Global Market Entry

Global Market Entry

Exporting

Exporting the product is one of the ways to enter the global market. Since sanitized doorknobs are an innovation that might prove valuable to many, directly exporting to potential markets will be low risk but high return venture. Agents will be employed to be the face of the product. Their duties are to source for orders from interested parties, which are directly serviced from the production company. The success of the product in one market would form the basis of marketing and supply to other direct referrals. Once the local market is saturated with the product, exporting is also a way to clear existing products that remain before venturing into more production.

Direct Investment

Direct investment is a way of expansion that follows high market demand. The direct investment would involve investing in a production plant, and marketing^ supplies office in an international location. Direct investment has a high initial cost but proves convenient, especially when faced with large scale orders. The company will consider having a hub per continent to start with, then expand according to demand and supply logistics. This method is risky and capital intensive, which means an elaborate market survey and risk assessment will be necessary before adopting it.

International Contracting

Also known as franchising, the company could go into a contract with a local company of their chosen international market. The licensing agreement allows the local company to act on behalf of our company to manufacture, market, and sell the product in exchange for an agreed percentage of payment. Such an arrangement is beneficial as the company obtains an inexpensive way to have a production and marketing branch in the new market area. The risk involved is in how to ensure that the franchise maintains product quality and customer satisfaction. It is, therefore, essential to select a trustworthy company to go into a franchise agreement with..

Joint Ventures

A joint venture involves going into a partnership deal with a selected company in the target country. In this case, the partner company invests, shares control, and ownership of the branch of the company opened up in their country. The partner company also provides access and insight into the target market and asset ownership. The partnership can then set up a production plant and have a fully-fledged office that handles the marketing and supply of the product. Joint ventures are beneficial as they make it easy to expand further into new territories within the region. The risks and profits incurred in the process of production, sales, and marketing are shared according to the share percentages of the partnership deal.

Standardization and Adaptation of Product

To begin with, the company could choose to venture into the global market scene using a standardized product. This strategy involves the creation of only one type of product and releasing multiple copies of the same design to the new market. The risk involved in this strategy is low in terms of the cost of production. However, there is a high risk of experiencing little customer satisfaction with the product. Product adaptation can be used, especially in the case of the franchise and joint ventures, where the product is created to adapt to the preferences of the new market. In areas where there is a production plant, creating a customer-oriented product might be more affordable than producing them at the mother factory.