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Entry into Foreign Market - Case Study Example

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The author of the current paper states that commercial organizations undertaking business activities within contemporary economic environments have a tendency to undergo expansion at one point or another. Expansion takes place in two aspects. A company can undergo expansion in terms of production…
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Entry into Foreign Market
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Download file to see previous pages An increase in the consumer population translates into a corresponding increase in revenue generation. This means that international corporations wanted to increase their customer base; hence established business facilities within international markets. Tielmann (2010) says that despite the fact that most business environments are present within a free market setting, other factors still play a significant role in starting and developing production and sales activities within such settings. Therefore, business organizations wishing to expand into new markets should adopt appropriate strategies in order to achieve marketing success. From a practical perspective, entry into a new market needs systematic approaches depending on the internal and external factors surrounding the company. Typical internal factors include a company’s efficiency in management, availability of resources for expansion and the culture of its business operations. On the other hand, external factors include those elements lying outside the control of the company’s management. According to Erkan (2011), these include social, political and economic factors prevailing within the new market. The nature of internal and external factors acknowledged above could either smoothen or toughen a company’s entry into a new market. In the context of marketing terminologies, effects on the environment could narrow down to aspects of risk, cost, and magnitude of control that an organization experiences upon entering a market segment. In the process of determining as to whether entry into a new market will be successful, company managers select appropriate strategies that will produce the best-desired outcomes. Upon thorough analysis, some organizations may decide to use indirect market entry, which involves the export of manufactured products into the new markets using existing supply channels. On the other hand, product manufacture may use a direct entry method by a partnership with agents already present within a new market environment. In this regard, the operational thesis statement postulates that the Myanmar oil industry is a potential market for Cameron’s production equipment. Institutional Strengths and Risks Having appreciated the theoretical framework of new market entry, we will conduct a real life analysis on Cameron International Corporation. This organization has successfully entered another new market in the past. Erkan (2011) says that currently, Cameron International Corporation is undertaking its business operations in approximately 100 countries around the globe. Its expansion strategies have yielded fruits; hence there is a growing desire to venture into other virgin territories. This time, Cameron International Corporation has identified Myanmar, a reforming South Asian nation formerly known as Burma, as its target market. In the year 2010, the company posted a profit of approximately $ 500 million. This profit resulted mainly from its operation within the US market. Cameron Corporation deals with the production and supply of equipment used in oil and gas productions around the globe. In this case, the organization decided to venture into the South Asian nation in the subject since Myanmar has prospectus profile in terms of oil and gas resources. In the past, the nation had a dented history of human rights abuses. According to Henry (2012), this serves as the reason why its oil and gas industry failed to attract international investors. ...Download file to see next pagesRead More
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