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Challenges of Strategy Implementation

In: Business and Management

Submitted By scolastica
Words 2080
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MODES OF ENTRY USED BY INTERNATIONAL FIRMS TO ENTER INTO NEW MARKETS.

TERMPAPER SUBMITTED IN PARTIAL FULLFILMENT OF THE REQUIREMENTS OF THE COURSE GLOBAL STRATEGIC MANAGEMENT, DEPARTMENT OF BUSINESS ADMINISTRATION, AND UNIVERSITY OF NAIROBI.

DATE17TH MARCH 2012

Modes of entry used by international firms to enter into new markets.
Introduction
A mode of entry into an international market is the channel which an organization employs to gain entry to a new international market. International firms use several entry modes to expand their businesses globally, and to enter into new markets, there are some basic decisions that the firm must takes before foreign expansion like: first they determine which markets to enter, when to enter those markets, and on what scale.
The decision on which foreign markets to enteris based on the nation’s long run profit potential.-The international firm looks in detail at economic and political factors which influence foreign markets.-Long run benefits of doing business in a country depends on following factors:- Size of market (in terms of demographics)- The present wealth of consumer markets (purchasing power)- Nature of competition. By considering such factors firm can rank countries in terms of their attractiveness andlong-run profit.
The time of entry is an important factor to be considered. Entry is early when an international business enters a foreign market before other foreign firms and late when it enters after other international businesses. The advantage is when firms enter early in the foreign market commonly known as first-mover advantages which include; it’s the ability to prevent rivals and capture demand by establishing a strong brand name; Ability to build sales volume in that country.so that they can drive them out of market; Ability to create customer relationship
The disadvantages are that thefirm hasto devote...

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