Marketing Entry Strategy

3304 Words14 Pages
1 Introduction
In this assignment, there have several ten questions for us for selection, I have choose the question five for my assignment this time, this question is regarding to two areas, one is the market entry strategy and explain why no single strategy can be used in all circumstances; another one is explaining why franchising is popular method of entering markets abroad and describe its characteristic.

2 Market Entry Strategy
Why firms go abroad
First of all, we need to know why firms go abroad and looking for entering foreign countries’ market.

In General, the reasons why Enterprise seeks to invest in the foreign countries and have International expansion, which can be divided into several aspects. Firstly, domestic
…show more content…
It may be through acquisition of an existing entity of a new enterprise.
Acquisition has become a popular mode of entering foreign market mainly due to its quick access; it offers the fastest, and the largest, initial international expansion of any of the alternative

2.2 Advantage and disadvantage of Market Entry Strategy

Strategy Advantage Disadvantage
- Low initial investment
- Reach customer quickly
- Complete control over production
- Benefit of learning for future expansion - Potential cost of trade barriers, which includes transportation cost, tariffs and quotas
- Foregoes potential location economies
- Difficult to respond to customer needs well
Licensing - Low initial investment
- Avoids trade barriers
- Potential for utilizing location economies
- Access to local knowledge
- Easier to respond to customer needs - Lack of control over operations
- Difficulty in transferring tacit knowledge, which includes negotiation of a transfer price, monitoring transfer outcome
- Potential for creating a competitor
Joint venture - Advantage
- Access to partner’s local knowledge
- Reduction of concern about overpayment
- Both parties have some performance incentives
- Significant control over operation - Disadvantage
- Potential loss of proprietary knowledge
- Potential conflicts between partners
- Neither partner has full performance incentive
Get Access