entry into market
TRANSCRIPT
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Entry into Market
Amay Kothari
Growth Strategies
There are a number of strategies forgrow e.
Intensive growth strategy
Integrative growth strategy
Diversification growth strategy
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Intensive growth strategy
Intensive growth strategies aim at
products.
There are three important intensivegrowth strategies.
Market Penetration StrateMarket Development Strategy
Product Development Strategy
Market Penetration Strategy
It strives to increase the sale of the
markets.
There are the following three majorstrategies to achieve this.Increase sales to the current customers.
u customers rom t e compet torsproduct.
Convert non users into users
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Intensive growth strategy
Intensive growth strategies aim at achieving.
There are three important intensive growthstrategies.
Market Penetration Strategy
Market Develo ment StrateProduct Development Strategy
Intensive growth strategy
It involves expansion the market for apro uc .
By adding new market segments
By entering new market segments
By entering new geographical markets.
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Intensive growth strategy
Intensive growth strategies aim atac ev ng ur er grow or ex s ngproducts.
There are three important intensivegrowth strategies.
Market Development Strategy
Product Development Strategy
Product Development Strategies
A company may be able to increases curren us ness y pro uc
improvement or introducing products
with new features.E.g. Nokia, Vaio, Colgate, Lux, Pepsi
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Growth Strategies
There are a number of strategies forgrow e.
Intensive growth strategy
Integrative growth strategyDiversification growth strategy
Integrative growth Strategies
Horizontal Integration
business in the same industry.
Vertical Integration
Integration of different levels/ stages ofbusiness in the same industry
Forward Integration
industry
Backward IntegrationBackward integration involves starting the precedingstage of the current business.
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Growth Strategies
There are a number of strategies forgrow e.
Intensive growth strategy
Integrative growth strategy
Diversification growth strategy
Diversification
It means adding new lines of business.
Reasons for DiversificationSaturation or decline of the current business
Additional opportunities
Better opportunitiesRisk minimisation
Better utilisation of resources and strength
Competitive strategy
Need related diversification
Consolidation
Inspiration
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Methods for Entry in Marketing
Different Modes of entry in internationalBusiness.
ExportsInternational licensingFranchisingContract manufacturing
Contract marketingManagement contracts.
Joint ventureForeign direct investmentMergers and acquisitionsTake overTurnkey projects
Methods for Entry in Marketing
ExportsIt means physical movements of goods and service from
port by following the rules of both the country of originand the country of destination.
Depending upon the involvement of exporter , it could be
classified as a direct exportand indirect export.In Direct exports goods and services is in their ownname. All proceeds are directly remitted from the buyer tosuch exporters.
Indirect exporter supplies to direct exporter wherein theindirect exporter has to depend on direct exporter orders.
Lack of expertise, lack of international contracts and lackof manpower make them to depend upon directexporters.
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Methods for Entry in Marketing
Exports contd.De endin u on the size of the business,exporters are classified into
Small exporters,Export housesTrading housesStar trading houses andSuper star trading House.
Exim policy of India provides incentives and
ac es o e ca egory o expor ouse anabove.Depending upon the products, the exporterscould be classified as
Single product exporterMulti product exporter
Methods for Entry in Marketing
International licensing.
It is an agreement between the licensorand licensee for over a period of time for
the use of brand name, marketing knowhow, copyright, work methods, and
trademark by passing license fee.
e censor s av ng m n muminvolvement in day to day functions.
The return is also comparatively low.
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Methods for Entry in Marketing
Franchising.
franchiser exercises more control over the
franchisee.
They also supply a main part of the product like
Trade marks
Operating system
Product brand reputations.Advertising
Training of the employees
Quality assurance
Methods for Entry in Marketing
Contact Manufacturing.
Many of the companies outsource theirproducts and concentrate mainly on
marketing operations.Contact manufacturing is a strategy ofidentifying a manufacturing unit to
pro uce ems a a compe ve pro ucein any part of the world.
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Methods for Entry in Marketing
Contact marketingcompan es, w c ave s reng o
production, need not have equalmarketing strength but they arecomfortable to deal with marketingoutlets around the world.
Such manufacturing unit, entering in
marketing agreement do concentratemore on backward part of the coremarketing systems, production at a lowcost.
Methods for Entry in Marketing
Management Contracts.ompan es w ow eve ec no ogy
and managerial expertise may seek theassistance of foreign companies.
A management contract is an agreementbetween two companies whereby onecompany provides managerial andtechnical assistance in which a propermonetary compensation is given, eitheras a flat lump sum fee or percentageover sales or share in the profit.
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Methods for Entry in MarketingJoint Venture.
It is like a marriage blinding between two venture partners toset up a project either in the home country or host country or
r coun ry w a comm men o o n r s a ng an o nprofit sharing.
Many joint ventures has miserable failures in the past.
In the initial stages every venture promise excellentopportunities to both the venture partners.
When operation starts, certain functional level grievancesand issues become inevitable.
,
the aspects of management, investment and regulations ofthe countries where they operate.
The business unit should have a crystal clear guidelines andoperation manuals wherein the role of every one should bewell defined.
Methods for Entry in Marketing
Foreign direct InvestmentFlow of fund from one destination to anotherdestination is called investment.
Companies, which are constantly involved ininternational business, invest their money specially in
manufacturing and marketing bases throughownership and control.
The most attractive part of operation is directinvestment, which contributes to optimisation ofresources n e os coun ry, genera ng emp oymenopportunities and enhancing their standard of living.
Contribution through investment in the capital starvingeconomies and exposing the host countries toadvance technology and quality products.
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Methods for Entry in Marketing
Foreign direct Investment Contd.
e mos sa van age are ac oclarity of repatriation of profit,imposition of restrictions by hostcountries and elimination of small andmedium industries through financialmuscle by the investor.
Generally, the foreign investment istaking place in all the developedcountries only in the green fields.
It take place in specific sector.
Methods for Entry in Marketing
Merger and Acquisitions
company rom ome coun ry se ec s
foreign company and merges itself with a
foreign company and acquires its control of
ownership.
This mode of entering gives an outstandingcompetitive edge over others.
Such companies are comfortable to
strengthen their international manufacturingfacilities and marketing network.
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Methods for Entry in Marketing
Take Over
a e over s a s ra egy o a company o
identify a healthy unit and bring under the
management of another healthy unit in orderto reach the leadership and guaranteed
success.
Since many contestants focus on well
known company for take over, thecompetition becomes inevitable.
Out of those contestants only one will win and
the winner has to withstand hostiles.
Methods for Entry in Marketing
Take Over Contd.
take - over and the winner is called take over tycoon.
The take over is also in different levels likeCompany take over
Business take over
Product take over
Brand take over
Eg. Uniliver take over of Brook Bond andLipton enhanced its position as the leader intea industry in India.
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Methods for Entry in Marketing
Turnkey projects
urn ey pro ec s a con rac un er w c a
company would be fully involved from the
concept to completion.
Generally, supply of manpower, capital,
erection, installation, commissioning and trailoperation if a project would be the total deal.
For this, either the turnkey project contractorsget fixed price or cost plus profit are collected
over a long period of time.