12 Market Entry Strategies as Used 04 1_2
Market Entry
Strategies
International Business
Dr. Richard Sjolander
Management’s Role
• Commitment is crucial to carrying out the decision to go Global
• Businesses must be aware of opportunities, and
• Culturally sensitive
•
Foreign Market Penetration requires
• Market Development
• Research
Sensitivity
Innovation
• Involvement at the highest level of Management is
Imperative.
Why Small Business should Export
Entering
Foreign Markets
Large and Small business differ in entry strategies.
Big Business: tends to follow formal decision rules with market analysis, risk analysis, and profit potential estimates. Small Business:?????????????
Developing
Global Commitment
• Awareness of International Business
Opportunities
• Awareness of the Risks of International
Operations:
Especially Startup Costs
• A long range time horizon helps
• Ability to be flexible.
Why Small Business don’t
Export
• Lack of awareness of opportunities.
• The World GDP is many times large than even the largest domestic markets
• Economic growth rates are higher in many overseas markets than in major industrialized markets.
• Expanding into International markets can be a great competitive move in the domestic market.
• What is this saying?
–
–
–
–
Don’t know where to get market information.
Don’t know the rules
Don’t know how to contact foreign businesses.
Fear of the unknown
• Cultural differences
• Languages
Currencies
Business Customs
• Lack of awareness of potential gains
• Ethnocentrism
1
Steps in Entering
Foreign Markets
1.
2.
3.
4.
5.
6.
Evaluate your firm: determine your competitive advantage. Evaluate potential markets for entry
Determine the best product or line to enter the market with.
Estimate the resources required.
Determine the constraints on the firm.
Choose the vehicle (method for market entry).
The various forms of market entry strategy are organized
• As usual,
•
Strategies
International Business
Dr. Richard Sjolander
Management’s Role
• Commitment is crucial to carrying out the decision to go Global
• Businesses must be aware of opportunities, and
• Culturally sensitive
•
Foreign Market Penetration requires
• Market Development
• Research
Sensitivity
Innovation
• Involvement at the highest level of Management is
Imperative.
Why Small Business should Export
Entering
Foreign Markets
Large and Small business differ in entry strategies.
Big Business: tends to follow formal decision rules with market analysis, risk analysis, and profit potential estimates. Small Business:?????????????
Developing
Global Commitment
• Awareness of International Business
Opportunities
• Awareness of the Risks of International
Operations:
Especially Startup Costs
• A long range time horizon helps
• Ability to be flexible.
Why Small Business don’t
Export
• Lack of awareness of opportunities.
• The World GDP is many times large than even the largest domestic markets
• Economic growth rates are higher in many overseas markets than in major industrialized markets.
• Expanding into International markets can be a great competitive move in the domestic market.
• What is this saying?
–
–
–
–
Don’t know where to get market information.
Don’t know the rules
Don’t know how to contact foreign businesses.
Fear of the unknown
• Cultural differences
• Languages
Currencies
Business Customs
• Lack of awareness of potential gains
• Ethnocentrism
1
Steps in Entering
Foreign Markets
1.
2.
3.
4.
5.
6.
Evaluate your firm: determine your competitive advantage. Evaluate potential markets for entry
Determine the best product or line to enter the market with.
Estimate the resources required.
Determine the constraints on the firm.
Choose the vehicle (method for market entry).
The various forms of market entry strategy are organized
• As usual,
•