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This was due to the dominance of already established brands like Apple and Nokia. However, Samsung being the world’s largest tech company it was not long before it caught up with…
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i. Samsung Phones The entry of Samsung into the United s smartphone industry was, at first, seen as impossible. This was due to the dominance of already established brands like Apple and Nokia. However, Samsung being the world’s largest tech company it was not long before it caught up with Apple. During its entry into the US market, Samsung has launched several remarkable products such as the latest Galaxy S4 smartphone.
Other than using innovation in creating their products, Samsung has learnt from their competitors. In addition, they listen to the feedback their customers give them while using their products. This, to market observers, is an aggressive strategy that has led them to court over intellectual property with Apple.
Samsung pivots and launches its products quickly with each product offering different features. It studies the market needs and pushes products that are successful while killing the failures. It has differentiated itself from Apple by developing phones with larger screens, impressive features, listening to consumer demands and successful marketing.
ii. Nestle
Nestle is another example of a company that regards the USA as a foreign market. Being a global organization, Nestle adopts competitive strategies when entering into new markets. Most of its products are dairy-based and for this reason, it first undertakes direct investment in the dairy and other food businesses. In terms of sales, Nestle usually attempts to maintain low risk and low growth; this ensures that its growth is steady thereby maintaining the confidence of stakeholders.
In the USA, a developed market, Nestle gains economies of scale through the aforementioned strategy; foreign direct investment. This investment is directed into big companies handling both dairy and food-related products. Another strategy that is effective is entering into partnerships with large companies. The most notable partnership is the one with Coca-Cola, which enable Nestle to benefit from the worldwide bottling system of Coca-Cola.
2. A
Licensing despite being a solid foreign market entry strategy it has its own risks and downsides. Licensing refers to an agreement that involves the selling of rights to the licensee to reproduce intellectual property of the licensor. First, if the licensee firm is competitive and rapidly growing it may develop into a future competitor to the licensor firm. Another risk that should be taken into consideration is the misuse of the trademarks by the licensee firm, which often leads to the violation of the licensing agreement. The licensor also faces the risk of losing control over the technology as the rights to the technology are transferred to the licensee. Lastly, the licensee might adhere to the minimum performance clause in the license agreement thereby restricting the potential of the licensor in the foreign market.
Entering into foreign markets poses a few risks when it comes to intellectual property owned by a company. The rules regarding Intellectual Property are not universal especially in developing nations. For this reason, companies have to protect their intellectual property prior to entering a foreign market. First, the company needs to learn the rules and regulations regarding intellectual property in their preferred foreign markets. Secondly, the company needs to take stock of all the intellectual property that will be used in the foreign market. This inventory of intellectual property should be included in the business plan. Thirdly, the company needs to develop an intellectual property strategy, as this will help the company know how the property will assist it in achieving their goals in the foreign market. The company should then seek to formally protect their intellectual property rights in the foreign market. Lastly, the company should prevent and remedy instances where there is infringement of their intellectual property. Read More
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