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

Strategies for entering a new market

Before making a decision, it is therefore necessary to Consider the real business needs to take one of three typical expansion paths in the foreign markets. These pathways differ in the opportunities they can offer, the level of financial commitment, and the degree of reversibility, and specifically are:

Export through trade agreements which include agents and distributors. They may be advisable for exporting to countries considered non-primary or deemed excessively risky because they involve relatively modest levels of involvement/investment;

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

Foreign Direct Investment: are implemented through joint ventures and M&A, and are the major form of investment for companies that want to have a structured and lasting expansion right away.  

Which strategy to choose for foreign markets?

Ultimately, therefore, it can be said that there is absolutely no one 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 its product. Each company must choose the best one for itself based on internal assessments that revolve precisely around its characteristics.

Next, we will come to a complete picture, with an analysis that tracks the costs and benefits that a given method of entry may entail.

Entering a foreign market is a great opportunity, an exciting journey that leads to the growth of one's business and culminates in increased sales and profits.

Octagona can confirm this, having contributed to the growth of numerous businesses in 20 years of operation. If you, too, would like to penetrate a new market, but do not know which of the strategies may be the most suitable for your business, then contact us by clicking the button below: we will listen to you to propose the best solution and build a successful export project.

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