Mode of Entry to Us
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Mode of Entry There are six mechanisms in expansion into foreign markets that can be achieved via exporting, turnkey contracts, licensing, franchising, joint ventures and wholly owned subsidiaries. So, our company is deciding to choose mode of entry of exporting. Exporting is the act of producing goods or services in one country and selling or trading them to another country. So, we are choosing to export our product to United Sates of New York. In exporting, we are choosing method of indirect exporting. This method poses the least amount of risk and expense because it is relatively easy to start up and has a moderate up-front capital investment. Besides, indirect agents act as intermediaries between our company and buyer and facilitate the flow of goods. So, we are selecting S.O.S Maintenance store at Level 3 in The Shops at Atlas Park for sales of our new product. Furthermore, exporting is just one mechanism for our company use to establish our presence in economy of United States.
The most important reason our company begins exporting is to maximize profits by exploiting opportunities in foreign markets of United States. By doing so, we can reduce new product development costs and take advantage of learned efficiencies related to the product dealing with production, distribution, and marketing. When markets for our product in the United States begin to mature and become saturated, we can continue to receive continuous sales and profit gains through this exporting. Moreover, markets in other countries are often less saturated and less competitive, so it’s allowing our company to gain faster sales growth and higher profit margins. Market risk diversification is also another reason that we are choosing of exporting. Our company also can usually decrease an exposure to cyclical economic down-swings or regional problems by increasing the geographic opportunities. Lastly, exporting also decreases risks associated with seasonality of some products. So, we are choosing the right and suitable mode that is exporting to enter in foreign market.