Market Entry Methods

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Market Entry

What is a market entry?

A market entry is a strategy to increase the chances of success when entering a new market. This would allow you to expand your target customer audience and essential grow your revenue more.

Why would a business move to a new market?

Moving to a new market poses new challenges and risks, and is expensive, so why would a business choose this strategy? Here are a few of the reasons that make moving to a new market worthwhile.

• You can reach more customers and generate more revenue.

• Perhaps you have no more growth opportunities in your home market, in terms of revenue, so new markets provide new avenues to grow.

• Risk can be reduced by diversifying your business, as if one market suffers there are others to keep the business afloat.

What are the main market entry strategies?

The main market entry strategies to consider are:

Structured exporting: This is one of the most common and successful strategies being used to enter a new market and it’s to find the right partners and distributers to work with. Assigning the right distributers to deal with your consumers can increase your knowledge about the new market.

Licensing and franchising: Another strategy is allowing your business to adapt a licensing or franchising model which allows others to produce and sell products under your company’s name and offer the same services locally by using the brand. Your products would benefit from local manufacturing. There are a couple of challenges to consider when adopting this strategy which is the extensive need of market research and how they quality of their service can affect your company’s brand image fully.

Direct investment: This is also known as ‘Greenfield’ investment which refers to setting up a fully operation in the new market, with this investment it means over the full management of the business in the market. This can be a huge step however, it can bring immediate advantages.

Want to learn more?

What is a Market Entry Strategy?

What are the Four Marker Entry Strategies?

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