Entry Strategy & indirect vs active

Entry Strategy & indirect vs active - Entry...

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Entry Strategy Factors There are many factors that will influence a company's entry strategy into a foreign market.  Some of these factors are related to the characteristics of the market that the firm is targeting,  and others are related to the characteristics of the product and of the exporter. Specifically, the exporter should analyze carefully the following determinant factors: The size of the market:  While there is no easy rule, the method of entry is different for a  market in which combined sales amount to €10,000,000 (US $12,500,000) per year and a  market that exhibits sales in billions of euros. The growth of the market:  A stable market, growing at a moderate rate, will call for a  different entry strategy than one in which there is a substantial potential for growth. The potential market share of the exporter:  A market in which the exporter can  become a major player will call for a different strategy than one in which the exporter has  no chance to be much more than a niche player. The type of product:  Products with technology and a need for after-sale service and  parts will require a different entry strategy than a disposable consumer good. The market strategy of the firm:  Although self-evident, a firm whose strategy is to  provide a top-of-the-line product will have a different entry strategy than a firm that has  chosen to be the lowest cost provider. The willingness of the firm to get involved:  Firms that actively want to develop foreign  markets should have a different entry strategy than firms that believe that their domestic  market is their primary concern and consider foreign sales as "bothersome." The characteristics of the country considered:  The level of development, the  infrastructure of the country, the business sophistication of potential trade partners, the  overall climate under which business is conducted, the culture of the market, and the  culture of customers should all be considered in the decision of an entry strategy. The time horizon considered:  Products that have a short life cycle, or products that are  likely to generate a lot of "me-too" competitors, demand a different entry strategy than  products that are patent-protected, or are likely to have a long life cycle or engender a  long line of complementary products.
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Only after all of these factors are evaluated is it possible for a firm to decide appropriately which  market entry strategy to pursue. Overall, great caution should be exercised in decisions regarding  entry strategies: Among all the decisions made by marketers regarding the marketing mix, the 
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This note was uploaded on 09/10/2009 for the course MKT 764 taught by Professor Chuckhermans during the Spring '09 term at Missouri State University-Springfield.

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Entry Strategy & indirect vs active - Entry...

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