ways in which a country enters a foreign market

 ways in which a country enters a foreign market

There are a variety of ways in which a country enters a foreign market. Direct exporting  is one of the most appropriate strategic  way of a country to enter a while other need a set up joint venture to be able license their marketing. For a country to influence the choice of strategy involve a number of factors .These factors would help increase the country’s cost that is then expected to increase the sales of these cost. This helps the organization to make a decision which makes  the country have a variety of option that vary in cost, risk and the degree of control that it exercises. Other countries uses complex forms that include global operations which involve the export market zones .The decision of which form of of export strategy the country to use depends on the nature of channels the country uses. Most of the channels are the government, distributors and agents.

Factors that influence the strategy choice.

Strategy entry in  the foreign market is influenced by a number of factors .these factors influence the main entry option .Direct exporting which involve selling directly from the market is chosen as the first choice. Many companies ,once they establish a marketing forum choose agents and distributor to represent them in the market. These agents hence work best to representing in the best interest at work. Licensing is another firm choice that involves use of sophisticated arrangement to transfer its goods and services. Licensing is good for marketing firms and production. In large markets like the North America uses franchising choice which involve expanding the market .In franchising involve that the country should be more unique in production thus good in creating the companies competition.

Partnering is also necessary to entering markets to foreign markets. These involves the co marketing arrangement which involve the sophisticated strategic  alliance to manufacturing. Joint venture is another particular form that involves companies working together and share risk and profits. Some other countries and companies involve turnkey project to which would provide with services such as environmental  consulting ,construction , engineering and architecture services. Countries  chooses to make decision to the best choice of influence to reduce  the risks and cost to selling their products domestically and to the larger firm or countries selling them internationally.

Global marketing recommendation

Global marketing is undoubted a great concept. Leveraging market to foreign market seems more beneficial to countries as it saves resources  and efforts ,ensures a high degree of constituency in between countries market and activities. Global marketing work in countries driving synergies and economics to scale while preserving the local needs and cultural considerations. However ,not all marketing should be driven to the centre as marketing approaches the key success. Marketing forces should then consider the tips to a balanced approach in success to global marketing.

First ,the firms have to consider what is driven globally and managed locally. This is because global marketing does not mean the absence of local market specific plan and initiatives. The global market thus set some parameters to which local market operates and giving in freedom to control them.another recommendation is that ,global market should understand the local market needs and and develop a collaborative approach. This is because oprating globally is always seen as an excuse to avoid spending time with local customers ,behaviors and less successive markets. Therefore ,global team need to develop an  understanding  the local markets and establish a close relationship with their needs. Also local markets need to develop and socialize with the global market firms .this is an urge that they should not wait for a campaign to begin validating assumption .socializing their plans with the international team ,seeking their feedback ensure that no legal terms prevent them to marketing and working with the firms.

Local markets should to trust and adjust in real time .While running a campaign with the multiple markets, means that should be disciplined .these would help the local markets to have well defined goals that would help maximize in the global marketing. Communication  is also important in with the global firms. The most crucial part element that makes global marketing work is the relationship that firms establish in within the markets. Open communication is thus important in nurturing these relationships. With this recommendations ,means that global marketing requires a some efforts that have a number of benefits. More obviously it ensures your marketing strategy is applied consistently across territories that allows firms to operate more effectively through the economies of scale. Through a deeper understanding of firms it allows them prioritize and optimize the efforts of and budgets effectively. Through global marketing many firms  learn from the test of many territories and leverages.

Factors to consider while entering a new market.

Most companies imperative market their products and services outside their domestic market. Companies thus should be more wise in selecting to where its market would be successful. In considering these they should consider  some factors such as;

Economic factors :most of countries would not be attractive to some companies . these is through companies considering that countries cannot afford their products that they market and refrain to the markets. For example india is a middle class country as compared to US where if the US company assumes to invest with Indian country to its product ,it would make strategic blunders. To avoid this blunders companies need to be deliberate about the economic potential of markets before investing. However expensive company product would always be customers that would need it and thus can afford to pay for it.The  product would not be viable to small market .The company therefore should expole  to creating an iftastructure of the product to small countries. Most of the western countries realizes that their growth result huge market due not  to the products they are selling but due to sophisticated less prices..An entire new market set up should the be set up to marketing and manufacturing  and established to serve as market. This makes it risky but a better option than serving the their world country market with the old portfolio.

