Question

Please explain, in as simple terms and as detailed as possible, what essential issues a company must take on when selecting an entry mode for a foreign, new market, and what ways they might decide to take to take them on.

Answer 1

While entering into a new foreign market the company should take care of the variety of cultures, barriers of legalities and regulations, considerations of foreign government, etc. The companies enter into the foreign market for acquiring advantages for the company. It increases the ability of the company for increasing the demand for its products and decrease the economic volatility from the domestic market and develop new customers. The important points of which the company has to take care are as follows:

• Culture: the company has to deal with different cultures and work accordingly. The products which it makes should not harm someone's sentiments.

• Legal and regulation barriers: the company has to deal with the documentation and legality process while entering into the foreign market. All the risk involved should be strategize and planned by the company in advance.

• Foreign government consideration: the company has to take care of various resources, materials, transportation, communication, currency exchange rates, capital and abide by the laws of foreign government.