|Now assume you are the CEO of a small company like SpinCent. Also, believe that you are looking to expand your business internationally. Based on this scenario, please answer the following questions:|
A. How would you go about selecting which countries to target for your expansion?
B. What sources of data would you recommend for this analysis?
C. Which mode of entry would you recommend for your company and why?
Unlike many years ago, businesses are conducted through a globalized environment today, characterized by fewer barriers, greater competition, and more expansion opportunities. Having created a considerable market share for the last few years, SpinCent could enjoy massive benefits from expansion. But, it needs an effective strategy to guarantee benefits, such as a competitive advantage in the new market. This paper aims to describe the factors that SpinChet must consider in the expansion, the sources of data that can be crucial to the company’s going forward, and the best mode of entry.
Selecting the country for expansion can be a complex process and must be approached strategically and with sufficient data. As a result, SpinCent must begin by clearly assessing the purpose of the expansion. Goals and objectives must get understood by all stakeholders as this is a prerequisite of any international market entry strategy (Górecka and Szalucka, 34). After the rationale for the expansion decision is understood, the company must define the products it wants to market to the new markets. SpinCent offers premium products that can competitively earn a significant market share in a new market. It has to define the features that make such products distinctive in the foreign market. For instance, it would be necessary to determine the state of centrifuges in the new market. Does the healthcare system lack a specific type of technology? Finally, even before the entry stage, SpinCent must determine the timing. This process must involve a careful analysis of data on the new market and factors that may pose entry challenges. There are several data sources that the company can rely on in creating a perfect entry strategy.
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Relying on valid data to make a decision is preferred over assumptions and speculations. Several data sources could be the key in the entry strategy, such as information about the new market’s language proficiency. It is not feasible for SpinCent to start in markets where it has low chances of success. It should begin with countries that speak the same language to minimize the cost of hiring new employees or seeking local partners. Secondly, the company might need to consider the market’s economic strength. Gross Domestic Product, for instance, provides a great deal of information necessary to gauge a market’s welfare. Countries with a high GDP are likely to have high consumption rates (Dynan and Sheiner 4). Another crucial source of data is the federal Government services and publications. They provide companies with marketing assistance through promotional and information techniques (Christensen 54). Understanding the significance of each of these data sources can help SpinCent craft select the best entry mode.
The suitable mode of entry for SpinCent is exporting. With exporting, it doesn’t have to produce the products in the target market/country hence cutting the cost of investing in foreign production facilities. It is the simplest mode of entry, and considering the company size, it would be the most feasible one. However, the company will need to establish a distribution channel by partnering with local distributors of companies (indirect exporting). It would also be necessary to give thought to labeling, pricing, and packaging for the market and let potential customers know its products through integrated marketing communications. This mode of entry can offer SpinCent two significant benefits. Firstly, the firm will be able to improve its knowledge about markets and technology hence the ability to customize the products to the needs of different markets (Love and Ganotakis 2). Secondly, it will benefit from access to professional and technical expertise that may not be present in the host country. Exporting could give the company a competitive edge as it prepares for further potential expansion in the future.
The expansion can be the source of competitive advantage if approached strategically and implemented flawlessly. SpinChet could achieve this by a gradual process that focuses on the expansion purpose. Additionally, it has to identify the products it needs to deliver to the new markets, determining the best markets and the timing for the expansion. To obtain necessary data to support the strategy, it should consider sources such as Federal Government services and publications, the language proficiency of the country or new market, and the economic growth indicators. It should choose to export as the mode of entry to reduce the risk with distant or culturally different markets.
Christensen, Rod. “Sources of Information on International Marketing: A Checklist.” Reference Services Review, vol. 9, no. 3, 1981, pp. 53-59.
Dynan, K., and L. Sheiner. “GDP as a Measure of Economic Well-being.” 2019.
Górecka, D., and M. Szalucka. “Country market selection in international expansion using multicriteria decision aiding methods.” 2013. Accessed 17 Oct. 2021.
Love, James H., and Panagiotis Ganotakis. “Learning by exporting: Lessons from high-technology SMEs.” International Business Review, vol. 22, no. 1, 2013, pp. 1-17.