International market entry strategy is very important when the company has a plan to conquest a foreign market. International expansion requires relevant preparation. Analysis of the competition has to be performed. Read the text to find out what else should you pay attention to before entering international markets.
International market entry strategy – table of contents:
- International market entry strategy
- Strategy is key to success
- Factors that influence international sales
- International conquest – what else is important?
- International market entry strategy – Summary
International market entry strategy
The Statista report states that global retail sales on the Internet have reached approximately 4 billion US dollars in value and are still growing. International expansion is a chance to promote the brand and increase profits. Therefore more and more companies decide to conquest international markets.
The research shows that 63% of Australian clients and 54% of Canadian and Russian clients decide to shop outside their countries. What is interesting, clients from Asia are equally eager to shop from international online stores. Cross-border trade is used by residents of South Korea (21%), China (19%), India, and Japan (both countries 15%).
Before you will start to sell your products abroad you need to plan it first. The international market entry strategy is key to achieving success and running a profitable business.
Strategy is key to success
Each business that wants to be present on the international stage has to possess a long-term action strategy. Important decisions cannot be made overnight, without previous preparation – they have to be preplanned ahead of time and based on the knowledge acquired through the analysis of many different factors. International online stores, that run activity on many parallel markets can function effectively thanks to the international market entry strategy their companies have.
There is no universal method of strategy creation. Each company has to design its strategy based on the characteristics of the market and the features of the organization. You should see around corners, be flexible, and be ready for changes from the start to be able to adjust to the new market.
Factors that influence international sales
Before entering international markets the company should check all the internal and external factors that could have any impact on such activity. External factors are demand, market potential, and conditions for doing business. Internal factors are strategy, resources possessed, and ability to compete with international companies.
Clients have to be ready to buy products from international online stores. The analysis has to check the interest of the local consumers. Are products offered by the company needed in this particular market? Subsequent marketing activity has to be based on the research. Some of the marketing strategies will include communication with clients.
Before you decide to enter the selected market, you have to check its volume, potential, and degree of development. It is crucial because it will be easier to appear in emerging markets, where the position of other entities is not as strong as elsewhere.
It is necessary to check if a given market meets the conditions of running a business. What is the stage of technological development of the country? Are there enough clients with access to the internet? What is the structure of servers, and are they safe for online transactions? Before entering the foreign market you have to know the answers to all those questions.
Each company has to capture the right moment when it is beneficial to start with international sales. The company should already have a stable situation in the local market to take the risk of moving with the activities abroad. The owners of the company have to possess the financial resources that can be invested in new foreign enterprises.
Each company has to consider all the stages of order processing – which processes will be dealt with by its resources, which will be outsourced to external entities such as delivery, parcel, post, or logistic companies.
More and more companies with similar profiles enter the international market. The analysis of the competition is essential to check the given commercial zone. How many sellers offer their product that is already present on the market? What are their prices? What is the quality of their products? What are their marketing activities? Everything has to be checked in depth.
International conquest – what else is important?
Before entering foreign markets the company has to check all tax and legal provisions in force in given countries. Most of the law is applied only locally, but as soon as we enter the foreign market, we will have to follow all the rules.
International market entry strategy – Summary
Less complicated is the sales in European Union. The EU Directive sets out the rules for the online transaction. Accordingly, to EU law, each online store has to have a policy, where the return policy will be explained clearly to the clients. In the case of the countries that don’t belong to the European Union custom clearance will be necessary.