In the internationalization decision, one of the first steps is to identify which markets you want to run the company, a decision of great strategic implications and at the same time very complex, since the decision should be made taking into account the resources and capabilities firm, limiting its risk exposure see international.
In addition, companies must develop assumptions about variables such as costs and future prices, competitors’ reactions and technology.
Despite this series of difficulties, it is clear that any decision must take into account the following elements:
Market size: sales potential is perhaps more a factor that will have greater weight in decision making. Many times it is difficult to project what may be the sales volume for our products, some data that can help to predict this variable are: gross domestic product, per capita income, growth rates, socio-economic segments, standard of living, level of industrialization , etc.
Ease and compatibility of operations: in general, companies are directed first to those countries that are perceived easier to operate. This perception is based on factors such as similar market conditions, the same language, geographical proximity, etc..
However, we note that a company can not be alone with this market category, but to do a deeper analysis of whether the market really is the best for the company.
Cost and availability of resources: the company must examine the costs of labor, raw material inputs, capital, taxes, transport costs, tariffs in order to determine which is the country most suitable.
Risks: no doubt that the final decision should be taken not only considering the expected performance of an export, but also should consider the risk involved in exporting to a particular country. The degree of risk, control, commitment and profits depend on the type of entry strategy by which the company chooses:
* Indirect Export
* Direct export
* License
* Excess
* Joint Venture
* Direct Investment
In general it should consider three types of risks:
* Risk competitive.
* Risk monetary and exchange rate.
* Political risk.
These factors we have identified are critical to making decisions about we go to market. With the amount of information that we have today, most of these data is available to any business. Anyway, taking a decision on these issues is a very difficult issue that must be done carefully as it can significantly influence the final yield obtained by the company.
Performing market research is a task that involves investment of time and resources, why, first, we must study the economic feasibility and secondly, it will take a good screening of the market to study only those represent a good opportunity for the company.
To select a group of two or three potential markets macroeconomic factors should be considered the target countries, general market factors, as well as cultural factors that may influence significantly the demand for our products or services.
After selecting this group of potential markets, must be passed to make a detailed investigation of them.
The research objectives should be:
* Identify demand
* Knowing the possibilities of access, insight and achievement in foreign markets and their rules, requirements and procedures.
* Know and tariff advantages granted by multilateral systems.
* Schedule outdoor marketing policy so that action plans directly lead to results.
* Reconciling the sales policy and policy with the real possibilities offered by foreign markets.
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Posted in Business Info, Key to success | Tags: International business, Performing market research, Strategic implications