Issues that face market entry srategy


Market strategy plays a major role for the development of business. It is important and necessary for every business to make market strategy to penetrate the market. Without a proper market strategy is very hard and unable to make space in the current business environment. Effective and efficient market strategy enables a firm to achieve its desired goals and mission. Different companies adopt different ways to do market strategy but in big multinational companies special staff works for market strategy which guide the senior managers. These staff members work on fact, figures and technical issues and then decide which country and area is suitable for the business. It is very easy to develop to a strategy for home country as compare to international market strategy. In international market strategy we keep in mind some points.

In the making of international market strategy you have to deal lot off situations like dealing with government, political issues, cultural issues etc.

Different Market Entry Strategies

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There are many ways to enter in the international market. Through which a company can enter in any other country and run their business successfully.

Direct Exporting

It is very common and old way which most of the companies use to enter in the any other market. They make their goods in one country and sell these goods and services worldwide. In this strategy no direct cost on production but they need cost only for marketing of the goods and services. In this method less risk of production, understand the market and reduce the risk to run overseas. To adopt exporting method company required four types of parties like, relationship between exporter and importer, government and transportation.

Indirect Exporting

In this exporting the company sell their goods to third party and that party sell their goods in the local market.


Piggybacking is also a tool which companies use to trade internationally. Like a company use a little exporting skill that a company really has the exporting skills. This is suitable for the companies which are located in same geographic areas. The manufacturer of Zimbabwe piggy back with South African countries they both import potassium outside their countries.


Licensing is also a part of international market entry. In licensing the one country permits the firm to open its plant. You can license is bit similar to franchising. The company uses manufacturing, processing and trademark too. Licensor will receive the royalty. Licensing is also less risky method of international market entry. Coca cola is best example of licensing.


Contracting is also very important part of market entry strategy. In contracting, the company contract to the foreign company to make goods on behalf of that company. It is clear that company reduces the exporting cost.


Franchising is very big and important factor of marketing entry strategy. It is a form of licensing. In case of franchising the company try to find out the local investor and give the whole responsibility to him. In franchising the company does all marketing their self and take a fixed ratio of dividend. The franchise holder gives the proper training to all staff member and provides best customer service. Company does proper research to open its franchise in any country because company doesn't want to lose its image.

Manufacturing Abroad

In this case the company's last decision to manufacture in the host country. In this case the host country gives some incentive to the investor. Like some tax relaxations because the new investor would prove a big hand in employment.

Joint ventures

Joint venture is an important part of market entry and mostly companies use this to get in to the international market. Joint ventures are less risky and better quality according to the host country. In joint ventures companies share all their knowledge and expertise to produce maximum output.


Merger and acquisition is also a form to enter in any market. If any company want to go in any country they try to do merger share their business on equal status or try to buy any business which is already in the market.

Different companies and Market Strategies

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Different companies adopt different ways to get enter in the different markets after completing their market surveys. Every company adopt a different way according to the any other countries legal, social and cultural environment. Because it is a very critical matter to adopt a market strategy to start a business in any place. The company look in too many things before to start their business in any country. It doesn't look complex but for the successful running of business it is very necessary. Company does the critical survey of the any other country before to start its business in any other country including that country's rule and regulation for foreign investors and tax polices too. For example: -

If we talk about any fast food chain which want to start business in any other country it is would be an easy process for the company because food item are commonly same in the every part of the world but the issue is taste. The fast food chain need to adopt the change according to the taste if people. Like if McDonald wants to go from USA to Asia like in Pakistan or India. The best way would be to open its franchise in that country because to export food from USA to Asia cost too much and food is a tangible item too. And the second issue is that the people in Pakistan and India like more spices that American people so McDonalds should adopt this as well and the same procedure would be follow for any fast food business.

If any car maker have plan to go in Asia like BMW want to enter in the market of Pakistan they should not open their manufacturing plant in Pakistan because the people do not buy that much BMWs in Pak so therefore company would follow the exporting strategy to get in to the market.

