Establishing Markets In Foreign Countries: Factors To Consider

Analyzing the Overseas Market

Operating business in foreign countries is not an easy work. When a business trade grows up to foreign countries, then there must be factors to consider before establishing new markets (Alfirevic, Peronja, Plazibat, 2013 p.78). Establishing these oversea markets means that the firm will be required to put more efforts so as to outdo the available competitors in market. Unless the firm finds strategic measures to curb competition in the market then it will be difficult for the firm to survive. In order the firm to establish effective positions in foreign countries it needs to consider basics needed in establishing markets in overseas countries. These basics includes;

Being sensitive to markets and the whole cultural norms.

The firm should not judge other countries. Also the norms and the values of the overseas should be well analysed by investing firm (Damjanovic & Behrendt,2014 p.67).This means that legislation from one nation to the other is different and therefore the firm ought to respect and adhere to the rules and regulations. The firm can consult other business about the values existing in the interested country.

Adhering to the tax liabilities.

Investing firm should be aware with all roads leading to tax .Every country has its base rate on the tax that is charged to the investors. Investing firm ought to consider these strategies and then decide a solution that will compare the incomes with the deductions (Dorn, Hanson, Pisano, Shu, 2016 p.87).The issue of risk in business also should be considered before establishing a firm in foreign countries.

Plotting out the sales strategies of the firm.

This is achieved through partnering, through franchising and having adequate employees on the ground before embarking into the business. The firm should be aware on the effects of contractors in business. Employee’s rights and protection measures need to be included and followed also.

Deciding on firm’s vision and mission.

This answers questions such as where to and how to handle market. Does the firm need use of sales people ,does it require managers (Garcia, 2012 p.80).These are questions to be answered through the use of goals and objectives as outlined in the marketing plan. Also rules to be employed either the firm will be selling directly to the customers or will it be delivering products to consumers at their comfortable zones. 

Understanding laws and regulations in foreign countries.

When a firm enters foreign countries it is supposed to familiarise itself with the rules and regulations of that country. This means that every country has its own rules different from the other countries (Geppert, 2018 p.54).Fillings and submission is different for example, operating a business in European countries demands the investor to have a certificate for running a certain shop.

Understanding Tax and Risk Implications

After  consideration of these factors ,then the company analysis new mechanism to deal with the increased global competition pressure .The need to come up with strategies and concepts which will assist in reducing or overcoming the competition level internationally .Competition starts from the  other firms operating in the same line with the investing firm. Most of the competition strategies focus to use goals and objectives that are contained in marketing plan document.

In order for the firm to compete effectively the competitive strategies, the steps for expanding business globally and application of competitive advantage should be used.

Generally a competitive advantage in business occurs when a firm in foreign countries develops or acquires actions that helps it to outperform the existing competitors in the market  (Hodgekiss,2014 p.87).The competitive theories revolves around the management zone in a firm. Firms in oversea countries are supposed to utilise these competitive advantage theories so as to ensure that competition is not a big challenge. These competitive theories are based on Market Based View known as (MBV) and the Resource Based View (RBV).The competition advantage theories are discussed below;

(a).The market-based view theory in competition.

This is the strategic theory that defines that both external and internal market orientation are the initial or primary determinants for the effective performance of a business. This means that the firm has unique virtues that are different from the one in their rivals. This is to say that the theory describes on how the firm is producing different products from their competitors in the market (Hodgekiss,2014 p.187).The firms achievements and performance are always determined by the organizational objectives and the competition dynamics which the firm  operates in the market. Different researchers have argued that   performance of a business depends on the external environment in market. In order for the company to outperform the competition then on this theory it means that strategies have to be formulated which will target evolution of all assessments and the effective competitive advantage over the external environment. This analyses forces such as threats of substitutes in market, the bargaining power of the suppliers and rivalry in market. 

(b).The resource –based view theory in competition.

This considers the firms internal capability to outperform competition in market. It emphasizes on the resources that a firm has to compete in market (Indris & Primiana, 2015 p.76). Firm’s resources are categorised on physical resources, monetary resources and the human resource. Researchers argues that not all resources can assist a firm to outdo competitors in the market. This is to say that only those valuable resources are able to assist the company to succeed in competition. For example, having irresponsible workers in the firm suggests that more delays and failures will be experienced in the firm. This helps competitors to attract more customers thus subjecting the investing firm to incur huge losses due to lack of satisfaction to the customers. In most cases, only those intangible resources which tend to be of importance in curbing competition in market. It is suggested that resource based view concentrate more on the internal resources when it comes to outperforming competitors in the market (Indris & Primiana, 2015 p.234).

Partnering and Protecting Employees

(c).Determining the intensity of competition in the market.

