Companies can excel in this market space like the , whose are not sold in stores but rather distributed by an informal network of street vendors targeting commuters and pedestrians. In the more prosperous countries it is taken for granted that you can buy goods internationally and pay for them with such things as credit cards, debit cards, online payment processors and cash transfer businesses, but that is clearly not the case everywhere in the world. By moving internationally, corporations have the ability to increase demand for their products, decrease the economic volatility from their home market, and develop new customers. A turnkey project is where the facility is built from the ground up and turned over to the client ready to go — turn the key and the plant is operational. In addition, detail the staffing levels required to implement this international growth initiative. Joint ventures, mergers, and acquisitions It is entirely possible that companies trying to enter a new markets may not have adequate knowledge about the market. The less speculation, the better.
Strategic alliances are also advantageous for small entrepreneurial firms that may be too small to make the needed investments to enter the new market themselves. Business today is not limited to any geographical boundaries. Are there specific standards my product must meet in order to be sold? Turnkey Projects Turnkey projects are particular to companies that provide services such as environmental consulting, architecture, construction and engineering. Here are the eight strategies that you can use to establish a foothold in a new country. By choosing to license or franchise its offerings, a firm lowers its financial risks but also gives up control over the manufacturing and marketing of its products in the new country. Complete control over all activities of the firm.
When deciding whether to pursue an acquisition strategy, firms examine the laws in the target country. Most countries have an upper, middle and lower class, but the numbers of people in these classes can be significantly different from country to country. To minimize that risk, you need a structured and strategic approach to to ensure your limited resources produce maximum sales results. Firms must, however, have a way to distribute and market their products in the new country, which they typically do through contractual agreements with a local company or distributor. In some areas of the world, a partnership is a borderline necessity.
Even applying for export and import licenses is becoming easier as more governments use the Internet to facilitate these processes. Acquisitions An An international entry mode in which a firm gains control of another firm by purchasing its stock, exchanging stock, or, in the case of a private firm, paying the owners a purchase price. By understanding your target market and competitors you can develop your competitive positioning and know where to invest your business development resources. This practice is also a win-win for locals, who have the opportunity to sell to Walmart, which can increase their profits and let them grow and hire more people and pay better wages. The German market is decentralized and diverse, with interests and tastes differing from one German region to another. Selling to global customers through a website is suitable for products that do not require demonstration or explanation by a sales representative. Joint Venture A joint venture with a local business partner also provides the benefits of local market knowledge and contact.
In terms of marketing and promotion, the firm will need to let potential buyers know of its offerings, be it through advertising, trade shows, or a local sales force. Check local business and safety regulations to see if you need to modify your product, product name or packaging to comply with local legislation or cultural requirements. With its network of 108 offices across the United States and in more than 75 countries, the U. Investigate whether there is a clear and growing demand for the type of products or services you offer, and a base of potential clients with the interest and money to buy. Political and Legal Factors A. Market Research Market Research must provide you with the factual, comprehensive and up-to-date information you need to know before starting your push into the target market. Offshore sub- contracting This term covers many different relationships between independent companies in which the buyer is more involved with the source than in a simple buyer-seller relationship.
Franchising Franchising is another form of licensing. No one market entry strategy works for all international markets. Small businesses throughout the United States and other countries have gained international exposure and increased profits through exporting. Contracting Another of form on market entry in an overseas market which involves the exchange of ideas is contracting. Disadvantages of wholly owned operations are: They are costly in terms of capital and management resources; They may result in negative public relations; There always is the possibility of expropriation by the host government; and Lack of involvement of a national partner who might act as a bridge between the international firm and the country concerned. Laws There are laws in some countries that will greatly affect your ability to do business in them or prohibit it altogether. In this challenging global environment, the model of tthe business is not any more B2B, but H2H.
This enables exporters to foresee prior to making the investment of time and money that will be required for successful export-market development. China has many restrictions on foreign ownership, for example, but even a developed-world country like the United States has laws addressing acquisitions. Because the cost of exporting is lower than that of the other entry modes, entrepreneurs and small businesses are most likely to use exporting as a way to get their products into markets around the globe. Then, you need to convince them that it will sell. In the following chart, some of these approaches are depicted. The international market fuels the growth of many small and home-based businesses. Maybe your business is in construction or engineering.
They become the face of your company and thus it is important that your choice of agents and distributors is handled in much the same way you would hire a key staff person. Operation can be done in 2 ways 2. But there is still a substantial amount risk involved if you want to export or set up operations abroad. Normally, ownership is shared equally with a local company. Often selection at this stage is more straightforward.
Wholly owned subsidiaries are discussed further in. Buying a Company In some markets buying an existing local company may be the most appropriate entry strategy. In addition to your main English-version website, you need to have your website content translated in Spanish, Chinese or whatever language your target market speaks. It is tough to sell cheap merchandise abroad, particularly if they can produce your kind of products cheaply. An example of this is when McDonalds went into the Indian market, they did it with partners that knew the local business practices and customs; these companies were Hardcastle Restaurants Private Ltd which had a strong influence in western India, and Connaught Plaza Restaurants Private Ltd which were popular in the northern India. Export house is selling complementary products, sales might increase. Risks and profits are normally shared equally.