Government Regulations

• Foreign firms must adapt to it

- study in detail the specific regulations affecting its industry and the sales of its products
and services.

Some hire professional specialists who can decipher the foreign regulations.
International law firms are often a good place to start.

• Negotiations

- Assistance from the home government

Governments can influence or push a change in a local Government through

negotiations. These negotiations reflect how globalization changes the Government
rules.

• Government regulations may be so severe and limiting that the company can do little without a
native partner.

native partner (may become a representative) can be assigned the task of carrying out
negotiations with government authorities and local regulators.
firm can become an insider with claims on the same local protection as domestic firms

Distribution Access

• Concerns of Retailers & Wholesalers

Retailers might have limited to no shelf space, they carry competing brands, or doubts if
the new brand will sell.
Wholesalers can’t depend on overseas suppliers, familiarity with the distributors, and the
need of extra rebates to take new brands.

• Close distribution or supply ties (Exclusive distributors)

Efficiency, it is a burden for the firm if channel members or the suppliers are not efficient.

• Strategic alliance or sell the product unbranded in an OEM

 Is considered if there is lack of access to distribution channels.

OEM means Original Equipment Manufacturing; example is when Brand A makes

products to be marketed under Brand B’s name

There is an alternative of establishing a new channel, thou this is usually expensive.

• Hire capable local talent.

It’s also a barrier if a firm cannot hire capable local talent. It will depend on the local
people if they mind or prefer to work for domestic or foreign companies.

If the people prefer working for domestic companies then the firm would have trouble
entering the market.

Natural Barriers

• depend as much on subjective consumer perceptions as on real differences between products

• Market success and customer allegiance

• firm-specific advantages are important - marketing effort

Natural Barriers exists because of factors like Market success and customer allegiance.

Natural barriers like High customer satisfaction and brand loyalty, or country-of-origin
biases favor a domestic brand.
Superiority of the product may not be sufficient, it must be paired with marketing effort