Types of Foreign Market Entry

1. High pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy: A. global B. multidomestic C. transnational D. overall cost leadership 2. Foreign direct investment includes the following form of entry strategy: A. licensing B. franchising C. joint ventures D. exporting 3. According to Michael Porter, firms that have experienced intense domestic competition are A. unlikely to have the time or resources to compete abroad. B. most likely to design strategies aimed primarily at the domestic market. C. more likely to design strategies and structures that allow them to successfully compete abroad. D. more likely to demand protection from their governments.

Exporting has become a very important business strategy nowadays. In order for firms to expand to the international market, and also to maintain and grow their share of market in whatever industry they are in, depending on their goals and objectives, any company must at least explore this possibility. A few and important advantages might come into place, in that they can extend their sales potential of their existing products, increasing margins through a larger customer base. Also, these small to large businesses can consolidate by gaining global share of market, they can reduce their dependence on their existing markets,

It plays a great role in changing the psychology of consumers to convince them to switch brands

Exporting presents many advantages including reduced dependency on home market sales and greater control over research, design and production decisions. Conversely, many exported goods are subject to tariff or nontariff barriers and transportation costs that may substantially increase the final cost to consumers (Williams, 2009.)

The need for a solid market entry decision is an integral part of a global market entry strategy. Entry decisions heavily influence the firm’s other marketing-mix decisions. Company can enter International Market with many ways, some of them are as follows:

Basically, there are different ways to enter into the foreign market such as exporting (Firms products

Cheong-A Lee Pusan National University Ho-Yeol Bang Pusan National University Jong Wook Ha Columbus State University Joo Young Lee The University of West Alabama Young Hee Yun Kim Tuskegee University ABSTRACT Research on the entry mode of multinational companies (MNCs) to a new market has been one of the major topics in the international business, and the cultural factor has been regarded as one of the major factors to explain the entry mode selection of MNCs. Based on the development on the cultural factors on entry mode, MNCs can enter a market with joint venture or

Measuring a potential business venture has many aspects which the international manager must be aware of in order to convey the correct information back to the decision makers. Being ignorant to any of the aspects can lead to a false representation of the project, and hence an uninformed decision being passed. In order for a business to survive it must grow. For growth to be optimal, management must first be able to identify the most attractive prospective leads. The country as a whole, specifically geography, government, and financial aspects must be looked at in order to yield the best possible picture of the market a company wishes to enter. Concentration should be placed on gathering reliable facts

Companies can decide to go global or to enter international markets for various reasons, and these different objectives at the time of entry that enable the business to produce different strategies and the performance goals, and even forms of market participation.

Subject : Appraisal of a MNE's recent market entry (2007-2010) ( 1. Firm Motivations for internationalization 2. Entry Strategy 3. Corporate Strategy)

Well known companies like Nike, Microsoft, Sony, Shell Group are just some of the big companies that went global and expanded their trading around the world, they are large businesses that operate internationally in many countries. Development of worldwide integration urges companies to reach out international markets and interact with foreign customers. Businesses focus on fulfilling the demand of the market by its products or services, besides their target is increasing profit, in order achieve these goals they favor to expand their work in a foreign market. Other reasons to internationalize their business may be to become

There are many different types of market entry strategies that may be implemented by a foreign firm in an emerging country. Amongst the most popular are:

The reluctance of firms to change entry modes once they are in place, and the difficulty involved in doing so, make the mode of entry decision a key strategic issue for firms operating in today’s rapidly internationalizing market place.

The export function is a responsibility distinct from domestic marketing. As a company establishes foreign markets, it must develop the ability to facilitate the necessary transactions. This process often requires new abilities to respond to unfamiliar customers. These activities extend beyond adjunct marketing responsibilities, and firms usually acknowledge the separate needs by staffing export offices with people skilled in international business. Many companies retain this structure for long periods of time, merely expanding office staff as required. As it shown in figure 7.3:-

• Exporting requires significantly lower level of investment than other modes of international expansion, such as FDI. As you might expect, the lower risk of export typically results in a lower rate of return on sales than possible though other modes of international business. In other words, the usual return on export sales may not be tremendous, but neither is the risk.