How to enter an international market- problems and solutions.

1. Ken Barnes, DBA
Barnes Training and Consulting

2. Expansion and Growth Strategy
Cost Saving Strategy
Maintain a Strong Presence in a Geographical
Region to maintain market Share.
To Maintain Name Recognition
To Escape fiscal and over regulated Business
Environment.
On CSR grounds.

3. Location is very paramount to International
Business.
Locating markets which can help achieve
Strategic Goals
Locating Markets which will culturally accept
the products. Are the products culturally
acceptable?
Locating Markets which is conducive in terms
of cost- E.g. Availability of factors of product,
Market.

4. This problem relates to the MNEs’ decision to
be an early mover or a late mover.
Early Mover Disadvantages -Initial capital
outlay e.g. industrial infrastructure, increased
uncertainties relating to a virgin industry.
Untested industry rules and regulations.
Late Mover Disadvantages – Difficulty in
securing market share, Difficulty in niche
creation.

5. How to enter relates to the mode of entrance.
MNEs are confronted with entering directly
through direct investment or indirectly.
Should the MNE enter through Acquisition,
Merger, Collaboration or Franchise.

6. MNEs are confronted with which hirng
approach to adopt to hire senior management
for their foreign markets and their
subsidiaries.
Problems relating to adopting Ethnocentric
approach to hiring-hiring parent country
nationals.
Problems relating to Polycentric approach to
hiring-Hiring host country nationals
Problems relating to geocentric approach to
hiring-Hiring from everywhere.-(Peng, 2013)

7. Language barriers
Cultural barriers
Value barriers and differences
Perception barriers and differences.

8. Corporate Social Responsibility(CSR)
Challenges faced by MNEs relates to the
following:
Expectations from Host Countries
MNE’s budget and programmed CSR activities
Alignment of CSR Policies and program
emphasis and causes of the MNE and what
the host country actually needs.

9. The major problem under this category is
Discrimination in the following areas:
Which industry to enter
Which product to deal in
Taxes, Tariffs and Duties.
Technology
Access to information
Access to local capital

10. Most of the problems could be solved or
controlled by the following:
Organizational Learning
Diligence and good Country Risk Analysis
Building Alliances, Collaborations and
Networks with local authorities competitors
Hiring of local Experienced Consultants.
Assessment of Resources and Capabilities.

11. MNEs enter foreign markets for a lot of reasons.
Chief Among the reasons is Profitability.
There are however a lot of problems and challenges
inherent in entering the new market.
These problems bother on Staffing, culture, timing,
legal and regulatory factors and CSR programs.
It is important that MNEs find solutions to these
problem to ensure success.
The solutions include Organizational Learning ,
Diligence , good Country Risk Analysis , Building
Alliances, Collaborations and Networks with local
authorities competitors, Hiring of local Experienced
Consultants, Assessment of Resources and
Capabilities.