A successful entrepreneur is the one who constantly finds new ways, strategies and opportunities to explore the commercial era. The rapid change in global economies and customer groups has made it essential to expand the business and enter into new market segments for better returns.
So if you are an entrepreneur and looking for the best strategies to enter a new market then the article is for you. As we are gonna discuss the prime market entry strategies which can provide you with a roadmap to explore the foreign markets.
Before You unravel these amazing Strategies let's check out why it is imp to learn them. Well understanding the market entry strategies can help you in determining which strategy offers the most benefits to you.
So stay with us as in this article we will discuss and explore market entry strategy and its significance in expanding the business beyond the local limits.
What are Market Entry Strategies?
When it comes to market strategy a question that appears in our mind is how we enter a new potential market, Right? Expanding your venture to new markets allows you to reach potentially vast numbers of new customers and grow your revenues massively.
However, the process is complex and filled with various complications but by taking the assistance of proper market strategy, you can hit the stroke. As it is a way of maximizing the chances of success when moving into a new market segment.
In other words, market entry strategies are the methods which are used by organizations to plan, distribute and deliver goods to the global markets. However, the cost and level of a company’s control over distribution may vary depending upon the strategies you choose.
Besides this, you may also consider the current competition and consumer needs of the potential market. As it would guide you in establishing the product or brand more efficiently. So you should know how to identify consumer wants and needs to become a successful market entrant.
Significance of Market Entry Strategies
First up, why should you consider moving to a new market in the first place? As it is challenging and expensive, what are the reasons which motivate you to expand the business in new market segments? Well, here are some of the main ones:
1. To have a Diverse Group of Customers and Making More Money
The first and most prominent aspect of entering a new market is of course to grow your business and increase the revenues by selling more products to different customers.
2. There Might Be More Opportunities for Growth in Your Home Market
Expanding into new markets can be your only option for growth if your current market has reached its revenue ceiling.
3. Reducing Risk by Diversifying the Business
You'll have alternative markets to rely on if one struggles for any reason. In short, the market entry strategy enables you to approach the different customer groups and provide the goods and services to a large number of consumers.
Market Entry Strategies
Here some prime market entry strategies are described, have a look:
Piggybacking is the best option for you if you have contacts who work for your organization. As they can help you in selling your products in the overseas market.
In other words, it is a strategy where you can ask other businesses whether they would sell your product in a foreign market. And if your company and other organization get ready on it then both the parties can have the profit sharing agreement.
Moreover, your business can reduce the risk of selling internationally by delegating international marketing to a partner while concentrating on domestic retail.
Franchising is another prominent strategy which can help you in expanding your business in the international markets. It is a chain retail company where an individual or group of buyers pays for the right to manage branches of the business on the behalf of your company.
However, it requires brand recognition, as a consumer in your market territory knows about you and your product and has the desire to purchase it. But in the overseas market, they won’t be aware of it so in this case if you have a strong brand image then only you can sell the products in the overseas market through the franchising process.
It is the most common and easiest way to expand the business. Outsourcing involves hiring another company to manage certain aspects of your business.
As the market entry strategy, it refers to making an agreement with other organizations to handle international product sales on your company’s behalf.
Businesses that choose to outsource may give up some control over how their products are sold, but they may be able to justify this risk with the money they save on labor costs.
Licensing occurs when a company transfers the right to use or sell a product to another company. If you have to expand the business in the overseas market then this can be the most convenient way for you. You can choose this method if the product is in demand and the company to which you are going to provide the license has a large market.
Globalization and liberalization have made it simple to enter overseas markets. So why should we not take advantage of it?
As there are several ways to enter a new market. You can choose anyone at your convenience and expand your business in the international markets. The goal of the market entry strategies is to enter the new commercial and trade territories successfully and achieve sustainable growth. So lead ahead by building a customer base and grab the opportunities by capturing the different markets and customer groups.
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