Why and how business enter to survive in foreign market
Companies enter the foreign exchange market to facilitate their regular transactions and or to speculate
ÒGain access to new customers ÒAchieve lower costs and enhance competitiveness ÒCapitalize on core competencies ÒSpread business risk across wider market base ÒObtain access to valuable natural resources
Read Baron's "Business and its Environment"....good read
To increase sales of their products. The automobile market today is a global market. To survive you must sell vehicles world wide.
There are various ways of entering a foreign market but before finding the easy entry one thing is of vital importance, that is the force that is behind you to go international. The market research will help to carve the answer for this question. for any business establishment one primary driving force is demand and scope of getting adjusted in the foreign market, the secondry and much important thing is the relative competency of your product in terms of quality, price and social acceptance. Once the above mentioned things are carried out, next is to find an easy entry mechanism. Usually the Export of products is the easiest way to enter and exploit the foreign demand. With the trade liberalisation under the aegis of WTO, the world market is now somewhat without trade barriers. In exports there is minimum initial investment and risk as well. There are organisations like Export credit guarantee which covers your risk of loss in foreign trade like insolvency of buyer and loss in transportation. Exporting is the easiest way to enter the foreign market, after holding the clench on the market, you can think of long term investment programmes like licencing, Franchising, joint venture or establishing a fully owned subsidiary.
Because most people think that the US market - I'm assuming when you say 'foreign' you mean 'anything but the US' - is saturated in terms of cola sales. If they want to increase sales, they have to expand to other countries.
entered the oil business in the 1960s when it partnered with Esso Standard in offshore oil exploration.
••Direct Exporting•Indirect Exporting•Licensing Arrangement with Foreign Companies•Franchising arrangement with foreign companies•Contract ManufacturingManagement Contracts•Turnkey Projects•Direct Investments•Joint Ventures•Mergers & Acquisitions are the modes to enter the international market:)
In 1974 AFLAC had won permission from Japan's government to be one of only two foreign insurance companies in the country.
Foreign trade is more complex than domestic as in addition to the considerations and resources needed for the domestic market a business also has to take into consideration cultural, language, monetary and legislative variances. Before considering entering into a foreign market a PEST or PESTLE report would normally be commissioned. PEST is an acronym for Political, Economic, Social and Technical and considers all aspects of the macro market i.e. the big picture. In addition, a business would need to consider the market itself in terms of size, accessibility, competitors, potential etc. If the market still looks attractive then a business would need to consider if it has sufficient resources to enter the target market. This is done by commissioning a micro analysis which is in essence an internal audit of a business's resources and capabilities. SWOT analysis is one of a number of tools used to do this. Secondary research will provide many of the answers but in my experience it is always necessary to carry out some primary research i.e. field research to validate the secondary research and to ask qualitative questions unanswered by other market research sources.
One can enter into international business through exporting, licensing and merchandising or through some special modes such as contract manufacturing, turnkey projects. One can also enter through foreign direct investments with and without alliances.
For merchandising businesses, when a business wants to enter an existing market with a new product, the appropriate strategy is called "product development", and when there is an existing product, the strategy is called "market penetration". When a business wants to create a new market with a new product, the strategy is called "diversification", and when a company wants to introduce an existing product onto a new market, the strategy is called "market development".