In order to thrive and in some cases even survive in today’s global economy, many companies
must enter and compete in this ever expanding arena. There are many reasons that drive a company to expand into foreign markets and they can include the goal of acquiring new customers, capitalizing on its core competencies, and to “spread its business risk across a wide market base-” (Bethel University, 2011, p.141). But for whatever reason a company has for competing globally, once that decision is reached it must then choose how it plans to enter into foreign markets. In this paper, the writer will briefly examine six strategy options that are commonly available to companies that have made the decision to expand beyond its borders (Bethel University, 2011). These strategies include; (a) export strategies, (b) licensing strategies, (c) franchising strategies, (d) localized multicountry strategies, (e) global strategies, and (f) strategic or joint venture strategies (Bethel University, 2011).
Export Strategy
Using existing domestic production facilities as a source for exporting goods is an excellent way for a company with limited capital and little or no presence in international markets to gain entrance (Bethel University, 2011). But even so, “companies need to evaluate and carefully assess the advantages and challenges of exporting before committing resources” (Teble, 2007). There are many advantages to pursuing an export strategy including increasing sales and profits, gaining global market share, lowering per unit costs, compensate for seasonal demand, create potential for company expansion, and sell excess production capacity (Teble, 2007). Tempting as these advantages sound, there can be risks or challenges associat...
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...Bethel University, 2011, p.142). Many factors have to be evaluated and there are no guarantees that choosing one or more of these six general strategies will assure a successful outcome. What is certain, however, is that without fully understanding “cross-country differences in cultural, demographic, and market conditions, location-based cost drivers, adverse exchange rates, and host government policies…” (Bethel University, 2011, p.160) you are almost surely setting your company up for failure in the international marketplace.
Works Cited
Bethel University. (2011). Strategy planning. Boston: McGraw Hill.
Teble, S. (2007, January 16). Advantages and challenges of exporting. Retrieved from http://
www.expertbase.org/wp-584-238.html
Benady, D. (2010). Using licensing to build a mega brand. Marketing (00253650), 32-33.
retrieved from EBSCOhost.
.... To stay in the business and possibly increase the market share and able to compete with the competitors.
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