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Strategy enter mode Essay Example

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Strategy enter mode

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On the other hand, the experience acquired through similar initiatives in the past can help a firm to choose an appropriate strategy for entering a foreign market (Levi 2006). In addition, when trying to entering a foreign market a firm is expected to face a variety of forces (Albaum and Duerr 2008). Managing these forces can be extremely difficult depending on the firm’s market position and its objectives (Albaum and Duerr 2008). For this reason, a firm that attempts the entry in a foreign market need to be sure that it can face the challenges and risks involved (Levi 2006). According to Gilligan and Hird (1986) choosing a market entry mode requires the achievement of ‘a balance between costs, control and risk’ (Gilligan and Hird 1986, p. Based on the potentials of an organization to respond to the needs of the above three factors managers can decide to choose a particular entry mode rejecting another one (Gilligan and Hird 1986).The most common strategy for entering a foreign market is exporting (Ireland, Hoskisson and Hitt 2008). Particular reference should be made to direct exporting which focuses on the following practice: ‘products are sent from one country to another for sale, delivery or distribution’ (Ireland, Hoskisson and Hitt 2008, p. The specific mode of entry is quite common mostly because of the significantly low risks involved, as compared with other, similar, strategies (Ireland, Hoskisson and Hitt 2008). Also, direct exporting does not affect the rest operations of the organization involved (Doole and Lowe 2008). The limited need for resources is another important benefit of direct exporting (Doole and Lowe 2008); even the investment required for developing direct export activities can be low (Doole and Lowe 2008). Still, direct exporting has also an important drawback: it can ‘increase the vulnerability of firms to tariffs’ (Ireland, Hoskisson and Hitt 2008, p. Also, the quality of the products exported needs to be at the level arranged with the buyer; otherwise, the market image of the firm can be destroyed (Doole and Lowe 2008). Indirect exporting can be also used instead of direct exporting (Gillespie, Jeannet and Hennessey 2010). Indirect exporting is based on ‘the use of an intermediary established in the target market’ (Gillespie, Jeannet and Hennessey 2010, p. In this way, the risks involved can be

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preview essay on Strategy enter mode
  • Pages: 12 (3000 words)
  • Document Type: Essay
  • Subject: Marketing
  • Level: Undergraduate
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