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Explain how to enter a foreign market

Explain how to enter a foreign market and what the company should do when it arrives.

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A company can enter a foreign market in a variety of ways, depending on its objectives, the relative attractiveness of the foreign market, the risk taking capability of the company as well as access to financial and other resources. Some of the most popular entry strategies are:

Exporting: Exporting is the simplest form of internationalization as it does not involve large resource commitment and can be relatively started in a short period of time. The advantages and disadvantages of this method are as follows:


Avoids cost of establishing manufacturing operations
May help achieve experience curve and location economies


May compete with low-cost location manufacturers
Possible high transportation costs
Tariff barriers
Possible lack of control over marketing reps
Local Agent Problems


Licensing involves a contractual arrangement whereby a company licenses the rights to certain technological know-how, design and intellectual property to a foreign company in return for royalties or other kinds of payment. Licensing offers a small business many advantages, such as rapid entry into foreign markets and ...

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Explain how to enter a foreign market