Beside the country looking at the ability of the customers to pay for the product, they should access the economy stability and condition of the country to where it plans to running its operation. studying the country’s balance of payment ,GDP, currency stability and the trade patterns would give the company an idea about the economic prosperity and the well being of the country. These would be important to value the risk that would be associated with the country.

Social factors.

Some countries are different through the language spoken ,religion practiced and the food eaten. These differences are significant and marketers should consider how this differences can hinder in their marketing efforts if establish a new market. The products that are associated with how people live would be altered significantly and would find no acceptance .Marketing also seems to be altered with this changes and have to tailor these differences to enable suit in these social cultural factors. Companies should thus set a group of anthropologist and sociologist to these new markets before sending its markers and developers.

Some marketers  thus tend to sell their products to people that tends to be culturally similar to the countries that they market.This creates the markets to differences in the socio-cultural differences to ineract  and adapt to them.

Political factors.

Companies considers the attitude of the government and the peple of the host company .it is thus important for a company to study the history of the country toward foreign investment and and properties. Companies should thus maintain patience with the country’s interest that would help demonstrate a long term interest among the products they are selling .subsidies ,government streamlined procedures, and incentives of a government to welcoming wiling partners to be its partners. Political stability and attitude towards foreign exchange is also a good indicator of encouraging companies participation. Change in the government policy is spell the difficulties of the profitability potential of a firm.

Companies and firms should then access the tax structure and other legal systems and procedures before starting operation to the target country. As many developing countries are not stringent ,firm find it hard to implement and file terms that enforce their policies and contracts.

Strategies of alliance

Firms and business mutual benefit from an alliance that forms In between the countries. Firms combine their efforts for variety of purposes that include sharing knowledge ,expertise and expenses  and as well gain to new markets as well as competitive advantage. Strategic alliance also turn to actual and potential competitors over a common goal to which they are working. These have thus become a major  toot to which business are internalizing.

Most of strategic alliance is in a form of joint venture which form from two or more business venture work together to forming a new business. The most kind of this venture is through subsidiary that creates a third entity with its own existence. Another form of venture is though acquisition that is created when one business purchases shares of the other .manger venture is also created when two businesses dissolve and incorporates to one serving entity.

Benefits of strategic alliance

The internet ,telecommunication, and improved system has  more helped more firms enter foreign market and  have created a big entry to the globalization of business. Decision of a firm to enter into a firm depends on the goals and needs of the country. Auto industry is an example of the industry that relies on strategic alliances. Auto industry relies itself in joint venture strategic alliance  industry  which it expands its business in the Latin America and Mexico. This began when the auto industry began to demand for complete spares from their suppliers in Mexico, and engineering was transferred between the suppliers and auto industries.

A strategic alliance eases the entry to foreign industry. Local firms provides the knowledge of markets, customer preferences, distribution networks and suppliers. Another benefit is that through strategic alliances ,companies share their risks this is because market develops common products ,shares expenses and minimizes the risk that would be involved in the two firms. Strategic alliance helps in gaining experience knowledge and expertise .There is a synergetic effect when companies contribute to brands ,market operations ,skills and assets. Also though strategic alliances companies form a competitive advantage which it uses as an advantage to favorable brands and image that is established in within the partners.

In marketing the products from less developed countries to developed countries there involve some problems. Most buyers in the interested developed countries  as they are perceived by problems such as transport ,currency, quality and quantity. Technology is a major issues in the their world countries and thus faces more challenges in marketing their produce.

More of the third word countries produces agricultural commodities, mining .the interlink between the market entry is more enormous in less developed countries that goes beyond to scoping some private organization and government involving. This gives investors to paying a high risk price before utilizing and investing. Thus in building a market entry is one crucial factor that helps these countries to building intelligence ,creating new images through promotion. Less developed thus developed the marketing mix that was involved in factors .Most of the companies make ways that finds the right pitch to their products.

