The first step of entering a new market is conducting market research. This includes assessing the current market situation, its size and trends, how strong the competition is and what are the laws and regulations that you will need to comply with. One of the best market entry strategy is direct exporting . Choosing direct exporting may be a foreign market entry strategy that’s right for your company when you have a unique offering with strong customer appeal and have adapted it to match your targeted international market. When you direct export, you can achieve higher profits without a middleman. Exporting allows a company to enter many markets at the same time without much capital investment. Plus, you will gain complete control over your transactions and be able to establish close relationships with your customers. If entering a new international market poses challenges, such as language barriers, cultural differences or unfamiliar ways of doing business, it may be better to choose indirect exporting via intermediaries who know the local market much better. They can help you find customers, arrange distribution channels, handle documentation, clear your goods through customs and provide after-sales service.
Below you can see some examples of perfect market entry strategies to enter international markets:• Direct exporting: Producing the product in the home country and just shipping the surplus to a new country is the easiest way to enter foreign markets. This market entry strategy can be perfect for brand new companies who do not have enough funds to take risks. It is also easier for the firms to hire agents or distributors who will take care of exporting and promoting the new product in the new market. But, one significant challenge is the fact that companies may not be able to react to customer communications as quickly as a local agent.• Licensing: In simple terms, licensing is a contractual arrangement, where the firm provides proprietary assets to a foreign company in exchange for royalty fees. Sometimes it can be possible that a company is not able to export the product because of complex rules and principles or when the transportation cost is high-priced. Even though it significantly diminishes the risk for the company and cuts the amount of investment required, the company will have to share their proprietary secrets with an outsider. Licensing can be done for a trade name and not just for a product. This type of market entry strategy is appropriate for companies who don’t want to commit to international expansion.• Franchising: One of the most prevalent market entry strategies that is gaining popularity across the world is franchising. Franchising works well for organizations that have a trustworthy business model like McDonald’s fast food chain or Starbucks instant coffee. Businesses who take up franchising should make sure that they earn a good brand name, build on it, and promote it. The franchising business model is outstanding as it doesn’t need huge investments from the franchise, builds a reputable brand name, and earns a franchise fee.