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The Development Of The Global Market

Times have certainly changed, and the world has gotten smaller. We no longer have to wait for months for ships to return with products from far away lands to use with our domestic goods or to sell indecently. We have solve the question on how to overcome the issue of paying in local currency. So much so, we now measure the strength of a country’s economy by measuring how much it imports verses how much it exports. We’ve come a long way from all markets being local (some of which still remain), to markets that are global. Many of the hurdles of doing business outside your country has been resolved.

QUESTION: The module shared five ways to enter the global marketplace. Pretend for a moment that you are the owner of a successful domestic business that you would like to grow out to international locations. Which of the five options would you choose to use and why? Also pick another option and explain why you believe it would be more challenging for you and why? Give a little background of the company and the product or service it offers..

Sample Answer

Expanding My Business Globally: Selecting an Entry Mode

Company Background:

My successful domestic business is “Sun Haven,” a manufacturer of high-quality, eco-friendly patio furniture made from recycled plastic. Sun Haven furniture is known for its durability, comfort, and stylish designs that complement various outdoor spaces.

Global Market Entry Strategy:

Chosen Option: Exporting

Given Sun Haven’s current position and product characteristics, exporting seems like the most suitable initial entry mode for several reasons:

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Lower Risk: Exporting requires less upfront investment compared to establishing a physical presence abroad. It allows Sun Haven to test the international market with minimal financial risk.
Existing Infrastructure: We already have a well-established production and distribution network domestically. Leveraging existing partnerships with shipping companies and potentially international distributors minimizes logistical complexities.
Scalability: Exporting allows for a gradual increase in international sales volume. We can start with a limited number of target countries and expand based on market response.
Product Suitability: Sun Haven’s furniture is relatively light and stackable, making it cost-effective to transport internationally.

More Challenging Option: Joint Venture

While a joint venture offers potential benefits like local market expertise and established distribution channels, it also presents significant challenges for Sun Haven:

Complexity: Negotiating and finalizing a joint venture agreement can be time-consuming and require legal and cultural considerations.
Loss of Control: A joint venture involves shared decision-making and potential conflicts over brand management and product development strategies.
Finding the Right Partner: Identifying a trustworthy and aligned partner in a new market requires extensive research and due diligence.

Conclusion:

Exporting allows Sun Haven to test the international waters, build brand recognition, and gain valuable experience before potentially exploring more complex entry modes like joint ventures in the future. As Sun Haven establishes itself in the global market, we can re-evaluate our strategy and potentially explore options that offer deeper market penetration.

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The Development Of The Global Market

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Expanding My Business Globally: Selecting an Entry Mode

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