Choosing the correct Market Entry Strategy All companies are greedy about industry expansion. In order to achieve this aim, the companies try to enter new markets. The companies adopt different market accessibility strategies depending in the marketplace potential, the assets the company invest in, the expertise as well as experience of the particular company, the trade barriers, the competition in the market and several other decisive aspects. Let take a glance at some of the particular entry strategies the businesses resort to while entering the actual markets. 1) Direct exporting: This is a basic level regarding market entry largely considered by small-scale industries as it is less capital intensive process. In this strategy the actual company sets up the particular agents in the host country and the dealings are done via these agents. The actual agents are sales persons of the actual company. The drawback is the final price will probably be higher because of direct selling and additionally the awareness from the product will be much less because of the lack of marketing and advertising activities, click here. 2) Licensing: The companies with a mental property can resort to this type regarding strategy. The licensed product could be the manufacturing process, the technology or particular rights. Licensing is completed with a licensing agreement which involves various details like the tenure, the pricing policy, the share with the revenue and the sort of product that will become licensed 3) Franchising: This kind of strategy is acquiring popular as a growing number of global brands are looking for expansion. For franchising the company needs to have a strong brand recognition and the products/services must be global in nature. There tend to be issues with this type of strategy. Firstly you create your own competitor by training the franchisee the ways to operate the business in the. Also in order to maintain brand popularity the companies need to provide a regular service across all the particular franchises and this requires hands on management a which is difficult to implement and arrives at accost 4) Joint Ventures/Partners/Strategic Alliances: A JV is collaboration which results directly into formation of third independent company which is regarded as an independent organization on its own. Partnerships can be both formal or perhaps informal. It depends on the legal agreement between the particular firms. Strategic confederation is a effort between the organizations. The alliance could be for certain activities or rights associated to marketing, production, distribution or any other processes 5) Foreign Direct Investment: FDI requires purchasing a local firm or building another in foreign market. In contrast to FII, foreign Direct investments are long-term investment and help the economy and industrial growth of a country. The company owns the functioning and is fully control of the functioning. But this marketplace entry strategy entails huge risk and investment and organizations perform a earlier risk assessment before investing. The actual political and economic stability of the nation also wants to be accessed when considering any decision on foreigh direct investments Apart in the above mentioned strategies there are different ways in which a firm enters a marketplace eg. turn key projects, piggy financial. Depending on the aim, the resources as well as the stature, the company selects the appropriate strategy which will suit it to achieved its aim.
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