Question

Read the article regarding “How to Enter a Foreign Market” and then answer the following questions based on the Exavier Candy Company scenario.

• If Exavier Candy Company were to go global what would they need to find out concerning marketing of their products? Be specific.

• What would be their best first international market (country or region) possibility and why?

• What management/financial considerations would need to be considered?

Answer 1

The first market, which company should focus is India. It is one of the most populated countries in the world. The population of the India is more than 17% of the world population. Country is politically stable. It has very good relations with the USA. The 65% of the India is below 35%. And we all know that young people like to eat chocolate. The competition is also much lower as compared to European countries. The society of the India is open as a result people accept the products of foreign countries without any hesitation. Company does not need to make changes in the products. Due to globalization, the entry barriers have been removed by the government of India as result it is very easy for the Candy Company to enter the Indian market. The labor cost in India is much lower than USA. So company should open its own manufacturing unit in India. The labor laws are also very flexible. Additions to this, there are some states in India, which provide special rebates in tax.

Even, some states provide land at very concessional prices to the foreign companies. There is no doubt that company can make huge profits in coming years in India. The disposable income of the country is increasing every year. The GDP of the country is growing with almost 6-8%, which is much higher than the most developed nation. The currency of India has been depreciated in last few years. This will help the company to make higher profits. The best way to enter the India is through joint ventures.

There are various companies in India. Joint venture with a local company will help the Exavier Candy to know the local conditions. This will reduce the risk for the company. Local companies are well aware of the micro ecomic conditions of the host country. A joint venture enables a firm to benefit from a local partner's knowledge of the host country's competitive conditions, culture, language, political systems and business systems and also to share costs. Company should take local people in their management. These people can guide the company in much better manner as compared to foreign expects.