• Market Concentration: Many companies direct single product to one or a few markets. A general food companies sells chewing gum in France, ice-cream in Brazil, and pasta in Italy. None of these businesses is large enough to justify sales on global basis. Therefore market concentration is a logical strategy if a product can be sold profitably in a limited market. Another motive for pursuing a strategy of market concentration in the belief that the product appeals to fairly homogeneous growth in a few countries.
• Market Extension: The strategy of market extension is suitable for countries with unique product lines that can appeal to the needs of suitable customers in different countries. A company should have a competitive advantage that permits to sell a narrow product line on …show more content…
Black & Decker is a good example of a company that adapts the product invention approach to international market expansion. To manage its global product development process this company aims to bring out new products to satisfy the common needs and opportunities around the world.
Challenges to Enter International Market
While choosing new markets, MNC’s need to consider several factors:
• Micro Factors:
1. Political regulatory environment: o Tariff barriers- Taxes on imports paid to customs officials o Non- tariff barriers
2. Financial/ economic environment: o Exchange rates- Price of currency in one relation to another o Fiscal policies o Monetary policies
3. Socio cultural issues and technological infrastructure: o Understanding the local culture is the most profitable way of marketing product and services.
• Macro Factors:
1. Competitive considerations
2. Local Infrastructure such as transportation and logistics
• Market Extension: The strategy of market extension is suitable for countries with unique product lines that can appeal to the needs of suitable customers in different countries. A company should have a competitive advantage that permits to sell a narrow product line on …show more content…
Black & Decker is a good example of a company that adapts the product invention approach to international market expansion. To manage its global product development process this company aims to bring out new products to satisfy the common needs and opportunities around the world.
Challenges to Enter International Market
While choosing new markets, MNC’s need to consider several factors:
• Micro Factors:
1. Political regulatory environment: o Tariff barriers- Taxes on imports paid to customs officials o Non- tariff barriers
2. Financial/ economic environment: o Exchange rates- Price of currency in one relation to another o Fiscal policies o Monetary policies
3. Socio cultural issues and technological infrastructure: o Understanding the local culture is the most profitable way of marketing product and services.
• Macro Factors:
1. Competitive considerations
2. Local Infrastructure such as transportation and logistics