Strategies to Enter a New Market

Every organization requires entry strategies to a market, and according to Jansson (2007), entry strategy is how companies are able to access new customers in a new market and how they are able to market their products and services in the same. Additionally, how markets are globalized rapidly through expansion of the company is referred to internalization strategy. Globtech is an organization that was started in 2011 in Saudi Arabia, and it provides software services. The company wants to enter into a new global market in Europe. Europe is a competitive market that requires a lot of planning and a strategy to enter this is because the competition is high and it is an established market. Modes of entry in a new market For every company, there are a number of entry modes they can choose from such as exporting through direct or indirect channels, foreign direct investments, mergers, licensing, and franchising among others.

However, any organization planning to enter a new market should see whether the intended market has the potential for growth or not. According to Grant, & Jordan, (2015), the strategic objectives are very important for a company that wants to expand. Every company needs to look deeper into the new market they are entering in to ready. To be able to expand its business boundaries, Globtech is preparing to enter into the market of Europe. According to Sternquist, & Goldsmith, (2018), globalization and some technological developments have provided opportunities to organizations trying to expand operations and most importantly those organizations that are working towards benefiting from emerging markets. Entering a new market and be able to enjoy the benefits involves a greater degree of risk because in a new market the company is very volatile in terms of economic and political instability.

So it is very necessary for a company to evaluate a strategy that they should adopt while trying to enter the new market. A number of studies have been conducted to identify entry strategies that are effective for the firms and at the same time, there are the researchers found out that there are different paths that an organization can use to enter a new market. Factors to consider when entering a new market Before entering any foreign market, it is advisable to formulate an entry mode strategy that will help the company penetrate into the market. The two colleagues agreed stated that market entry strategy is made up of entry mode and market plan which dictates the market segment that the company will be able to control as well as its loyalty to the project market.

Other factors have been indicated by other researchers including Sandberg, (2013) who added ownership and control aspects. The two factors could, however, be grouped under the entry mode factor. In the last decade, a lot of emphases has been put towards the maintaining of business relations through the application of strategic alliances, networks, and assessment of business performance under the entry mode factors. Entry strategies are linked to new and emerging businesses which exist in markets with less developed infrastructures that enhance business operations. Each of these entry strategies has their strengths and weaknesses, and therefore it is important that a company chooses the suitable one. According to a study conducted by Sternquist & Goldsmith (2018), a company should look into the ownership advantage of the business before deciding on the entry mode.