Today, in the era of globalization, brands across the world have been compelled to think global and expand their reach to international markets. This would eventually boost their growth and profit potential. Doing business in foreign markets is attractive for both big as well as small ventures and this is why robust international market entry strategies play a crucial role in making any brand a global success. But there are several challenges associated with a foreign market entry. Therefore, it is essential for companies to be careful while formulating market entry strategies since they may overlook certain challenges that might prove to be fatal for the business. In this article, we have listed a few important challenges that companies must watch out for before devising international market entry strategies. To help companies achieve this, we have suggested a few measures that can help companies combat these barriers efficiently.
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International Market Entry Strategies: Key Challenges
Monopoly in the international market
Monopoly in the market is one of the major challenges faced by companies who are looking to entering international markets. A monopolistic market is characterized by a group of companies accounting for large market shares, making them the primary providers of services or products in that market. Companies with a monopoly over the market often block the entry of other competitors or alternatives in the market by regulating distribution channels, using licenses and patents, suppliers, or resources. Therefore, for businesses to grow in a foreign market, it is important to come up with robust international market entry strategies and deal with this challenge effectively.
Poor legal aid
In international markets, foreign companies get poor legal protection and they are, therefore, unsuccessful in assuring the protection of their intellectual property rights (patents, copyrights, trademarks). Also, businesses face issues in the effective and fair settlement of their disputes. Furthermore, it is difficult for foreign companies to resort to legal actions over a commercial dispute in some countries because neither the court nor the law tends to support foreign ventures. So, it is very important for companies to gain proper clarity on the legal system in the country, before devising international market entry strategies.
Finding reliable local business partners
This is one of the biggest challenges faced while formulating international market entry strategies. There are several countries where there is extreme scrutiny over foreign companies venturing into the market space. Therefore, identifying reliable local partners becomes one of the most crucial market entry strategies to establish a market presence. However, limited acquaintance with the new market and lack of experience makes it highly challenging for foreign companies to find competent and trustworthy local partners.
With years of expertise in offering actionable market advisory solutions, Infiniti helps businesses devise effective international market entry strategies, identify potential challenges, review micro and macroeconomic environments, estimate, analyze, and compare competitor offerings with available alternatives, and build a sustainable route to market strategies. Additionally, Infiniti’s actionable insights help businesses to diversify, expand, and tackle market competition. Our market entry solutions help businesses to conduct Porter’s five forces analysis and analyze the readiness of the market for new offerings. Moreover, our solutions for market entry help businesses to construct coherent international market entry strategies by helping them to keep tabs on regional market developments and their potential effect on business segments.
Are you facing any of these challenges while devising market entry strategies? Contact us now!