreign markets if successful.
Bad: Relies entirely on domestic market relationships; domestic partners may not be willing or may do a poor job of representing your product, etc.
With the licensing strategy, you allow foreign companies to "own" your product for a limited time, giving them exclusive selling rights to a product your create.
Good: With a great product, provides a minimally risky way to enter a foreign market and create brand recognition.
Bad: Must find and deal with any negative aspects of licensees. Must work through legal/regulatory issues involved in licensing.