GLOBAL MARKET ENTRY STRATEGY

 Set clear goals

 The first step is to decide on what you want to achieve with your exporting
project and some basics about how you’ll do so. Details to spell out include:
• business goals for the expansion
• your targeted level of sales
• the specific product or service you’ll export
• the target market
• major action items and a timeline for achieving them
• budget and other available resources

Utpal Sen 11/24/2022

CAUTION

 Businesses often underestimate the degree of competition in new markets.

If you don’t see how you would be different, it’s better not to go to the
target market.

Utpal Sen 11/24/2022

MARKET ANALYSIS

 MACRO VARIABLES
1. Political Stability
2. Market Opportunity: Available Labour, Natural Resources, Competition
3. Economic Development
4. Cultural Unity
5. Legal Barriers
6. Physiographic Barriers
7. Geocultural Distance

HOT / COLD /MODERATE: TOP 4 +ve/_ve/Average

Utpal Sen 11/24/2022

MARKET ANALYSIS ….. Contd.

 Micro Variables:
 TR= ∫ (M,C,P1,P2,P3,P4)
 Where TR is Total Revenue as a function of Market Potential, Competition, Product, Price , Place
& Promotion.

 Market Selection Framework

 Terms of Access; Custom Duty, Tariff Non/ Tariff Barrirs
 Shipping Cost
 Product Fit
 Service Requirement.

Utpal Sen 11/24/2022

 MARKET ANALYSIS ….. Contd.-2
1) MARKET 2) MARKET 3) = 4) MARKET 5) TERMS EXPORT
SIZE COMPARATIVE POTENTIAL OF POTENTIAL
(Units) ADVANTAGE (2X3) ACCESS

A (USA) 100 0 0 100% 0

B (SA) 50 0.1 5 50% 2.5

C (UAE) 20 0.2 4 80% 3.2

Utpal Sen 11/24/2022

 A) EXPORT MARKETING PLAN

1. needed adaptations to products, packaging and

branding tailored to the target market

2. pricing and promotion details

3. a more comprehensive look at your target market

and competition
 B)RESEARCH YOUR MARKET

1. size of the market

2. consumer trends, needs and perceptions
of products like yours
3. domestic and international competition
4. your unique value proposition in the market
5. regulatory, certification, trade and other
barriers and opportunities
6. potential support from foreign
governments for your exports
Utpal Sen 11/24/2022
C) CHOOSE YOUR MODE OF ENTRY

Utpal Sen 11/24/2022

 D) CONSIDER FINANCING AND
INSURANCE NEEDS
1. To determine the amount and type of financing needed to support your
export venture, it’s important to do calculate how the initial investment in
production, shipping, hiring and other costs will affect working capital.
Keep in mind that foreign buyers may want longer payment terms.
2. You may also want to consider getting insurance to protect your
company from the unexpected

Utpal Sen 11/24/2022

E)DEVELOP THE STRATEGY DOCUMENT

1. Be sure to write down the details of your market entry strategy. This
document will be handy for arranging any needed financing and as a
framework for your export marketing plan. You can ask your accountant,
lawyer, banker or an outside expert to give you comments for
improvements.
2. You should regularly review your market entry strategy to monitor how
you’re doing and make updates.

Utpal Sen 11/24/2022

Type of Entry Advantages Disadvantages

Low control, low local knowledge,

Exporting Fast entry, low risk potential negative environmental
impact of transportation

Less control, licensee may become a

competitor, legal and regulatory
Licensing and Franchising Fast entry, low cost, low risk
environment (IP and contract law) must
be sound

Shared costs reduce investment Higher cost than exporting, licensing, or

Partnering and Strategic Alliance needed, reduced risk, seen as local franchising; integration problems
entity between two corporate cultures

Fast entry; known, established High cost, integration issues with home
Acquisition
operations office

Gain local market knowledge; can be

Greenfield Venture (Launch of a new, High cost, high risk due to unknowns,
Utpal Sen seen as insider who employs locals; 11/24/2022
wholly owned subsidiary) slow entry due to setup time
maximum control
DIFFERENCE BETWEEN LICENCING AND
FRANCHISING
 Licensing essentially permits a company in the target country to use the property of the licensor. Such
property is usually intangible, such as trademarks, patents, and production techniques. The licensee pays a fee
in exchange for the rights to use the intangible property and possibly for technical assistance as well.
 Because little investment on the part of the licensor is required, licensing has the potential to provide a very
large return on investment. However, because the licensee produces and markets the product, potential returns
from manufacturing and marketing activities may be lost. Thus, licensing reduces cost and involves limited
risk. However, it does not mitigate the substantial disadvantages associated with operating from a distance. As
a rule, licensing strategies inhibit control and produce only moderate returns.

 Another popular way to expand overseas is to sell franchises. Under an international franchise agreement, a
company (the franchiser) grants a foreign company (the franchisee) the right to use its brand name and to sell
its products or services. The franchisee is responsible for all operations but agrees to operate according to a
business model established by the franchiser. In turn, the franchiser usually provides advertising, training, and
new-product assistance. Franchising is a natural form of global expansion for companies that operate
domestically according to a franchise model, including restaurant chains, such as McDonald’s and Kentucky
Fried Chicken, and hotel chains, such as Holiday Inn.