INTERNATIONAL MARKET
Choosing the most appropriate market entry strategy and development strategy is one of the most difficult decisions since the company is much familiar with the local market. Therefore the assessment of what is for the target in an international country is complicated.
Once the organization has adopted the entry strategy and development strategy, it is tough for them to change it. Even though at a later date, the organization manages to change the strategy, the probability of it incurring a high cost is high. The high amount of cost that is involved in the international market entry and the operational development in the global market makes it complicated, the reason being that it involves high risk. The strategy used for successful entry in one country might not be successful in another country too. Therefore for the management to asses to come out with the best strategy before entering international markets is very difficult. Entry strategy role and the role of development strategy plays a very vital role in the global markets operation success. When something doesn’t go right with the strategy used, then the probability of incurring substantial losses is very high for the international operations business.
Nevertheless, international operation country is a new management nation. Hence, the foreign countries knowledge is not possessed by them, and this makes it harder for them to come out with the right strategies. In addition, international marketing effectiveness lies coming up with the strategies that are right by making sure that the available resources are utilized quite efficiently.
The legal protection that is very poor that are available to the foreign companies plays a vital role a barrier, if the company cannot assume the protection of effective and fair mechanism of solving dispute and intellectual property protection, then the probability of it to have a significant loss in the market is very high. With some nations, legal action resentment over commercial dispute can be very dangerous, the reason being that either courts or the law do not favour the foreign exporters.
Bribe payment possesses another difficulty, with many nations across the globe, for you to have your business run in the country you have to pay bribery. In another way, some form of payment will be demanded by crucial decision-makers and officials for them to allow you run your business in the country and for the transaction to proceed, even though, opinion of the public in the state of the target might be against such kind of practices, the practice remains something that exists. While the companies operating in the country treat bribe as something of no big deal, the companies from foreign nations will face severe criminal and civil penalties for bribe payment. With this, all for them to access the international market becomes too difficult.
A very serious entry barrier is the monopoly situations when a company is an essential product or services provider in the market, then the company would have monopolized the market. The monopoly companies can be owned by nation or are made via competing company’s takeover. For instance, the provision of internet service in North America is one of the complete examples of monopoly type situation. With the way signals of the internet are carried, the consumers are left with only one or two options on how internet services will be obtained: via providing the cable or via their phone company. In the interior villages where instalment of wires are not there, then the only provider of internet services for most customers will be the company. And therefore, other companies will be complicated to enter the market because all the distribution network is controlled by one company.