The industrial revolution that started in the 19th century changed forever the way business organizations operated in America and abroad. Businesses were able to increase their production a lot which changed the way companies they distributed their products and services…
The globalization movement provided companies with the capability to realize business with foreign nations. The promotion of free trade among nations has help business organization penetrate marketplaces around the world. Out of the four major market entry strategies the easiest one to implement is exporting. Companies with little experience dealing with foreign markets start off by implementing indirect exporting. Indirect exporting occurs when a company uses intermediaries to facilitate the export of products. For example a company sells 1000 units to retailer such as Wal-Mart and then Wal-Mart sells its products in stores worldwide. The second type of exporting is direct exporting. Direct exporting can be achieved in several ways. A company can achieve direct exporting by establishing an overseas sales branch or subsidiary, by using traveling export sales representatives, and by establishing a domestic export department or division (Kotler, 2003). Exporting is the less risky of the market entry strategies because a firm does not have to invest in a lot resources to achieve market penetration. The second major market entry strategy is licensing. ...
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The company gradually after gaining much local publicity in Sweden endeavored to take over the world. It started spreading its branches among several European countries which started running successfully owing to the same cultural environment.
Unarguably, globalization is like an implacable avalanche. Whether we like it or not it is here to stay today and will persist in a number of years to come. My full appreciation for this point came with my understanding on this module, particularly with the three readings: “How Local Companies Keep Multinationals at Bay” by Arindam Bhattacharya and David Michael; Making Global Strategies Work by Chan Kim and Renee Mauborgne; and, “Global and Transnational Business” by Stonehouse, Campbell, Hamill and Purdie.
Many theories have emerged to explain the reasons why large firms tend to choose foreign direct investment over other options such as exporting, licensing, or franchising. These explanations center on market imperfections, transportation costs, or the argument that the company may lose its competitive advantage, especially if it shares knowledge through licensing.
A globalization strategy on the other hand allows a firm access to a global customer base of 6.9 billion people (Census, 2011). Firms utilize various market entry strategies to achieve globalization. The four primary market entry strategies are exporting, licensing, joint ventures, and direct investment.
This means that consumers in different parts of the world have access to the same goods and services. This has enhanced standards of living in developing economies. Globalization has enabled companies in the developed economies to seek business opportunities in the developing economies where demand is growing.
The market entry always contains three market entry decisions that are; where to enter, when to enter and how to enter. There are numerous modes of new entries to choose from, which include joint venture, franchising among other methods. The choice of entry modes are largely determined by risk assessment, the level of control, expansion strategy and the return on investment in the new market.
Though it came as a pleasant surprise for the company, but it helped the company in gaining wide publicity and improved the credibility ratings of its products. In fact, this national recognition proved far more advantageous than the number of marketing communication campaigns taken up by the company in the past.
According to the discussion organizations are required to deliver in terms of cost, quality, reliability and flexibility while keeping employees happy, machines operational and delivering products and services when and where the customer wants them at low prices and in a variable range of quantities.
It is critical for businesses to develop strategies of which products are needed in the market and how to develop these markets. Similarly, it is essential for companies to determine strategies for analyzing the geographical markets that would be worth pursuing and how best to enter these markets.
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