Foreign Market Entry Strategies
Globalization has led to the linkages in many cultures and markets around the world. It is not difficult to attain a product manufactured in another country. The reason is that business and commerce, in general, have taken a global approach primarily upon the advent of the internet and technology. A company like Virago Footwear will operate in many countries, indeed, the business can opt to venture into other markets in different geographical locations. This entry into a foreign market takes specific strategies and careful planning to engage in the most profitable and viable entry strategy. Undertaking an unviable entry strategy will often result in losses, including the time and money spent forgoing oneself in a particular market. There are several ways in which Virago Footwear can enter international markets best suited for this type of brand. The methods of entry are discussed, and the best ideas, most viable for Virago Footwear, are highlighted. These market entry strategies include direct exporting, which involves selling the products directly to the market one wishes to enter. The other method is partnerships, which include partnering up with another person or entity with a similar business model. Finally, buying a company may also be another way to enter a market. It is advantageous as it will provide the customer base, but it involves a considerable investment.
Direct Exporting
Direct exporting isone of the more traditional forms of international business entry. It is generally accepted that this method involves a lot of marketing to showcase the products. Direct exporting is vital as it does not include making considerable investments in the targeted market. Direct exporting means that the risks are relatively lower in that one does not stand to lose their investment. Aggressive forms of marketing are encouraged to ensure that a particular product stands out from other brands. Direct exporting may also involve the use of agents who are going to sell the goods on the company’s behalf in that particular market.
Partnership
Partnerships are often a necessary form of market entry and are required in some countries. Partnerships are crucial in that a company like Virago Footwear adopts the expertise and other strengths, such as knowledge of the market. Partnerships are emerging forms of market entry strategies that are working very well in lifestyle products and brands. Besides, collaborations with stars in sports, those who may have similar business models would be important in bringing in the customer base and the knowledge of the market. This market entry strategy is recommended as a secondary entry strategy owing to their higher rates of success and the younger demographic.
Market Exit Strategies
There are several ways a company may exit a company. A company may wish to exit a market due to several reasons, which may include unprofitability or constant losses. The company may also change its objectives as stipulated in the articles of association, which would render current business models unviable. Market entry strategies may also be undertaken to return a company to profitability and avoid further losses. One of the ways is through a merger. A merger is characterized by the merging or coming together of two separate entities to form one new entity. The objectives of merging may include bringing together the resources of the previous companies together to achieve more. Also, it may be to help one struggling company join with the positive aspects of the other.
Another way a company can exit a market is through an acquisition. An acquisition involves the acquiring of one company by another in that the acquired company ceases to exist, and the acquiring company absorbs its operations. This method may be preferred since it may mean that the shareholders of the previous company get a share of the more prominent company. Acquisition, especially by a company with a similar business model, will mean that the product will continue being produced without significant altering changes.
References
Al-Kaabi, M., Demirbag, M., Tatoglou, E. (2015) International Market Entry Strategies of Emerging Market MNEs: A Case Study of Qatar Telecom. Journal of East-West Business 16(2), 146-170.
Bandick, S &Sanneh, F. (2018) foreign market entry strategies. Mastersprogrammet i Företagsekonomi, 125-145.