BUS615: International Marketing

This video introduces the factors that are important to evaluate when considering foreign market entry. An organization must determine the long-run profit potential of a market, which relates to the competitiveness of its economy and the value the company can create for that marketplace. This video explores the pros and cons of being an early or late entrant into the market and whether a company should invest on a large or small scale. Some of the modes of entry into a foreign market include licensing, franchises, and strategic alliances. We will explore this topic in more detail later.

This page some of the factors used to evaluate the attractiveness of an international market. Some factors will be specific to one business or industry, while others may relate to the market itself. Regulations, logistics, and culture all play a role. Before entering a market, it is essential to pick a mode of entry that integrates these elements into the process.

One of the first steps in deciding on entry into a foreign market is to evaluate its internal and external factors. Internal factors can include the size of the market, the organization's experience, and product differentiation. External factors relate to consumer demographics and demand, trade barriers, and competition. Companies need to determine their acceptable risk, level of desired control, and flexibility to choose between entry modes, such as by creating a subsidiary or using an agent. Watch this video for a closer look at these criteria.

Export, buy a franchise, or form a strategic alliance? These are some of the modes of entry into a foreign market a company can choose from. This section explores the advantages and disadvantages of each, including fast entry but low control, low risk but adherence to regulatory requirements, or known entities but high cost. As you review, think about the different industries you have experience in, and consider which mode of entry might be most suitable for a business in that field.

Indirect market entry makes use of third parties to gain a presence in a foreign market. Some of these methods include piggybacking, trading companies, export management companies, and countertrades. Direct sales allow an organization to sell directly into a country, either independently or through an agent or subsidiary. This section describes the various options available to businesses.

When deciding whether to sell directly or indirectly in a foreign market, a company must consider many factors, including its level of resources, its size, and the business and political conditions in the nation. This section explores the different approaches to exporting.

Watch this as you work through the unit and prepare to take the final exam.