Market Entry Modes & Strategies

Topics: Franchising, Strategic management, Management Pages: 41 (14249 words) Published: May 7, 2011

Chapter 1Introduction to market entry
Chapter 2Market entry modes
Chapter 3Market entry strategies
Chapter 4 Risks involved in market entry
Chapter 5Market analysis
Chapter 6Suitability of different market entry modes in different markets Chapter 7Conclusion

Chapter 1
Introduction to market entry

A market entry strategy is the planned method of delivering goods or services to a target market and distributing them there. Importing or exporting services refers to establishing and managing contracts in a foreign country. Many companies successfully operate in a niche market without ever expanding into new markets. The objective of this project is to study the different modes of entering international markets and what strategies to adopt in order to successfully penetrate and capture the intended markets. Some businesses achieve increased sales, brand awareness and business stability by entering a new market. Developing a market entry strategy involves a thorough analysis of potential competitors and possible customers. Some of the relevant factors that are important in deciding the viability of entry into a particular market include Trade barriers, localized knowledge, price localization, Competition, and export subsidies. While some companies prefer to develop by their own their market entry plans, other outsource to specialized companies. The knowledge of the local or target market by those specialized companies can mitigate trade risk. Decisions in the marketing area focus on the value chain. The strategy or entry alternatives must ensure that the necessary value chain activities are performed and integrated.

Objective of market entry strategy:
minimizing uncertainties faced by new entrants,
decrease financial uncertainties
enable business plan collaboration and financial planning, •Create launch efficiency by delivering a framework for subsequent planning of tactical launch activities, coordinating and prioritizing tasks for launch team. •Enable risk planning and market perception control their contingency planning. •Launch organizations face tremendous pressures on market entry, created by internal and external expectations. Some of these pressures can be eased by developing a clear and structured market entry strategy and effective functional plans.

While some companies prefer to develop by their own their market entry plans, other outsource to specialized companies. The knowledge of the local or target market by those specialized companies can mitigate trade risk

Chapter 2
Market entry modes
1. International licensing:
A shorthand definition of a license is "an authorization (by the licensor) to use the licensed goods (by the licensee)."Under a license agreement the licensor company grants rights to intangible property (license) to another company for a limited period, which may be limited to one company. The intangible referred to here includes patents, inventions, formulas, processes, designs, patterns, copyrights for literary, musical, or artistic compositions, trademarks, trade names, procedures, and systems. The licensee pays royalty in exchange. Licensing may be adopted when the volume of products is not large enough to warrant the establishment of a separate facility for manufacturing or production. The licensor is obliged to furnish the necessary technical information. Such an arrangement exists in which technology changes are frequent, such as in semiconductor market. A license under intellectual property commonly has several component parts beyond the grant itself, including a term, territory, renewal provisions, and other limitations deemed vital to the licensor. Term: many licenses are valid for a particular length of time. This protects the licensor should the value of the license increase, or market conditions change. It also preserves enforceability by ensuring that no...
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