Strategies for entering into Foreign Market.
Strategies for entering and competing into foreign markets are presenting in a chronological manner:
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Using domestic plants for the production base for exporting goods into foreign markets is an excellent initial strategy.
Licensing the technology or the production right to foreign-based firms, the firm does not have to bear the cost and risk for entering the foreign markets, yet it is able to generate income from royalties. The big disadvantage of licensing companies is the risk of providing valuable technology, monitoring also difficult.
Strategies for entering into Foreign Market
Franchising is based on a marketing concept that can be adopted by an organization as a strategy for business expansion. Where implemented, a franchisor licenses its know-how, procedures, intellectual property, use of its business model, brand, and rights to sell its branded products and services to a franchisee.
Franchising has much the same advantage as the licensing strategy, the franchisee bears most of the cost and risk in establishing firms at the foreign locations; a franchiser has to expand only the resources to recruit, train and support franchisees. Mc Donald’s, KFC, Hilton. The big problem the franchiser faces is maintaining quality control; actually, the foreign franchisees do not always exhibit a strong commitment that may also due to local culture, religion, norms, etc.
Strategies for entering into Foreign Market
Use strategic Alliance or Joint venture with foreign companies as a primary vehicle for entering in foreign Market.
The more diverse the national market conditions are, the stronger the case for a multi-country strategy where the company can tailor its strategies to fit each host country’s market condition.
Using essentially the same competitive strategy approach for all the countries. Global low-cost, differentiation strategy, etc. If you look at or consider the financial market aspects, implementation costs will depend on the size of the project.