Market selected
The DPWN management selected to go international by trying to sell its mailing services and products to a number of markets internationally.
Market entry mode
These are ways in which DPWN seek to market its services globally and this usually depends on the quality of the company’s products and the nature of competition that rival firms employ in trying to expand their market share and to maintain their growth. There are various methods of entry to different markets and DPWN has to select the effective ones depending on cost, risk and the degree of control that can be exercised over them in terms of security. The following are some of the modes of entry that DPWN applies.
Direct exporting
Direct exporting involves the producer of the products or services dealing directly with a buyer in the foreign country and is often regarded as the difficult method of entry because the owner or the exporter of the product is entirely responsible for the business undertaking for example researching the suitable market for the products and establishing the suitable distribution channels to be used. Therefore, this method requires much attention in terms of management and the resources to be used in the entire exporting process. It is also arguably the best method because the exporter may benefit from reaping maximum profits and may enjoy long-term growth thus the company can maintain its base in those countries.
Indirect exporting
Under indirect exporting an exporter can access a foreign market free from the risks of doing it directly. It involves the use of independent organizations within the exporter’s domestic markets. It can be done through various ways, for example, domestic-based export merchants, who take the title of the goods and sells them in those countries abroad, domestic-based export agents who sell and market the goods on behalf of the exporter and co-operative organizations who act on behalf of the producers.
Joint ventures
A joint venture partnership is a partnership created by one or more companies with a view to carrying out a common business together. They contribute equally to the business and agree to share any profits in a certain per cent in the course of the business. Such a business is referred to as an equity joint venture and it is favourable because there is sharing of risk and losses. There is also a contract joint venture which involves the creation of new firms in which foreign and local investors share ownership and control.
Generally, joint ventures are common where government conditions demand so in order to ensure control, nationalism and reduced re-patriation of profits. It will be an ideal situation if the company is still young and wish to exploit other markets for their products since it requires fewer resources. However, it has potential problems and includes sharing of profits, employment issues, market coverage and decision making due to different long-term interests of partners.