Importance of Foreign Market Entry

For a channel organization to grow, it has to ceaselessly set out modern opportunities to exploit. Globalisation is a large driving force that has conduct to the trend of the rising itemise of business organizations operating beyond their main office country. As with globalisation,there is now a decrease in trade barriers which makes doing business abroad easier. Likewise,there is also an annexd in the number of competitors in the topical anaesthetic trade and many a times, a ecesis has to expand into a new foreign market so as to achieve a higher market share.One major pushing force for a organisation to go abroad is the limited opportunities in the local market which could either have no need for the organisations offerings or the market could be quite saturated. A global market,on the other hand,offers ageless possibilities and a bigger market. Consider a small country desire Singapore which only has a tribe of close to 5 million, a business organisation seat do s o much to a greater extent with an expansion overseas whereby the population size is many times the local population.Local companies like Eu Yan Sang (traditional chinese medicine) or stellar(prenominal) Taste have their products located in different parts of the cosmea where there are definitely a take on for it. Consider the Chinatown in London where many Chinese nationalities are currently residing/studying at. Chinese products that are found in their home countries are bound to appeal to them due to the brand familiarity as well and if there is a demand for such products,business organisations can reap from the benefits by supplying these products.This is also the skid for many agriculture industries whereby the production of the products are far much to a greater extent than what the population can consume. The amount of coffeebeans that are harvested in Latin the States are more than sufficient for its population and organisations can make a profit out of it by actually s elling the excess. The importance or so a global expansion is also the competitive utility the organisation is able to to reap. Firstly, the organisation may become more fficient due to the large market size. Economies of scales which was previously not attainable due to the limited population size can now be realised as the number of markets and customers increase. Underutilised machinery can also be put to gooder occasion as the number of orders increases. For another class, we actually visited the Manner production plant in Vienna and we noticed that many of their machines were not running at full capacity.By exporting overseas and increasing the demand for Manner products,this can actually help increase the production and make better use of these machines. Besides achieving economies of scale, the organisation may be able to reap the benefits of an dwell curve and this can further bring cost of productions down or making the organisation a more efficient one. Another advan tage of a foreign market entry is that it can actually increase the product life cycle when it is sold in less highly-developed countries.For a product with a short life cycle(especially technology gadgets),exporting it to other less developed countries can prolong its cycle as the take of sophistication and technology that is demanded might be lower. Consider the case of cellphones in a developed country like Japan. New determines of cellphones are constantly introduced and it will not be long before a model is phased out. Manufacturers of the older model can then find a new market in a less developed market (for example, India) that does that demand the newest technology but just require the cell phone for its canonic functionality.