Essay: Major Modes of Entering Global Market
The first way of entering into a global market is through indirect and direct export. Occasional exporting occurs when a company delivers orders to a foreign country because the customer placed and order from there. Active exporting occurs when it is part of the company’s goals to cater to foreign markets and they do so intentionally. Companies can have a domestic based export department or division, an overseas sales branch or subsidiary, have traveling export sales representatives, or foreign based distributors or agents.
Using a global web strategy is also a way of entering into a global market. Overseas trade shows can be conducted via internet and eradicate the need of traveling from one place to another to make any sort of transaction. Many companies create internationally friendly websites that take into account the language of origin in the country and display prices in the respective currencies. The best example of this strategy would be a giant like google that has infiltrated the global market.
The third way to enter a global market is through licensing. Kotler and Keller say “licensing is a simple way to become involved in international marketing. The licensor issues a license to a foreign company to use a manufacturing process, trademark, patent, trade secret, or other item of value for a fee or royalty.”
Joint ventures occur when local investors get together with a foreign company and share the rights to the organization or the venture they are carrying out. For example one recent example is the joining together of Nike and Apple to create a chip that is inserted into the Nike tennis shoes which measures the amount of energy being exerted through the Ipod.
Direct investment is also a form of entering into a global market. Many benefits are involved in this type of investment such as cheap labor and less strict laws against certain types of production or manufacturing activities. An image boost is also created for the company because it creates more jobs in the country that it is investing in. The most beneficial advantage is the company has full control over the project or production activity because the investment was direct.
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