Four Barriers You Need to Overcome Before Planning Your International Market Entry Strategies

October 26, 2018

The rising rate of globalization is prompting brands across the world to ‘think global’. In the long term, every modern business wants to expand its reach to international markets, which would eventually spike its profit and growth graphs. The lucrative scope of doing business in foreign markets is attracting many ventures, big and small, to explore these opportunities. However, while formulating international market entry strategies, chances are that a company might overlook certain barriers that might prove to be fatal for the business. Here are some of the key barriers that companies must watch out for before formulating their international market entry strategies:

Monopoly in the market

The existence of a monopoly in the market often poses a tough barrier for companies planning to build international market entry strategies for their business. A monopolistic market situation is when one company or a group of companies hold an entire chunk of the market share, making them the primary providers of products/ services in that market. Monopolies often block the entry of other substitutes or competition in the market by using patents and licenses, controlling distribution routes, resources, or suppliers, or by using pricing strategies. If companies entering a new market cannot access an efficient or cost-effective distribution system because incumbent companies have greater control over the distribution networks, the chances of their goods or services being successful is highly unlikely.

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Finding reliable local partners

In several foreign countries, there is extreme scrutiny over the international companies venturing into the market. In such cases, it is advisable to include identifying reliable local partners as one of the critical international market entry strategies. However, the lack of experience and enough acquaintance with a new market, foreign companies can find it highly challenging to find trustworthy and competent local partners.

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