The decision about how to enter an overseas market can have a significant influence on the results the company achieves. When a company has made a decision to enter a foreign market, there are a variety of market entry modes that have to be considered carefully.
There are four main mechanisms of new markets entry:
- Licensing or Franchising
- Joint Venture
- Direct Investment
- Direct Exporting
Franchising or Licensing
Franchising gives businesses an opportunity to grow very fast however requiring plenty of resources. This mode is rather costly as it requires a lot of training, frequent travel abroad, preparation of materials often in different languages etc. The entrepreneur who chooses this way of market entry is supposed to be a self-starter and have a high level of self-organization.
Licensing is less risky, but it allows for lesser amount of control. According to a licensing agreement the company grants the rights to use its product or service to another firm. This market entry strategy works best if the party that buys a license has a relatively large market share in the target market or markets.
Joint ventures are a particular form of partnership that results in setting up a third independently managed company. A third company is created when two companies agree to work together in a particular geographic or product market. There are five main goals joint ventures aim to achieve: market entry, risk and/or reward sharing, technology sharing and joint product development, and compliance with government regulations. Among the advantages of such partnership are account base increase, access to the best knowledge leading to company intellectual capital enhancement, awareness of local business environment as well as knowledge of local languages. This strategy gives an opportunity to combine valuable assets and the best features of two companies and to increase operational efficiency.
The trick here is finding the right partner. I will touch on the question of choosing right people to represent your business in more detail below.
Direct Investment involves direct ownership of facilities in the target country or countries. This can be achieved through either acquisition of an existing entity or the establishment of a new enterprise. This strategy is certainly the most costly and riskiest of all as it involves the transfer of resources including capital, technology and personnel. However, some companies can’t but choose this strategy and undertake these costs due to government regulations, transportation costs, and a possibility to access technology or specific skills.
Direct exporting means marketing and selling directly the products produced in one market into the chosen foreign markets. Exporting is one of the most traditional methods of entering new markets. It does not require any investment in foreign production facilities as goods are supposed to be distributed from the country of production to the target country. Exporting is generally based on coordination between four main players:
- Transport provider
- Local government
Many companies hire agents and/or distributors to represent their products in the chosen markets. As they become the face of your company agents and distributors have to be chosen carefully right the same way you would hire your key staff.
To meet this need for qualified sales personnel responsible for global sales we have elaborated our unique employee leasing solution. Its main goal is to assist export companies with new markets entry and make exporting to a number of chosen markets fast and easy.
How our employee leasing solution works
- You select Sales Representatives from the pool of the best local sales personnel in any country you wish to enter or expand your sales to
- They become your own sales personnel under your full control and supervision and are employed locally by us on your behalf
- We act as a Professional Employer for your remote personnel and provide full local business support as cars, offices, business expenses.
- You get a fully compliant, single point of contact employment solution for your remote personnel anywhere in the world
- They represent only your product category and attract buyers to your product or service thus serving as your remote hands in each desired country. You set sales targets and control your salesforce meeting them. They allocate all their time to selling your products and developing your business contrary to independent sales reps, who generally represent the whole range and balance between what the buyers would most want to buy.
With our solution, you enjoy all pluses of working with independent sales agents – unique expertise your in-house personnel may not have, access to their account base etc. – yet managing and controlling them as if they were your company employees. You also get a unique opportunity to start sales in any number of chosen countries.
Our company acts as an Employer of Record for your agents freeing you from having to open your own legal entity/ ies in each chosen country and letting you reap the benefits of exporting to our region with minimum costs and no employment risks.
Our employee leasing solution is for
- Small and medium businesses striving for international success
- Ambitious SMEs owners with burning desire to conquer the world with limited resources
- Companies which utilized their local market potential and are willing to boost their income by going global