Exporting of goods is one way of gaining entry into a market. Exporting entails manufacturing of goods in one country and finding their market overseas. It is less risky and much cheaper compared with when the company is overseas. It also gives an opportunity to study markets abroad so as to increase investments that accrue to business growth. The Toyota company, for example, is based in Japan, but sales its vehicles throughout the world (Cavusgil, 2009).
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Licensing is a method of operation in which a company in a country allows another foreign company to use their trademarks, manufacturing skills, and technical know-how in the production of goods as stated in the license. In return, the company receives payment (Cavusgil, 2009). For example, the Coca-Cola Company has allowed the United Bottlers of Zimbabwe to make Coke and sell in Zimbabwe. This method reduces production cost. The only challenge is the cost involved when signing the agreement.
Another way of market entry is by producing goods abroad. This production is the ultimate opportunity to capture the overseas market at a low cost due to no costs accrued in exporting goods to the market. The host country only benefits of tax advantages and employment opportunities as a way of attracting investors. The Apple Company is a US based company that has set its electronics plant in China.
Franchising is a form of licensing, in which a successful company collects all their ideas that led their company to grow in the home country. These ideas are shared with investors from other markets. The successful company provides technical skill training and also assist in selling the products (Cavusgil, 2009). McDonalds have used this method in expanding markets overseas.
Running joint ventures is the running of an enterprise that is owned by two or more investors. They have equal rights and privileges to execute the business. They share the risk when entering into the market. They also share profits as per the signed agreement.
Market potential changes are important since the whole idea is to run the business to generate high profits at a minimum cost. The business owner must ensure that profits are high and also customers are satisfied. It entails the adjustment of goods and services to suit what the customer needs. The number of clients will increase when they get satisfaction thus increasing business proceeds.
Doing potential market adjustments make business cost minimal. Advertising should be done in zones with potential customers. It is, therefore, important to identify areas with potential customers and define target customers.
It could be wise to provide goods and services to other businesses than to individual clients. Businesses are most likely to buy in bulk at a given time making the business person get high returns in a short period. A hotel can buy 500 bars of soap compared to an individual, who can buy just a bar of soap (Cavusgil, 2009).
An adjustment is necessary when one wants to identify a market niche. It distinguishes the business from other competitors. For small businesses, it is expensive to cater for broader audiences. It is cheaper to operate in a place with less competition from other firms. The result is higher returns as demand is high in such places.
Market prices change as a result of promotions, fluctuation in the distribution, competition, and intensive advertising. It becomes necessary to adjust market shares to avoid losses as well as maintain the customer. The adjustment also forecasts to estimate the criteria that integrates over regions of distribution of parameters that are in line with market shares and constraints (Gunasekaran & Sandhu, 2010). Through observation on average consumption of particular goods and services in a given market size, it becomes very necessary to provide customers products that they use most.
The choice of small business is a small cafeteria. To evaluate the non-quantitative factors, one could evaluate the business goals and objectives. He could also generate a list of questions about the business. Does the business generate enough income? What can I do for the community? Can this action raise my social status? These questions will help me determine if my business is profitable (Gunasekaran & Sandhu, 2010).
Assess the working conditions of the business and use the findings to generate some questions. He could ask; what type of work does the business entail? How best can the work be done? Who will do the job efficiently? Does it require a lot of energy? Answering these questions will enable him to know what is efficient and also know the progress of the business venture.
With experience, one ought to have the know-how in running the business. Lack of knowledge is the cause of failure of many companies. I ought to think if I have the required skills to maximize profits. I could figure out if I have a personal contact with someone who has an idea of running a cafeteria. I could also evaluate the goals achieved as a measure of my experience.
Lifestyle is important in a business environment. Study the culture of people and evaluate my business if it can provide such lifestyles. In what season do individual lifestyles emerge? Are they consistent? Do they match with the culture of the community? Can the family be involved? These questions will enable me to plan comprehensively on running the business to maximize profits.
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Cavusgil, S. (2009). Conducting market research for international business. New York: Business Expert Press.
Gunasekaran, A., & Sandhu, M. (2010). Handbook on business information systems. Singapore: World Scientific.