Common Market Entry Strategies in International Retailing
Common Market entry strategies in International Marketing
In internationalization, retailers adopt certain entry strategies to foray into foreign markets. Various entry strategies and their comparative merits and demerit are discussed blow.
| Market Strategy | Meaning | Advantages | Disadvantages |
|---|---|---|---|
| 1. Acquisition | Taking over a retail company already established in the market. | Fast substantial market presence. | High costs and risks. |
| 2. Joint venture | Establishing a company with a partner, most usually one which is indigenous to the market or has experience of operating there. | Each brings own skills, market knowledge and format experience. | Clash of company cultures possible. |
| 3. Organic growth | Opening new outlets using existing brand or creating a new brand. | International process, can learn and adapt. | Slow growth, delayed returns on investment. |
| 4. Share holding | Acquiring shares of a retailer already operating in the chosen market | Reduces risk, can learn about company from the inside and decide whether to invest. | Culture clash between teams of management. |
| 5. Franchise | Allowing entrepreneurs to open outlets under a single brand which are operated under certain controlled conditions. | Very fast and low cost way to roll out stores. | Limited control, needs suitable franchises. |
