What entry strategies can firms adopt when contemplating new overseas markets? Which approach would be most feasible for firms going overseas for the first time?

What entry strategies can firms adopt when contemplating new overseas markets? Which approach would be most feasible for firms going overseas for the first time?

There are several entry strategies that a firm can adopt when they considered investing in to a new oversea market.

First of all, it is the exporting. This strategy is the company produces their product in their home country and transfers its product for sales in foreign countries. This enable the company to market its product oversea at a low resource cost and low risk but it also mean they have low ownership of foreign operation.

Next, the company can adopt licensing. It means a company in the one country makes certain resource available to companies in another country. The resource include trademark, pattern.For example, Heineken sells their license to Singapore local brewer to produce and sell the beer.

Furthermore, franchising is known as a form of licensing which franchisor provide foreign franchisee with a complete package of material, equipment and management system. For example, Mc Donald franchises their outlet to Singapore franchisors to sell their products in Singapore. Low cost to the company but limited control of the operating business.

Moreover, joint venture means the company share cost and risk with other firms in other country, to develop new product , set up sales and distribution network.  For example, Heineken joint venture with Singapore brewer maker, Tiger beer to see their products in Singapore.

Additionally, Direct acquisition. It means that a company which purchases a foreign company. For example, National Australia Bank had purchased Bank of New Zealand to expand their market share as well as position themselves in the market place.

Finally, it is the green field venture. It means a company builds a plant into a foreign country. This method can help the company to earn high profit, more control but it is  very costly and risky. For example, Mercedes Benz builds its plant in Alabama which is the first time it builds its plant outside Germany .

 For the firm which is the first time going to overseas market. It is suggested to use the export entry strategies. Even though, using this strategy may not be profitable as other entry strategies but it is less costly and risky. As we know , if a firm which invest in other country , export is a good entry strategy as  it can help the company to test the target oversea market to see whether they can position in the market or not. If in the future, they achieve a good result or enough market shares, they may then use other entry strategy.