Global market entry strategies

Global market entry strategies

Global market entry strategies

Global market entry strategies
Companies can enter the international market through various strategies, depending on whether they intend to export their goods or intend to produce abroad.
In general, global market entry strategies can be classified into two main groups of exports and production abroad:

A) Indirect exports
In indirect exports, the company is not actively involved in international markets, and the company’s products are exported to foreign markets by others. In fact, a company is an indirect exporter when its products are sold in foreign markets without having done any special activity in the foreign market for this purpose.
Indirect exports by companies are possible without direct investment, but the possibility of control in foreign markets is limited. For small and medium-sized companies, indirect marketing through intermediaries is more possible and can be the first step in the field of exports.
In indirect marketing, the management of the firm, while controlling and supervising the export process, benefits from the expertise and knowledge of the export intermediary and assumes less risks, because the intermediaries are responsible for finding the customer, transporting the goods and receiving the funds.

In indirect exports, there are also foreign sales through domestic buyers, and there is nothing better for the company than for the customer to look for the goods himself. Foreign buyers may come to buy the goods. In this case, the company sells its products to domestic buyers and domestic buyers export the same product abroad.
In such cases, foreign purchasing companies, agents or purchasing offices are established in the seller’s country and proceed with the purchase in close contact with the seller.
Sometimes sales are made through other distribution companies! In this method, a manufacturer uses its distribution facilities in a foreign country to distribute and sell goods of another company.
For example, Singer Company, in addition to its own sewing machine, sells sewing machine products of other companies such as fabric, pattern, etc. Companies that face seasonal or periodic sales of their products also use their facilities to sell products of other companies during the recession.
Among them there are export management companies or EMC, an export management company is a company that performs all responsibilities of export operations such as marketing research, advertising, physical transportation, etc. by concluding a contract. These companies act as part of a parent company, without having or being part of a formal relationship with the parent company.
Export management companies can provide their services to several manufacturers at the same time. This type of market entry has advantages such as the speed of communication between the producer and the sales market, receiving part of the sales benefits from the export management company from the seller and motivating They are for more sales, reducing the costs of the parent company, providing a variety of services and goods by the buyer export management company.
The services of an export management company can include market research, marketing strategies, product distribution, sales management and training, transportation of goods and assistance in providing financial facilities and translation of foreign texts, they are in foreign trade and identify suitable markets for unique products Individualize and apply the best sales strategy in the market.
Some export management companies in the product and some in the market or in both specialties
have. The best export management companies are those who have sufficient familiarity with the product and market and also have access to a strong distribution network in the foreign market. Quick access to the foreign market is one of the most important advantages of using the services of export management company. We can also mention the risk of losing control of the producer in the foreign market, which to avoid it is necessary to choose an export management company very carefully to be able to estimate the demands and needs of the firm. Selling through an experienced export management company is an optimal way to enter the international arena with the least amount of effort!

B) Direct export
The most traditional way to enter the international market is to export goods. Throughout the history of world trade, people have traded goods made in one country with goods made in another, benefiting from the specialization of affairs. Governments are usually in favor of an export strategy because it increases domestic production and employment levels and helps balance the country’s balance of payments. For this reason, exporters are usually supported by governments.
Various companies choose export as the first market entry strategy. Many companies started with exports and today have large production units. They tested the market by exporting goods and then turned to other strategies to expand the market. In addition to manufacturers, retailers are also interested in exporting goods.
Exporting goods is a good strategy to enter the market because it has less risk and is more flexible.

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