INTERNATIONAL MARKETING

International Market Entry

Strategies

Introduction
An international market strategy tells about the challenges
and requirements of small to medium size, company
entering this market and are uniquely positioned to help the
international entrepreneur to take the right first step.
It is believed that a solid market strategy requires market
research to validate the opportunity and see what the
characteristics of the potential clients look like. After
working with they understanding where the company fits, it
develops a market entry strategy that fits the company
objectives and budget.

Factor Affecting the Selection of

International Entry Strategy
1) External Factors
-Market Size
-Market Growth
-Govt. Regulations
- Physical Infrastructure
2) Internal Factors
-Company Objective
-Availability of Company Resources

Methods of Entry
The major entry strategies adopted by firms in order to go
international can be broadly divided into following:
o Exporting
o Licensing
o Franchising
o Contract Manufacturing
o Joint Ventures

Exporting
Forms of Exporting

1) Indirect Exporting
-Export merchants
-Export agents
-Export management companies (EMC)
2) Direct Exporting

-Firms set up their own exporting departments

Licensing
Advantages
-Low financial risk to licensor.
-Rapid entry into foreign markets
Disadvantages
-Lack of control over manufacturing and marketing
-Other entry mode choices may be affected

Franchising
Advantages

-Low investment and low risk

-Franchisee does not have to bear the risk of product
failure
Disadvantages

-It is difficult to control international franchising

- Problem of leakage of trade secrets

Contract Manufacturing
Advantages

-Freedom from risk in foreign countries

-Reduces the cost of manufacturing
Disadvantages

-Quality aspects may be difficult to maintain

-Sometime there may be loss of potential profits from
manufacturing

Joint Ventures
Advantages

-J V s spread the risk among partners

Disadvantages

-Delays in making decisions.