Strategies of Enter to a New Market

3004 Words Apr 14th, 2013 13 Pages
83 The Romanian Economic Journal

Strategies of Entering New Markets
Mihaela Belu Andreea Raluca Cărăgin Entering new foreign markets may be achieved in a variety of ways. Each of these ways places its unique demands on the company in terms of organizational and financial resources. Most of the times, entering international markets is not a matter of choice but of necessity to remain competitive in new or established markets. Our paper is going to analyze the possibilities that a company has when entering a foreign market, decision that is very important and which involves market assessment and analysis. Key words: Uppsala Model, Birkinshaw Model, exporting, franchising, licensing, strategic alliances JEL classification code: F21, F23,
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O synthesis presentation of the two theories - the Uppsala Model and the Birkinshaw Model– is illustrated in figure 2.

Year XI, no. 27

(1) 2008

86

The Romanian Economic Journal Figure 2

Static aspects Physical distance Not knowing the market Dinamic aspects The relation headquarters –subsidiary The role and the responsability of the local partner The local environment Risk level

Continuity

Aquisitions /Mergers

Withdrawal

Regarding the internationalisation process, the company has more options (see figure 3): the first choice is represented by the development of the existing markets and it is being used by companies that are acting on highly competitive markets; the second choice – the company can choose to develop its activity on new markets, similar to the ones they are already acting on – in this case, they are usually choosing to export their products; the third strategy is developing a new line of products similar to the ones they already have and which will be sold on similar markets- in this case the company can choose between strategic alliances: creating a joint venture or licensing .

Year XI, no. 27

(1) 2008

87 The Romanian Economic Journal Figure 3. Foreign market entry methods Distant markets
Market development

Strategic alliances

Aquisitions – Foreign Direct Investments Strategic alliances

Aquisitions – Foreign Direct
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