Like telecommunication organization can expand its business in any country easily. People using communication services everywhere in world and it would not be a major problem for any company to go anywhere except competitors.

Market Condition and Risks

A company does market and risk analysis before to star its business in any country. It is necessary and beneficial for the successful business. In market condition and risk analysis contains on following issues.

Political Stability

In the market analysis the political issues are very necessary. Because, if any country which is democratic and politically stable is the better business environment. Normally, those countries are better to do any business. Country should have good political history and fiscal policies.

Economic Stability

A country should have economic stability as well for the healthful business environment. The growth rate, income, interest rate and inflation have great value for the success of any business.


A company should critically analyse the transportation and communication channels as well for the success of any business.

Business Ethics

Business ethics are also having great importance in the success of any business. Culture, language and ethnicity plays very important role in the success of any business and company takes its all decision after the deep consideration of all these factors.


The industry of the host country and what kind of challenges they are going to face in that country matters a lot. The growth of any business depends on competitor's analysis market too.

Labour Cost

Labour cost is also a very big and important factor in the risk analysis. Any company always try to find out the cheapest labour to meet its all requirement and it also necessary for the profit maximization.

Cultural Distances

Cultural distances are very important and play vital role in the success of any business. It is must for any company to do proper analysis of any culture before to start any business anywhere in the world. Like eastern culture is different from the western culture. In culture you have to look on the religious issues as well. Like in Asia the culture of United Arab Emirates and Pakistan is different from the western culture and religion. If any organization takes initiative to start any business in these areas they should be conscious about all these issues.

Geographic Distances

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Geographic distances are also very important for any business environment. Like the size of the country and common border issues are very important for any business to take in to account.


Bradley F (2005) International Marketing Strategy, Prentice Hall, 5th Edition, Pp 283to 287

Lymbersky C (2008) Text, cases and reading in marketing entry management, Management Laboratory Press, 1st Edition, Pp 23 to 26

T. Moran R, R. Harris P and V. Moran S (2007) Managing Culture Differences. Butterworth Heinemaan, 7th Edition, Pp 24 to 30


Part B


Franchising is a way to go abroad to start a business with the brand name. This is the way through with you can get into business quickly. To buy a franchise is a complicated method. You have to buy the right to open a franchise and you would pay a fixed ratio on your profit to the franchisor as well. It is important to understand the concept of franchising very well. Normally, people think that they just buy a franchise and will start their own business. Franchise documents are full legal documents in favour of both parties.

It's very first stage for getting information about the franchising that consider the work of selecting the site developing a franchise concept. It's also decided about the product or services and area where the franchising has to be start. If someone wants to look the unique or the best franchise concept you might want to look at WSI. This franchise describe on a brand new business approach that must be profitable.

It gives the basic training identifying the information or methods that should be used in increase the level of product and/or services.

The Franchisor must be registered with namely Business Company, to people knowing must be important part protected and secured where the people understand about to be secure. It also gives them with the lawful or legal right to allow others to use their registered trade where they can do whatever they want.

What is Business Format Franchising?

Franchising is such kind of a business relationship that hold the franchise in which the franchisor who running it, owner of the business providing the services or product assigns to people, the right to market and distribute the and let the business name use by them for a fixed period of time. The franchisor provides a licensed after given them a satisfactory training privilege to do business, merchandising and management in return for a consideration from the franchisee".

Actually we know that Franchising is not a complete business itself that working without any assistance or proper work that is given by the main business company but a way of doing business. It we can assume is a marketing concept, method of distributing goods.

In UK the fastest growing Business format franchising has spread too virtually in about every sector of the economy in the UK. From the development what is called business format franchising the most popular use of the term has arisen. Normally the business format franchising is used to mainly explain the different parts of business relationships, including licensing, distributor.

