CHAPTER 4

MARKET ENTRY
STRATEGIES

Determine the factors to be considered in the

choice of market entry strategies
a) Corporate objectives and resources
b) Level of involvement
c) Level risk of control

Introduction

Organizations that operate in international

markets need to make the most important
decisions in order to select a best mode of
entry choice into foreign markets .
A firm must assess before entering a particular
market the potential factors that play a
significant role during the process of decision
making for the potential market selection .

Factors to be considered in the choice of market

entry strategies

Corporate objective and resources

Level of involvement and control
Level of risk
Nature of market , competition ,product , consumer
and market coverage
Speed of entry
Investment and market cost
Administrative requirements
Flexibility
Payback

Corporate Objective and Resources

Corporate objectives are key influence in

choosing entry modes
Firms that have limited aspirations will
typically prefer entry options that entail a
minimum amount of commitment E.g
licensing
Proactive companies with ambitious strategic
objectives , usually will pick entry modes that
give them flexibility and control they need .

Contd

Resources and capabalities

Company with tight resources (human or
financial )or limited assets are constrained to
low commitment entry modes such as
exporting and licensing that are not too
demanding on resources.
Companies should carefully consider how to
allocate their resources between their different
markets,including home market.

Level of Involvement

Most MNCs would like to posses a certain

amount of control/level of involvement over
their foreign operation.
Control may be desirable for any element of
marketing mix
plan,positioning,pricing,advertising the way
the product is distributed and so on.

Level of Risk Control

Risks relates to the instability in the marketing

envionment such as political and economics
that may impact the companys business
prospects.
The greater the risk factor the less eager
companies are to make major resources
commitments to the country/ region
concerned.