2.1 Modes of entry
Modes of entry is the strategic choose of how a company wants to enter into a foreign market in such a way that it will have a positive impact for the company and the area you are trying to enter. (Foreign Market, 2016) There are four major sections that must be considered when entering into a new market the first is Exporting, then Licensing, Joint Venture, and last Direct Investment. (Foreign Market, 2016)
Exporting by many leading experts is considering the easiest way of entering a new market. It’s the easiest because the company is exporting the product directly into the market so all they have to do is focus on sells. Exporting is the most well established method of entering into the foreign markets, because there is …show more content…
Such licensing’s usually in the form of things like trademarks, patents, and intellectual properties. The fees that the company pays for is the exchange for those rights; because little investment is required there is the potential for the company to see large returns on investment (ROI). The only down side is the there is a chance that “potential returns form the manufacturing and marketing activities may be lost” (Foreign Market, 2016)
Joint venture has five common goals; market entry, sharing, technology sharing, risk/reward, and conforming to government regulations. Joint ventures share such benefits such as political connection and introduction to distribution channels. Potential problems for joint ventures include things such as mistrust over proprietary knowledge, lack of parent firm,, cultural clashes that may lead to termination of the relationship. (Foreign Market, …show more content…
We believe the best mode of entry for our soap product business in Nigeria would be to start out by creating a joint venture with a soap company that has already gained a presence and market share in that current market. After creating a strong relationship with our joint venture company, we will then acquire them and focus on making our company stronger as a whole.
While we do recognize that joint ventures can be risky and often unreliable, we have also learned that the Nigerian people are very trustworthy and care about the team as a whole (collectivism). If we were to join with Kelson Nigeria Limited, we guarantee that, though it will not be easy, we will be able to work together if we focus on each other’s interests and not just our own. We cannot be selfish in this endeavor, otherwise the joint venture will not work. A joint venture would be the easiest way to get our foot in the door to the Nigerian soap market because Kelson Nigeria Unlimited will have an understanding of what the Nigerian consumer wants and needs. They will understand better the laws of the land and how things are supposed to run in Nigeria, while we have the strength of strategy and business as well as the capital necessary to fund this
Modes of entry is the strategic choose of how a company wants to enter into a foreign market in such a way that it will have a positive impact for the company and the area you are trying to enter. (Foreign Market, 2016) There are four major sections that must be considered when entering into a new market the first is Exporting, then Licensing, Joint Venture, and last Direct Investment. (Foreign Market, 2016)
Exporting by many leading experts is considering the easiest way of entering a new market. It’s the easiest because the company is exporting the product directly into the market so all they have to do is focus on sells. Exporting is the most well established method of entering into the foreign markets, because there is …show more content…
Such licensing’s usually in the form of things like trademarks, patents, and intellectual properties. The fees that the company pays for is the exchange for those rights; because little investment is required there is the potential for the company to see large returns on investment (ROI). The only down side is the there is a chance that “potential returns form the manufacturing and marketing activities may be lost” (Foreign Market, 2016)
Joint venture has five common goals; market entry, sharing, technology sharing, risk/reward, and conforming to government regulations. Joint ventures share such benefits such as political connection and introduction to distribution channels. Potential problems for joint ventures include things such as mistrust over proprietary knowledge, lack of parent firm,, cultural clashes that may lead to termination of the relationship. (Foreign Market, …show more content…
We believe the best mode of entry for our soap product business in Nigeria would be to start out by creating a joint venture with a soap company that has already gained a presence and market share in that current market. After creating a strong relationship with our joint venture company, we will then acquire them and focus on making our company stronger as a whole.
While we do recognize that joint ventures can be risky and often unreliable, we have also learned that the Nigerian people are very trustworthy and care about the team as a whole (collectivism). If we were to join with Kelson Nigeria Limited, we guarantee that, though it will not be easy, we will be able to work together if we focus on each other’s interests and not just our own. We cannot be selfish in this endeavor, otherwise the joint venture will not work. A joint venture would be the easiest way to get our foot in the door to the Nigerian soap market because Kelson Nigeria Unlimited will have an understanding of what the Nigerian consumer wants and needs. They will understand better the laws of the land and how things are supposed to run in Nigeria, while we have the strength of strategy and business as well as the capital necessary to fund this