Challenges Faced by Companies Entering Foriegn Markets

What are some factors companies (and your learning team) need to consider before attempting to enter foreign markets? Assuming you were setting up a market program for a product in a foreign country (and you are), what should you take into consideration? Assume you are developing an advertising strategy for the promotion of a new product (and you are). What are some things you should consider?

High cost of entering new markets International growth is expensive. Entering new markets with a new brand

(-) By being too aggressive, it counters their value of relationships and good customer service, and can tarnish their brand with a bad reputation

E-commerce is transactions conducted via electronic means such as the internet, email and SMS. It is considered to be one of the most important aspects of the internet to appear. As a result, people are able to exchange goods and services immediately regardless of their geographic location and time. More and more businesses conduct transactions on line, with some trading purely on-line thus reducing overheads and administrative costs.

Different countries have different cultures that the population is accustomed to, so companies will need to attract this new market to try an unusual (to them) product. Companies also look forward to international strategy because of the larger returns on investment. Hoskisson, Hitt, Ireland, and Harrison (2013) states that “larger markets provided by international expansion are particularly attractive in many industries, such as computer hardware, because they expand the opportunity for the firm to recoup a large capital investment and large scale R&D expenditures” (p. 287). Economies of scale and scope are a couple more reasons for companies to adopt an international strategy. Economies of scale occur when more units of a good or service are produced on a larger scale whole the production costs decrease, which in turn will increase a firm’s gross profit. So it is enticing for a company to develop products in other countries if it means it will cost less to produce.

If the product is not doing good in the home country, why we should try to go global? May be some boss may think the foreign country will be adopting the product better compare to the home country, and I think this is wrong. The Product is the company’s core.

The people of those countries will be mad if that company moves out. Since companies have gone global, their officers are also from different parts of the world. Their headquarters are in one place and factories in another. It starts to get hard to tell where the company belongs.

There are many opportunities available for companies willing to venture into new, international markets. Reaching more customers and therefore, turning a larger profit are two fairly obvious reasons for companies to consider global expansion. However, the potential benefits do no end there. Expanding to international markets can hold less obvious, yet extremely beneficial appeals such as access to new and different talent pools, grander output requires great advances in efficiency, and international expansion can, in some cases, aid in “future proofing” the company.

There are numerous advantages to taking our company to the international market. One of the main advantages is that we will have the ability to gain more market share as well as expand our consumer base. By gaining international exposure and making more people aware that the product exists, we are more likely to reach the homes of many additional consumers and increase the sales of our products. Not only will we expand our market share, but our revenue will increase as well. Last year we accrued a five million dollar net profit based on sales in the United States market alone. With production, pricing and advertising done properly and taking all other international expenses into consideration, such as shipping costs and fees, the net profit can increase in the years to come. Additionally, there is a better chance to avoid market saturation in the event that it occurs in the United States. With highly competitive

For companies that has reached its potential in the local market, they would have to expand globally in order to boost their profits and stay competitive. Thus, understanding the available foreign modes of entry can help their business to enter into foreign markets more easily.

For any company going out for the foreign market is because of any one out of globalization, reducing tariff all over the world, to increase the market share, saturation of the local market, for getting the economies of scale of production, to use their excess capacity and use the resources where it is available at law cost.

Measuring a potential business venture has many aspects which the international manager must be aware of in order to convey the correct information back to the decision makers. Being ignorant to any of the aspects can lead to a false representation of the project, and hence an uninformed decision being passed. In order for a business to survive it must grow. For growth to be optimal, management must first be able to identify the most attractive prospective leads. The country as a whole, specifically geography, government, and financial aspects must be looked at in order to yield the best possible picture of the market a company wishes to enter. Concentration should be placed on gathering reliable facts

E-commerce is the process of buying and selling of various products and services by businesses through the Internet. Primarily there are five types of ecommerce systems: Business to Consumer (B2C)

Transferring business to other countries outside the US has become the trend because often times it is much cheaper and sometimes the service and skill set of the work force is better than at home. Most companies have to play on the global field in order to remain profitable and what better way than to hire and train employees from the country you are moving operations into. This hiring of local human capital can pay dividends and add instant credibility to your company and provide a smoother transition into said country. India cost per employee has risen which has shifted many companies to look to the Philippines where it is much cheaper to employ while still keeping a highly educated and skilled workforce.

Foreign companies needs / wants for entering into another country (Emerging market like India) :-