In expanding the marketing products it is important to note the product line and the geographical area that would be expanded by the business management. New markets can be available but if the advantages outweigh the risks .these advantages of exporting in local industries are, they are less risky manufacturing at home that over the foreign investment. They have an opportunity to learn through the markets and also it reduces the potential risks of operation of their products.

When faced in a strategic alliance small business are hesitant to opportunities as many business owners  keep this to partnership this is more because ,they feel as if large firms are coming to take their own businesses .Their main concern is the loss of ownership to the business, loss of executive control over the project, strategic alliance being to high for small business owners. This makes these small business to enter into an alliance that would help in distribution channels , manufacturing capabilities , funding and the intellectual gain property.

These help the small business to benefit from large market through knowledge and resource sharing , pooling resources help then to meet their market share ,gain market attractiveness and the knowledge share which include the marketing skills. Most of small firms are also able to sustain an opportunity to growth and sustain them to the upper ceiling like the shareholders. Economies that pool their resources and allow each other to increase manufacturing and distribution  they reaches to the economies of scale.

When an organization makes the decision to entering the oversees market ,it makes a variety of options to open through it. This option of the country’s entry vary in the cost ,risks ,and the degree to control this  that is exercised through them. These organization is faced in a number of issues that include marketing ,sourcing  ,investment and control. In international marketing, decisions on marketing mix more attention on the details that are required in the domestic  marketing. Some of the elements that are included in eport marketing mix are  the product support, price support, promotion, distribution support, service support and the financial support.

For a firm to be competitive enough to enter  in foreign markets it must first consider the its competitive strategies which fall under the product ,pricing ,distribution, promotion and the advertising. Also the market should be considerate on the risk of the firm ,government support ,economic background  and  communication factors .For example to countries like Kenya and Zimbabwe they that mostly concentrate on the European markets for production of horticulture .In the latter of their marketing they make globalization in the foreign markets and thus matching their produce where the risk comes in. They thus share the economies of scale ,sharing the costs and risks between the markets.

Exporting as an entry strategy was more traditional form of operation that is well established in operating of foreign markets. This is due to the marketing of goods that is produced by one country to another. While no direct marketing is required, investment  and marketing is done in the foreign coutries.Lack of control to these products have been a challenge. These creates a distinction that draws for passive and aggressive exporters.

Most countries that involve direct exports uses some organization agent ,subsidiary, or the government agencies as in the Zimbabwean grain marketing board which is commercialized by the government control as a government agency. One of the problem in direct exports is the marketing information as the role of an exporter is to choose a market, find a representative , set up the distribution and promote the price of that product. Without this coordination activities there would be increased risk of failure.

Challenges of entry strategies.

Lack of information In the exporting industries.

Difficulty in setting prices and service quality

Inconsistency of delivery and specification difficulty in currency trading

Limited form of participation to lengthy agreement, specific product process and trademarks.

Limited of full management control

Disagreement of third countries market to serve.

Some of the strategies that firms should use in the entry to new markets are

Technical innovation strategy which is perceived and demonstrated to superior products in the foreign markets

Product adaptation strategy that involves modification to existing products.

Availability and security strategy which the country uses to overcome risks by countering perceived risks

Low price strategy for the penetration prices

Total adaptation and conformity strategy that gives foreign producers a straight copy of the firm

In the market entry to foreign countries should thus consider the distintion among the country market factors in form of size ,growth rate ,the buyers and distributors .As indicated in the methods of enrty to foreign countries ,countries should thus consider all the factors and  put them to research.Countries should also consider on the strategical ways that they should use to creating alliances. This would more help in gaining of knowledge ,share the risks ,increasing in competitiomn of produce and more. Through this the company would be capable of making the good terms and meeting the goal in production and manufacturing as well as mututual benefit. Trough the creation of alliances ,companies shoul also have a clear understanding of the economic ,social and political environment of the target countries that they tend to venture .This would help in reducing the risk in between those countries.