That is the more important thing that whenever the franchiser start the franchise it should be in the mind that always franchise normally become Larger, and it also should do the campaign for the advertising and a solid trading name. In any aspect and any time the customer can ask anything about the product and services that you will be giving them

Franchising in developing and Capitalist Countries

As we know very well most of population in world live in the developing countries. Market saturation is increasing the competition in the domestic market day by day. This competition forces most of the companies to go abroad and start their business there. In the current business environment the opportunities are decreasing in the developed countries like Canada and Western Europe and this thing forcing more of the franchisor's to go in the emerging economies. It is very easy to set up a franchise in any developed country but hard to sustain because business activities getting scare in the developed countries and this scarcity forcing the mostly US based franchisor to go in the emerging economies because 80% of the population live in these countries.

Franchisees more motivated than employees

When any one buy the franchise of any brand he tries to make it more successful than an employee because when any one buy the franchise of any brand he loves that brand. This is the main reason that he bought the franchise. Franchisee takes every initiative to make rapid expansion. This is the reason which makes franchisee more motivated than employee.

Franchisee and Local Knowledge

It is necessary for every business before to start the local knowledge of business environment. Any way if you think about your way of the working and your business is going on in a right path and it's definitely is suitable for franchising then definitely it could be the best and well one of the option. Franchising is kind of the business that allow the person can increase the way which can be helpful in your business without any kind of the big allows you to expand your business without the need for a big and very huge financial investment, it makes the business person who can easily control or reduce the risk or it can be a out of danger.

So, if you think you are the best to work and your business that are going to make is the better or suitable your franchise for the business? Your business needs to have certain characteristics if it is to be a successful franchise:

1. Is it necessary to get a better management experienced? A brand which can be recognized easily by the people, and the back record for the success in your market? Or any product that you have made or services that you have done is that all have been proved to be needed?

2. What do you think about your product or services, is that any kind of speciality that you are going to be represent in a best competition for your betterment or with the strong unique selling point?

3. It would be the best for yourself if you think that you can easily get 15 to 20% return and if not then offering is less attractive to franchisees.

4. That's absolutely rubbish thing if u thinks that because of any kind of important work you are unable to run your business and the business can be handled to such kind of the person who never knew before, but you are teaching about the business and expect that he or she can run this business for few weeks? It is really not be well for franchising.

Franchisee and Business expansion

Franchising is an interesting business concept which attracts the people to buy a franchise. When any one invests its money in business he gives full attention to business to make more profit able day by day.

Advantages of Franchising

1- Any kind of supplies that going on in the business that is to be buy, franchisee must get the valuable or considerable guidance to ignore or avoid shortage or surpluses.

2- Whatever the business is going on in a good well behave or organized part of the world's system, in this situation the franchisor must get the services or start up package. With this kind of the great system it always get planned and launch assistance, for the purpose of the get finance, training for the franchisee and top management workers in all aspect of the business.

Disadvantages of Franchising

There are no of problems occurs in the business format franchising such as its handling very hard especially when they are highly well working in the area or they have already have a big experience for the way of the working, trading etc. If the most poor or ineffective support by the franchisor is being giving or have been given, it could face some questioning of the franchise relationship. (Pettitt, 1988).Suppose the franchisor is most powerful in the way of the working and getting huge benefit or profit from the franchisee and suddenly its feeling wrong or abusing itself than franchisee can make the group together to negotiate on more equal terms with the franchisor.


B. Murphy K (2006) The Franchise Handbook, Atlantic Publishing Group Inc. 1st Edition, Pp 17 to 27

JR. Spinellis S, M. Rosenberg R, Birley S (2004) Pathway to Wealth Creation, Prentice Hall. 1st Edition, Pp 2 to 27 ""&HYPERLINK ""id=115068 ""&HYPERLINK ""siteLang=2HYPERLINK ""&HYPERLINK ""action=blogTemplate