TA Ngoc-Ngan
Presentation 11/03/2010
A8E83

ENTERING A FOREIGN MARKET

1. Why does company decide to enter a foreign market - Competition - Resources seeking: raw material, labour, etc.

2. Preparation - Financial position - PLEST analysis (Political, Legal, Economic, Socio-cutural and Technological factors)

3. How could company enter a foreign market?

1. Exporting 2. Joint Venture 3. Direct Investment

4. The case of EuroDisney

1. Why does company decide to enter a foreign market

As you know foreign markets can be very attractive to a business looking for new customers, especially when its home market is becoming saturated. But also when it’s looking for resources such as raw material or for lower cost labour.

2. Preparation

But such an expansion, however, needs to be carefully researched and planned to ensure that the timing is right. So a good preparation is required. First of all, it is essential to proceed from a strong financial position. Also, you will need to have the full commitment of the members of your management team, which will depend on their in-depth knowledge of the time, effort, and resources that the company needs.
Then you can develop the plans, capacity, and systems for your business to launch its program to enter a foreign market confidently.
In add, remember that analysis and understanding of the market you want to enter is vital. PLEST analysis are widely recommended to provide you with insights and to help you determine whether or not this is the right time to enter a foreign market. PLEST stands for Political, Legal, Economic, Socio-cultural, and Technological factors.

P as Political factors : How stable is the political environment? Is the government likely to change tax regulations soon? Will your product be protected by copyright? L as Legal factors For instance, Do existing or proposed laws give domestic companies significant advantages over foreign