Strategy Formulation

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A primary goal of every privately owned business is profit. The development of marketing strategy for any product proceeds on the basis of domino effects obtained from the study of industry and competition. By the revelation of business strengths and weaknesses, for the growth of a wide range of strategic plans for the successful administration of environmental openings and threats is called the Strategy Formulation. It comprises exploratory or redefining the corporate or project mission by indicating attainable goals, emergent strategies, and setting execution procedure. Strategy formulation is germane both for organization’s initiative in general and for individual product. Market strategy is defined as an action plan for influencing customer choices and obtaining a market share. Market strategy should entice customers to buy the product or service.

Entering into a foreign market

Present Communication technologies have flattened the globe and we all become the citizens of a common global village. This new business paradigm has compelled the manufacturing companies to sell their products in foreign countries to get a global presence and recognition. There are different strategies and models available to enter into a foreign market but selecting the best possible strategy is a challenge. Researchers have claimed that selecting the appropriate strategy to enter into a foreign market is a critical business decision (Chung and Enderwick, 2001; Nakos and Brouthers, 2002)

There are several factors which have a direct impact on the mode of entry decision of a firm into a foreign market. Some of such factors are:

• Transfer of technology (Mattoo, 2000)

• The expatriates (Chung and Enderwick, 2001)

• Size of the company (Leung et al., 2003)

• Cultural differences between the host and foreign country (Gillespie, 2002)

• Political and environmental uncertainty of the new country (Cristina and Esteban, 2002)

• Rate of foreign exchange (Baek and Kwok, 2002) etc.

Entry Modes Available

Following are some of the options available to the firm which is interested to enter into a foreign market:

• Exporting

• Joint Venture

• Wholly owned Subsidiary

• Licensing (Young et.al., 1989)

Exporting

It is the process of sending locally manufactured products to the foreign country and the foreign agents of the firm take care of the marketing of the product. As the products which are being exported are manufactured locally, thus no investment in manufacturing facilities in target country is required and the manufacturing company has to bear only the marketing expenses.

This mode has several advantages as it minimizes the investment and risk and enhances the speed of entry. However it has some disadvantages also.

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