Market entry strategy
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A market entry strategy is the planned method of delivering goods or services to a target market and distributing them there. When importing or exporting services, it refers to establishing and managing contracts in a foreign country. == Factors == cxvcv Many companies successfully operate in a niche market without ever expanding into new markets. Some businesses achieve increased sales, brand awareness and business stability by entering a new market. Developing a market entry strategy involves a thorough analysis of potential competitors and possible customers. Some of the relevant factors that are important in deciding the viability of entry into a particular market include Trade barriers, localized knowledge, price localization, Competition, and export subsidies.
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Strategies
Some of the most common market entry strategies are: directly exporting products, indirect exporting using a middleman, and producing products in the target market.[1]
Market entry and trade risks
Some of the risks incurred when entering a new market and start domestic or international trade include:
- Weather risk
- Systematic risk, different from systemic risk, the systematic risk is the risk inherent to the entire market or an entire market segment [2]
- Sovereign risk
- Foreign exchange risk
- Liquidity risk
While some companies prefer to develop by their own their market entry plans, other outsource to specialised companies. The knowledge of the local or target market by those specialized companies can mitigate trade risk.
Sources
- Reviving Traditions in Research on International Market Entry, Po Li (Auteur), T. Li, JAI Press, 2003 ISBN 0762310448 ISBN 978-0762310449
- On durable goods markets with entry and adverse selection,Janssen, M. Roy,CANADIAN JOURNAL OF ECONOMICS,2004, VOL 37; NUMBER 3, pages 552-589 ISBN ISSN 0008-4085
