Success and Failure of Foreign Market Entries

Mathew M.

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Success and Failure of Foreign Market Entries

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Foreign Market Entries, values, language, customs and currencies

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Abstract

Foreign marketing involves exchanging goods and services between various different national markets (Salman par 1). The marketing activities are coordinated and integrated across various countries that relate with each other in business. In order for a company to fit well in foreign markets, it needs to study the markets well and determine the best mode of entry in order to maximize profits. Each company focuses on leveraging its assets, experiences and its products, globally, adopting different strategies that are unique to its competitors. The success of the company in the markets is determined by the mode of entry that it chooses. People have different tastes and all companies that expect to fair well in the foreign markets need to take into
consideration all these needs.

Apart from understanding the needs of consumers in the markets that the company is willing to venture, it is necessary to consider the regional differences in terms of values, languages, customs and currencies. According to business case studies (par 1), some commodities may only suit certain markets according to the business climate in those countries. These factors are addressed by the mode of entry that a company chooses. Its success
depends on the mode of entry and the choice of entry constraints of the marketing and production strategy of the firm (Madhok 62).

Introduction
Importance of determining the mode of entry
Ownership advantages
Location advantages
Internalization advantage/contractual risk
Foreign Direct Investment
Licensing
What are the key factors that need to be considered by each firm while choosing the best entry mode into the international market?
Company size and resources
Characteristics of overseas country business environment
Conclusion

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[...] The market timing can also enable the company to venture into many markets at the same time and within a short range of time. Which firms are successful in participating in international business, small or large firms? Big firms have an added advantage when venturing in new markets than the smaller firms. Larger firms have a large resource base and a larger market demand than smaller firms. Small markets often have their markets concentrated within the home markets and face stiff competition from large firms when venturing in international markets. [...]

[...] Location advantages The size and the rate of growth of the market is an indispensable factor in determining investment in foreign markets and the mode to use in the entry into these markets. A selective strategy that favors entry into attractive foreign markets should be chosen if a company wants to succeed. The chances of obtaining higher returns are better in competitive markets that slow pick markets. The market potential and the investment risk of the markets characterize the Surname 4 attractiveness of such markets (Sanjeev and Sridhar 5). [...]

[...] Joint ventures may occur between large or small businesses. Small businesses come together in order to gather enough resources to enable them to venture in new markets. Joint ventures are more common in the capital intensive industries such as oil and gas, metal processing and mineral exploration industries (Arthur par 2). The main reason for joint ventures is to save money; however, firms are also driven by the need to share the risks of entry into new markets as well as sharing the new technology. [...]

[...] Surname 19 Conclusion Adam, J. Factors influencing market and entry mode selection: developing the MEMs model. Australia: Swinburne University of Technology Retrieved from: http://www.urbinoelaprospettiva.uniurb.it/materiale/7326_MEMS%20model.pdf. Print. Arthur Sharp. Joint ventures. Encyclopedia of business, 2nd ed Retrieved from: http://www.referenceforbusiness.com/encyclopedia/Int-Jun/Joint-Ventures.html. Print Business Case Studies. Marketing theory: International marketing Retrieved from: http://businesscasestudies.co.uk/business-theory/marketing/internationalmarketing.html#axzz340ohQY68. Print Che Maznah. Entry mode and entry timing decisions by Malaysian construction market. university Teknologi MARA Retrieved from: http://www.academia.edu/3160390/Entry_Mode_and_Entry_Timing_Decisions_by_Mala ysian_Construction_Firms_in_International_Market. [...]

[...] The licensor allows the licensee to operate in the country for a given time that is provided in the contract. The licensee returns royalty compensation in payment for the Surname 10 allowance given. The mode is suitable when the investing company has a scarce capital base as the strategy is not too demanding on resources. The strategy also requires low commitment to the expansion of international businesses. Some markets may be closed to imports and licensing may be the only way of getting access into these markets. [...]

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