Market Entry Strategy: 4 Types of Market Entry Strategies

A market entry strategy is how companies seek to expand their local market and find new audiences through franchising, international trade, and exporting. This business strategy typically arises when entrepreneurs or brands have secured a target demographic and domestic market and seek global expansion to bring products or intellectual property to fresh or overseas markets.

Before expanding into the global market, companies should explore the following marketing strategies:

1. 1. Exporting: Direct exporting gives companies more control over shipping and lets them more efficiently reach customers. Indirect exporting has a company go through a third-party seller, but it will also be one with established distribution lists.
2. 2. Greenfield investments: This bolder form of market entry strategy restarts the brand in a new market, building a subsidiary company to match the ethos and needs of the region. This is a more time-intensive process but rewarding in the long run.
3. 3. Licensing: A licensing agreement will allow the original company to license its product or intellectual property to another partner to handle the manufacturing and logistics of selling the goods in a foreign market. This streamlines processes, but originators lose some control over quality and marketing plans.
4. 4. Merging: Mergers or acquisitions involve absorbing another rival company in a similar market to expand—and sometimes double—your business.

Venturing into the international market can unlock a brand’s potential. Consider how expanding your business model to foreign countries can offer a competitive advantage:

1. 1. Clear direction: Market entry strategies require market research about exporting guidelines, foreign tariffs, and more. This research process involves legal counsel and international distributors. In the months and years before expanding, laying out the groundwork can help companies identify a clear direction and achieve success.
2. 2. Creative growth: Working with local partners in different markets means establishing the business overseas, sharing ideas, and growing together. New talent can come on board once you are in the global market, and these new employees will bring their strengths to the company to help it prosper.
3. 3. Larger profits: Entering a foreign market can be challenging but highly lucrative. The more you grow in international business, the easier it is to continue growing—it becomes a snowball effect.
4. 4. Smaller competition: Once new products gain steam, other foreign companies will try to replicate them. Quick and direct exporting can get your product into the global market, giving you complete control and increasing your piece of the market share.

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