Which strategy for foreign markets? The importance of the right decision

Strategies for entering a new market

It is therefore necessary before making a decision consider the real business needs to embark on one of three typical expansion paths in the foreign markets. These paths differ in the opportunities they can offer, the level of financial commitment and the degree of reversibility, and specifically they are:

Export through trade agreements which include agents and distributors. They may be advisable for exporting to countries considered of no primary importance or deemed excessively risky because they imply relatively modest levels of involvement/investment;

Transfer of technology and skills: company skills are enhanced by collaborating with counterparts located in the reference market. These transfer activities give exporting companies the opportunity to increase their profits in foreign markets characterized by significant entry barriers and therefore difficult to penetrate through more "traditional" forms of commercial entry;

Foreign direct investment: they are implemented through joint venture and M&A operations, and represent the major form of investment for companies that want to immediately have a structured and lasting expansion.  

Which strategy to choose for foreign markets?

Ultimately it can therefore be said that there is absolutely no strategy for entering a new foreign market that is more effective than another.

The three strategies presented can be complementary or opposite, depending on the company's growth objectives, its financial resources, personnel, know-how and product. Each company must choose the best one for itself on the basis of internal assessments that revolve precisely around its characteristics.

Subsequently, a complete picture will be obtained, with an analysis that keeps track of the costs and benefits that a given entry method can entail.

Entering a foreign market is a great opportunity, an exciting journey that leads to the growth of your business and which culminates in an increase in turnover and profits.

Octagona can confirm this, having contributed to the growth of numerous companies in 20 years of activity. If you too would like to penetrate a new market, but you don't know which of the strategies might be the most suitable for your company, then contact us by clicking on the button below: we will listen to you to propose the best solution and to build a successful export project.

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