Market Entry Strategies

A market entry strategy refers to a planned form of delivering and distributing goods and services into a new target market. In most cases, market entry strategies apply to the importation and exportation of goods and services to and from foreign countries and then distributing them in newly exploited markets.

The market choice strategy refers to the step that a business or an organization takes while it is attempting to penetrate a new market. Many firms and companies that develop an interest in servicing foreign markets often encounter difficulties when making critical decisions on more suitable and efficient entry mode. The business takes into account many factors in the process of realizing new markets. The market choice strategy takes into account factors that can be classified into three categories including the location advantages of the market, the ownership benefits of the firm and the internalization advantages of integrating the transactions.

Market expansion strategies refer to the factors that firms usually adopt whenever a business intends to expand its activities. The general reason for business expansion is generally to introduce the business products into new markets and sell them to new groups of potential customers. Various factors need consideration when a firm is attempting to expand its market. For instance, identifying the products that are particularly popular within the target market and attempting to introduce many products to the new market with the aim of accessing multiple customer databases is a necessity.

Market choice strategies and market expansion strategy are significantly dependent on one another. When a business entity decides to venture into a foreign market, it has to take into account the market choice strategy and the market expansion strategy respectively. A firm needs to, first of all, identify the target market that it intends to penetrate and sell its products. During this process, the firm needs to identify a suitable market to penetrate while considering factors that can enable it to achieve maximum returns.

After identifying a suitable target market, the business can look into whether it can further expand into the market by introducing new products to the target market. Thus, it is the market expansion strategy that the firm needs to adopt while it attempts to enter a new market. It is, therefore, evident that the two market strategies are interdependent on one another for a company to fully exploit its available resources while trying to enter a new market.

The two market strategies, however, contradict in matters of time and the target population. The market choice strategies do not rely much on the timing of introducing a new market to other businesses. A firm can identify a new target market today but decide to pursue and make its business entries into this new market at any point in time. The market expansion strategy, however, depends on timing principle as the target population may be particularly interested in one product at a particular point in time but then change to another product at another time. Timing is, therefore, everything when a business is seeking to expand into a new market.

Therefore, it is vital that any business entity is aiming to penetrate a new market needs to take into account these two market strategies and realize when and how to implement them. As a business student, I would advise any business with the aim of making more profits, intending to venture into new markets on the importance of market entry strategies.

References

Kotabe, M., & Helsen, K. (2014). Global marketing management.

Lymbersky, C. (2008). Market entry strategies: Text, cases and readings in market entry management. Hamburg: Management Laboratory Press.