There are numerous factors to consider when choosing your best alternative for entering a new market. So, how to nail it?
The basic market entry models
To get started, consider the trade-off between time / resource requirement on one hand and your preferred control / risk level on the other hand.
The resource / control balance, however, is not sufficient to decide. To name a few: Firm size, level of international experience beforehand, product complexity, product differentiation advantage, risk aversion, control requirement, tacit nature of know-how, opportunistic behaviour, transaction costs, sociocultural distance, country risk, demand uncertainty, market size and growth, trade barriers, intensity of competition, number of export intermediaries, level of price control, level of end-user interaction, development of know-how, cash requirement, speed / time requirement, entry / exit barriers…
Again, to boil it all down. Add to your resource / control balance considerations the level of complexity of your product or service and determine the corresponding balance with regards to the distribution mode complexity. If the product and distribution complexity don’t match, you will either end up with insufficient value for the chosen distribution channel or insufficient channel support to your marketing.
Takeaways
Understand the trade-off between time / resource requirement on one hand and your preferred control / risk level on the other hand.
Make you level of product complexity balance with the distribution mode complexity.
Understand the big picture and how your decision fits with your strategy.