The investing firm in foreign countries is interested on how much profit each market segment will bring to the firm. This is to suggest that appropriate decision making on whether to invest in the market or not are formulated. The long term profitability from each segment in the market is determined by several factors. The firm applies the Michaels porters – a model in competition that helps a marketer to outperform the competition (Konrath,Chopik,Hsing, O’Brien, 2014 p.75).The model is based on the 5 principles as discussed below;

Threat of the intense segment rivalry in market. It is a situation that will help the firm to obtain new opportunities in market. The concept describes that each company wants to outdo the other and therefore emerge as the dominant player in marketing field .The Company at this stage will experience the price wars that will affect the total cost of doing business.

Threat of new entries. The firm should be aware of the other companies who are joining market with the new preferences and taste (Lekolool, 2010 p.76) .New Company’s targets specific segment in market and they come with new models and offers that will cause the existing companies in market to lose their customers.

Threat from the substitute products (Leon, 2018 p.45).Michael argues that firms can trade product with the same features in the market. These products targets the same mix and most cases they have the same price. The firm to outdo the competition on this level should come up with new modification for the products. It can seize to produce these products, come up with new prices or modify these products to target a certain segment in the market.

Threat of buyers increasing the bargaining power in business  (Leon, 2018 p.75).This describes buyers of products acting as either jointly or as individuals .The firm ought to check this .The bargaining power is based on the prices, high quality product supply and favourable terms for the trade .

Threat of suppliers increasing the bargaining power (Leon, 2018 p.105).Majorly this originates from the suppliers of inputs in the firm for the products .Suppliers can lower the quality of the inputs, raising the prices and demanding long term contracts that are highly bidding. 

(d).Developing an online image and being unique.

The firm should have an image that will assist in outperforming the competitors in market. This can be an online image that will focus on identifying the firm in the market. Designing an effective online image the firm should ensure that;

Targeting Market Segments

There is adequate money and time that will assist in creating a website image .This can either be hiring workers to design (Nettleton,2014 p.78).This will help to distinguish company in market. Customers will easily access products since there is a unique picture describing the firm.

Designing an effective market plan that will direct company to follow the strategies and objectives in market. This will enhance uniqueness in marketing and therefore a specific segment is targeted in market.

The company also can be unique on how it markets its products in the market. The firm ought to think differently from the competitors (Nettleton, 2014 p.178).It can either offer cheaper products to their customers, offers discounts and other promotions services that will target mass consumers.

(e) .Understanding the characteristics of the competitors in the market.

For the firm to curb competition in market then it needs to understand the behaviour of each competitor .The firm should come up with appropriate information on areas analysing competitors in market. The information may include;

(1).Who are the competitors ,the list of their actual and potential levels of competition (Patiño,2015 p.32).The firm generates a list based on the degree of the products substitute that recognises four levels of competition .These levels are based on ;

• Brand competition which includes competitors dealing with the same products.
• Industry competitors in market that is those companies that make and market the products.
• Form competitors .These are the companies that offers services that are enjoyed by the customers.
• Generic competition which is the list anything that competes for the budgetary attention of the customers.

(2).What are the strategies used by the competitors?

The firm in order to outdo its competitors then it must understand the strategies used by the rivalry and also the groups that competitors are targeting in market (Pesch & Bhattacharyya, 2017 p.54).The firm then decides to come up with its own strategies different from the competitors.

(3).What are the objectives of the competitors in market?

This regards what the competitors wants to achieve in market. There are two possibilities in market that describes this. First  is the rivalry seeks only one objective of maximizing profits in market environment (Pesch & Bhattacharyya,2017 p.84).The second is that the rivalry seeks to achieve both the objectives and also addition to maximizing the profits so as to include aspect of  quality products, increasing leadership in innovation ,ensuring there is marketing share and the appropriate leadership in technology. 

(4).What are the strengths and weakness of competitors.

Here the investing firm checks on whether the rivalry has what it takes to execute its strategies that is the resources available (Sibanda, 2014 p.87).The investing obtains data about the rivalry .A survey on use of suppliers, the customers serving distributors and other competitors in market is formulated .The firm need to come up with questions which should be included in the question are such as; name the company where customer prefers to buy and reason for buying from it. Also the firm can rely on secondary data such as government reports regarding the competitors ,competitor budget ,income statements from the competitors and other related records describing the competitors (Sibanda,  2015 p.100).

Applying Competitive Advantage Theories

Conclusion

From the analysis above firm ought to consider the nature of internal and external environment that face market (Wahyuni & Titus, 2013 p.67).Firm should take time analyse competition in the market come up with strategies and principles that will focus on outperforming competition in market. The firm need to consider all the issue analysis that can raise when operating. Competition strategies such coming up with effective marketing plan helps in increasing production within the company. Understanding the level of competition and the characteristics of the competitors in the market forms a module that will assist in accessing opportunities in market different from what competitors are targeting. Understanding competition analysis is the key for enhancing business development. Only competition deters the developments of businesses (Wahyuni & Titus, 2013 p.157).When marketers understands the weakness of the competitor in market then it is easy to survive while enjoying profits from the large number of consumers the firm is targeting in marketplace. 

References

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