Market Entry Strategy-A corporate intelligence study Establish and maintain a distinctive corporate identity

Market Entry Strategy-A corporate intelligence study Establish and maintain a distinctive corporate identity

A market entry strategy is the planned method of delivering goods or services to a new target market and distributing them there. When importing or exporting services, it refers to establishing and managing contracts in a foreign country. Few companies successfully operate in a niche market without ever expanding into new markets but most businesses achieve increased sales, brand awareness andbusinessstability by entering a new market. Developing a win-win market entry strategy involves a thorough analysis ofmultiple factors, in a planned sequential manner.

When an organization makes a decision to enter a new market, there arevarious issues that needs to be thought out. These options vary with cost, risk and the degree of control which can be exercised over them. The simplest form of entry strategy is often exporting, using a direct (agent) or indirect method (counter trade). More complex forms include truly global operations which may involve joint ventures, or export processing zones.

Market Entry Strategies:

Going it alone

The strategy of "going it alone" refers to a decision to unilaterally enter another country without the aid of others. This is a risky strategy, as it means that you must have all the necessary resources for success within your own company. The fact is that the resources required for success can vary greatly from one country to another. Consequently, few companies can manage to enter a foreign market alone. It can be done more easily, however, when entering countries with less psychological distance between them and your home market. This is because countries with less psychological distance between them will have similar tastes, institutions and cultural norms.

Partnership

A partnership is a good choice when entering a market which you know little about. In the case of doing business in China, the Chinese government actually requires foreign businesses to partner with a Chinese firm. A local partner will give you access to a team of people who understand the local market, the customs,> and so forth. This means that you will experience a very steep learning curve and do not waste time and resources making mistakes in the new market. It is important, however, to have a partner whom you can trust and work with for mutual benefit.

Subsidiary

A subsidiary is a separate company that is owned by the mother company. Setting up a subsidiary in a foreign market gives you the advantage of being able to hire a local management team to operate the organization while retaining all the profits (as opposed to a partnership in which profits are shared).

Factors:

Many companies successfully operate in a without ever expanding into new market. Some businesses achieve increased sales,and business stability by entering a new market. Developing a market entry strategy involves a thorough analysis of potential competitors and possible customers. Some of the relevant factors that are important in deciding the viability of entry into a particular market include, localized knowledge, price localization,, and export

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