Foreign Market Entry and Diversification - Research Paper Example

The aim of diversifying the business is to increase the stock prices and reduce the risks, which may arise in the new market; thus achieving effective business competitive advantage. The strategy for business diversification will be expanding the operation of the company through adding new markets, new products and services of different types and adding production stages to the existing business. The catalyst for achieving these strategies is taking into consideration the mission and vision of the business; thus grasping the opportunities when presented in order to move toward profitable business.

The aim of this diversification strategy is to allow the business to enter business lines, which are dissimilar from the presented business operations. Some entrepreneurs believes that diversification is achievable through a natural advancement that is extending the new brands by offering customers a variety of products; thus meeting their demanding needs (Tielmann, 2010). However, an effective diversification strategy is capitalizing the core competence of the company and the strengths of flourishing brands to enable the business perform successfully into the new markets.

The synergies may be gained from the diversified activity through incorporating the corporate level strategic decisions together with the diversified activity. . Therefore, the company can achieve synergy from diversified activity through creating more value to diversified products. The corporate can also enter into the diversified areas where corporation key resources and capabilities can be shared and leveraged in order to improve organizational performance. The synergies can come from both horizontal and vertical relationships from varied business units.

The company can take into considerations the core competencies by leveraging competencies and shared activities in order to fuel the new business growth. Before the LLC Company enters into the foreign market, they should first analyze the environmental conditions of the foreign markets. They can employ effective models for analyzing the country’s attractiveness and the competitive strength of the business. Therefore, the foreign markets where the LLC Company can enter are the overseas markets such as the European markets.

The company will employ effective strategies for entering the oversea markets in order to enable them become competitive; hence increasing profitability. One of the effective strategies that the company will employ is indirect export strategy. The company can use this strategy for matching the requirements of the foreign buyer. It can also choose to deal with international business that takes into considerations the foreign policies and regulations. The second strategy is the direct export since analyzing the direct export activities will enable the company to take greater control of their activities.

It can involve in product sales and distribution in the international markets; thus employing this strategy will enable them to increase their sales. Lastly, it can employ foreign