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International Market Entry Strategies, Advantages, Disadvantages, Process…
International Market Entry Strategies
Buying a Company
Purchasing a company already a part of the countries business can immediately provide the purchaser with the status of being a local company and qualify them for local market benefits, and a pre-established customer base.
Turnkey Projects
Having property ready-to-go is a huge advantage for clients wishing to enter a foreign market. turn the key to the building and the business can start, no additional construction is required
Piggybacking
Approaching larger companies that are already large domestic firms involved with the chosen country and asking the product be taken international can result in much lower international trade confusion as well as having an established "big brother" in the desired country.
Joint Ventures
Having a company already embedded in the foreign country can help improve relations while also serving as a filter for any mistranslations.
Partnering
Useful if the country the client wishes to conduct business in is quite different than the market they are currently in. Aids the client in building a relationship with the foreign country. Almost a necessity for new clients breaking into the international market.
Licensing
Useful if the purchaser of the license has a larger market share and can help clients get their product internationally because the purchaser of the license will already have a local relationship with the selected country.
Direct Exporting
Client hires an agent from the foreign country to represent them and become the face of the company in the selected country. This serves the client with an agent who understands the countries policies and will sell the clients product to customers in the selected country.
Franchising
Particularly useful for businesses that are food-related. Allows for rapid market expansion for businesses that are easily replicable elsewhere. Allows rapid expansion and creates a stronger brand.
Greenfield Investments
Client would own the land, facility, and operate the business at their discretion. Owning the building as well as the land beneath it will serve as an anchor in the country and a solid facility owned by the client.
Greenfield Investments
Most costly method of international market entry due to client purchasing the land as well as the facility on the land. Risk government regulations, transportation costs, as well as access to technology and skilled workers.
Joint Ventures
Profits are shared between the 2 adult companies that are earned by the newly-created company.
Piggybacking
Client would become a "little brother" to the "big brother" company they are working with internationally. International company might crash or conduct business in the foreign country not to the clients standards. Serves as a way to lower costs, but should be temporary, not permanent if the client wishes to have their own facility on foreign land.
Partnering
May be required in certain foreign markets (such as Asia). Clients has to build a relationship with a client in the international market and coerce them into partnering to conduct business. May be costly for new client.
Licensing
Client transfers rights to a new client which could result in product manipulation over a period of time and eventually the new client could phase the previous client out.
Direct Exporting
Employing an agent that doesn't live up to the clients standards could result in lower sales as well as a tarnished brand-name in the country. Hiring the agent can be quite costly and time consuming researching and interviewing potential agents.
Turnkey Projects
Usually environmental consulting, architecture, construction and engineering businesses, mostly government businesses that are funded by businesses such as The World Bank. might be tougher to get a turnkey building as a non-government business.
Franchising
Business model should be either unique or easily recognizable in the foreign market. A brand needs to be easily recognizable for customers to consider purchasing from them because they are already well-known in their home market. May lead to additional competition among franchisees.
Buying a Company
Quite costly for purchaser and requires extensive research in order to maintain the companies prior business before the buyout
Market Entry Strategies. (n.d.). Tradestart. Retrieved October 18, 2021, from
http://www.tradestart.ca/market-entry-strategies
Advantages
Disadvantages
Process begins with deciding a country to do business with
Sources