How to enter foreign markets

Once the business has chosen the best markets for its products, the next decision concerns how to achieve penetration of the target markets.

The factors that need to be considered are:

• The competitive advantages of the products in the foreign markets and possible risks.
• The business’s financial dynamic.
• Limitations and obstacles that the business might encounter.
• The type of product or service to be exported.
• The particularities of each market.

In general, the methods for importing a product into a foreign market are:

1. direct exports,
2. exports via third parties,
3. entering into cooperation with domestic or foreign businesses.

Direct exports involve the business selling its products directly to the final customer. The main advantages of this method are that it ensures a greater profit margin due to the absence of intermediaries; it is possible to set lower prices; and there is direct contact with and knowledge of the final customers/consumers of the business’s products.

However, there are also disadvantages due the fact that the business must have excellent knowledge of the market, while it takes time to build awareness of the product and of the business.