With so many options for international market entry, it can be difficult for a company to decide on the strategy that will meet its strategic objectives with the most success. This is why strategic planning is so important; different markets and industries will require a different approach.
To select the best strategy, a company must consider the markets it has selected, the products or services it wishes to sell and its overall aims for international trade. The range of elements to consider might seem daunting, but without a full analysis of the situation for each potential market, a company might select an inappropriate strategy.
Below is a list of factors you and your company should consider, and some questions you might ask:
- Company goals: What are our objectives for entering this market? Which strategy will best meet these goals?
- Size of company: Does our size mean some strategies might not be possible?
- Resources: Are there strategies we cannot use because of a lack of resources, such as direct investment?
- Product or service: Which strategy will align best with the product or service we’re offering?
- Remittance: How will each strategy impact the price we can get for our product/service? (For example, would direct importing be so expensive that our product will have to be overpriced?)
- Competition: What is the level of competition in the market? What entry strategies are our competitors using? Which strategy will give us the best competitive edge?
- Intermediaries: Will we need to work with intermediaries? Are there intermediaries we can use in the market?
- Control: How much control does our company need over activities? (For example, direct exporting enables a lot of control, whereas indirect importing does not.)
- Investment: How much investing will be required for market entry?
- Time: How much time is available to enter the market? Do we need a strategy that will provide returns quickly?
- Risk: What level of risk can our company face? Which strategies are the least risky?
- Flexibility: How much flexibility do we need? Can we withdraw from a market quickly if we need to?