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INTERNATIONAL MARKET ENTRY STRATEGIES - Coggle Diagram
INTERNATIONAL MARKET ENTRY STRATEGIES
Franchising
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.
Direct Exporting
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.
Partnering
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.
Joint Venture
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
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
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.
Licensing
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.