Which Of The Following Market Entry Strategies Involves An Agreement

If your company is ready to enter a new international market, you can look for some tips for choosing a market entry strategy. Licensing is a relatively sophisticated agreement in which a company transfers the rights to use a product or service to another company. This is a particularly useful strategy when the licensee has a relatively large market share in the market you want to enter. Licenses can be for marketing or production. License). 1. This market entry strategy maximizes profit potential while at a higher risk that companies will take a generally cautious approach to international marketing. They need to analyze market opportunities and their internal capabilities to determine which approach is most appropriate. Often, companies start with a lower-risk strategy and turn to other strategies that involve additional investments and risks and additional opportunities after success. The most common market entry strategies are explained below. Partnerships are almost a necessity when entering foreign markets and in some parts of the world (for example.

B Asia). The partnership can take a variety of forms ranging from a simple co-marketing agreement to a sophisticated strategic alliance for manufacturing. Partnership is a particularly useful strategy in markets where culture, both commercial and social, is very different from yours, as local partners bring local knowledge to the market, contacts and, if chosen wisely, customers. Export is the direct sale of goods and/or services in another country. This is perhaps the best known method of entering a foreign market, as well as the least risk. It can also be cheap, as you don`t need to invest in production facilities in your chosen country – all products are always produced in your home country and then put up for sale abroad. However, increased transportation costs are expected to increase export costs in the near future. The majority of export costs come from marketing costs. As a general rule, you need the participation of four parties: your company, an importer, a transport supplier and the government of the country to which you wish to export. Licensing allows another company in your destination country to use your property. The property in question is generally elusive – for example.

B trademarks, production techniques or patents. The licensee pays a fee to obtain the right to use the accommodation. Licensing requires very little investment and can offer a high return on investment. The licensee also handles production and marketing costs in the foreign market. Franchising Franchising is similar to licensing insofar as intellectual property rights are sold to a franchisee. However, the rules governing the franchisee`s activity are generally very strict – z.B. must be followed by all processes where certain components must be used in manufacturing. Joint Venture A joint venture consists of two companies that create a community business.