Foreign Market Entry Strategies Essay

When an organization has made a decision to enter an oversea market, there be a variety of options open to it. These options vary with cost, insecurity and the degree of control which can be exercised over them. The simplest regulate of gateway strategy is exporting using either a demand or in point method such as an agent, in the case of the former, or countertrade, in the case of the latter. More complex forms take irrelevant direct investments which may involve joint ventures, or export touch zones. Having resolved on the form of export strategy, decisions book to be made on the specific channels.Many agricultural products of a raw or goodness nature use agents, distributors or involve Government, whereas processed materials, whilst not excluding these, depone more heavily on more sophisticated forms of access. These ar discussed in this paper. The three main ways are by direct or confirmative export or production in a extraneous countrified. Exporting Exporting is the most traditional and well established form of operating in foreign markets. Exporting can be define as the marketing of goods produced in one country into another.Whilst no direct manufacturing is required in an overseas country, significant investments in marketing are required. The tendency may be not to obtain as overmuch detailed marketing information as compared to manufacturing in marketing country however, this does not negate the need for a detailed marketing strategy. present the manufacturing is home based thus, it is less risky than overseas based. Besides braggy an opportunity to learn overseas markets before investing in bricks and mortar, it too reduces the potential risks of operating overseas.Exporting methods include direct or indirect export. In direct exporting the organization may use an agent, distributor, or overseas subsidiary, or act via a Government agency. The disadvantage is chiefly that one can be at the mercy of overseas agents and so the lack of control has to be weighed against the advantages. For example, in the exporting of African horticultural products, the agents and Dutch flower auctions are in a position to ordain to producers.According to Collett3 (1991) exporting requires a partnership between exporter, importer, government and transport. Without these four coordinating activities the risk of failure is increased. Contracts between buyer and seller are a must. Forwarders and agents can play a vital role in the logistics procedures such as booking air space and arranging documentation. contradictory direct investment Besides exporting, other market entry strategies include licensing, joint ventures, contract manufacture, ownership and participation in export processing zones or free trade zones.Licensing Licensing is defined as the method of foreign operation whereby a firm in one country agrees to let a company in another country to use the manufacturing, processing, trademark, know-how or some other skill provided by the licensor. It is quite similar to the franchise operation. Coca Cola is an excellent example of licensing. In Zimbabwe, United Bottlers have the licence to make Coke. Licensing involves little expense and involvement. The only cost is subscribe the agreement and policing its implementation.