The paper "The Choice of Entry Mode Strategies and Decisions for International Market Expansion" is a wonderful example of a report on business. Basically, the resolution to go global symbolizes a vital commitment of the organization to shift into an innovative line of business, and that is why entering into a foreign market is a process that must be taken a bit by bit: getting market information, examining the information itself, as compared to the late entrants (Tan, 2009, p. 1047). However, later entrants may as well achieve something by implementing different marketing as well as positioning strategies.
According to Chen and Mujtaba (2007), pioneers in nearly all industries, upon receiving incumbent status, are influential, but sometimes they become content with what they have failing to notice the shifting or growing demands in the foreign market. In this regard, new market entrants can exploit gaps presented by such aging pioneers, or discover ground-breaking means to promote their services or product in the international platform (Pehrsson, 2004, p. 758). Currently, there are two main ways of entering a new market: first, non-equity mode, which entails contractual and export agreements; the second way is equity mode, an entails completely owned subsidiaries as well as a joint venture.
According to Chen and Mujtaba (2007), the market-entry method that presents the least risk level as well as the lowest control f the market is import and export. Market Entry Strategies Exporting The first strategy of entering the international market is through exporting, which can be defined as a process of selling the company’ s products or services to a foreign country. Basically, exporting can be categorized as either indirect or direct.
For indirect export, goods are distributed overseas by specific agents and the company does not have any unique activity related to the foreign markets, since the sale overseas is perceived as the local one. For such reasons, Chen and Mujtaba (2007) posit that it is hard to state that indirect export is a global-based strategy. Based on direct exporting, the company happens to directly participate in promoting its services and products in international markets. According to Pehrsson (2004), the export symbolizes the simplest method for penetrating into international markets. Organization’ s participation in export functions is distinct, as we are speaking with regards to active exporters (when exporting is instigated by the supplier, who has an export plan as well as an appropriate business plan) or passive exporters (when carrying out business overseas is stimulated by the high demand on the international market, indicating that the business is instigated mainly by the importer).
In essence, the export activities determinants are knowledge and improbability influences; strategic effects; and firm-specific as well as behavioral effects. Skills and knowledge concerning the exporting behavior may possibly be owned or accrued by the business organization in due course.
I concur with Tan (2009) assertion that knowledge plays a fundamental role in exporting, as the company’ s participation in foreign markets is mostly a steady process. Al through the early days of exporting, concentrate more on foreign markets, whereas augmented participation in the international market facilitates diversification to various markets. Importantly, as the export knowledge of the company heightens, the ambiguity factor reduces, and this knowledge permits the recognition of existing business opportunities.
Chen, L.Y. & Mujtaba, B., 2007. The Choice of Entry Mode Strategies and Decisions for International Market Expansion. Journal of American Academy of Business, Cambridge, 10(2), pp.322-37.
Pehrsson, A., 2004. Strategy competence: a successful approach to international market entry. Management Decision, 42(5/6), pp.758-68.
Tan, D., 2009. Foreign market entry strategies and post-entry growth: Acquisitions vs greenfield investments. Journal of International Business Studies, 40(6), pp.1046-63.