Briefly explain the ways of entering the market. List examples that fit these methods
Firms can use different strategies to enter foreign markets based on their size and marketing objectives. One of the strategies is a direct market entry. This occurs when a firm decides to open a new branch in a foreign country. This approach is very appropriate for large firms that have the capacity to finance the project of putting up new plants and offices. For example, Pepsi decided to enter the South African market because it had the capacity to do so.
The main benefit of this strategy is that it gives a firm full control of the new branch in the foreign country. Such a firm will also enjoy all the benefits that come with this full control. However, it is important to note that it is an expensive strategy that is suitable for large companies. Another method of entering a foreign market is through joint ventures. Joint ventures are appropriate when the size of a firm is relatively small or medium-sized. A foreign firm will look for a local organization in the targeted market and enter into a joint investment. General Electric and General Plant of Egypt formed a joint venture in Egypt to take advantage of the opportunities in the construction industry.
Franchising is another approach that a firm can use to go global. This strategy is popularly used by firms that are unwilling to enter specific markets because of various reasons. In this case, the franchiser allows the franchisee to use its brand name, logo, and other brand attributes at an agreed fee. However, the franchiser will not incur any cost of putting up the business. A good example of a firm that has been using this strategy is Dorman’s Coffee Experts. A direct export is another way of entering a market. For example, Toyota may decide to export its Japanese made cars to India. Instead of establishing a production plant in India, Toyota will only use agents in the foreign market as the distributors of its products.
Why is it important to make adjustments in market potentials and market share figures?
Making adjustments in market potential and share figures is very important. In a competitive market environment, so many factors change from time to time. When a firm employs effective marketing strategies, it expects to increase its market share. An increase in the market share means that the market potential has increased. When this happens, a firm will need to adjust its production capacity to meet the new potential in the market.
A firm that has proper management structures and marketing strategies is expected to grow. This growth is determined in terms of the market share figures. Growth in the market share may require a change in the production strategies. However, it is also a reality that the market share of a firm may drop. This may happen due to a number of reasons. For instance, competitors may eat away part of the market that a given firm used to dominate.
This means that there will be a reduced number of clients to purchase the products of a given firm. A firm will need to react to such changes appropriately in order to avoid producing goods that lack market. The adjustments in the market potential and share figures, therefore, help in ensuring that whatever a firm produces is in line with the market demand.
For a small business of your choice, show how you would evaluate non-quantitative factors, such as goals, experience, lifestyle, and content of work
When operating a small restaurant, it may be appropriate to evaluate the non-quantitative factors. One such factor is the goal that should be achieved within a given period. The goal can be evaluated by determining the market trends of a firm and the milestones that have been achieved over a given period of time. For instance, the management may have a goal of expanding the capacity of the restaurant. This will be evaluated after the period has elapsed to determine if the goal has been achieved.
The experience of the employees and the firm, in general, may also need to be evaluated. This can be evaluated through the help of regular patrons. The management can engage such customers in an interview in order to determine their views about the quality of products offered to them and the service delivery methods at the restaurant.
Employees can also help in evaluating themselves and their colleagues. The lifestyle of the employees and their level of contentment may also need to be evaluated in order to determine if the benefits they are given have positive impacts on their lives. The management can monitor the lifestyle of the employees directly by observing the changes they make in their dress code and the means of transport they use when coming to work. However, that may not be the best way of evaluating their lifestyle and level of contentment. It may be necessary to engage the employees in an interview. The employees are better placed to determine if the lifestyle of their colleagues has improved. They can also help in determining whether or not the employees within this restaurant are contented with the benefits offered to them.