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Importance of Global Markets for Domestic Producers and Global Markets Strategies

Authors: Dr. Rahman Abedinzadeh Niasser,  Vahid Agha Babaei Strategist and Management Consultant.

Global Markets for Domestic Producers
There is a lot to be said about entering global markets and they cannot be summarized in one or two articles. Using this content can only provide clues to ease of entry into global markets.

Entering the global marketplace for many corporate executives in different industries is a challenging and sometimes daunting topic that can sometimes create stress for senior executives. In this article we will define the global markets, its importance and how to enter the global markets for companies and manufacturers of the carpet industry.

What do global markets mean? Entering global markets is more than just selling your products and services to other countries. Entering global markets means developing strategic plans that align with your target country. Alongside global markets, the definition of globalization is also reflected; globalization is a term used to describe the increasing interdependence of the world’s economies, cultures and populations created by cross-border trade in goods and services, technology, investment flows and information.

It is happening. In fact, to enter other countries’ market requires planning, value creation, placement and promotion of a product or service. In other words, entry into global markets involves all processes related to product distribution or service in the target market.

These processes include planning with different barriers, marketing and advertising costs, selling and delivering to the end customer to achieve the expected result. Why should we enter global markets? Because for a variety of reasons including the enormous advancement of technology, the global witness
Globalization is different companies, some organizations have to immerse themselves in the sea of globalization in this competitive world.

On the other hand, entering this global village is attractive to some companies and can provide them with a competitive advantage. Big businesses are always trying to expand to other countries. Those that have expanded usually have offices, branches, or offices in countries where the target market is located. With the advent of the Internet, even small businesses can reach consumers and customers anywhere in the world. The important point is that if a business does not want to enter the world market, it will have to compete with the companies that enter the world market at the local level.

Global Markets for Domestic Producers
This illustrates the enormous importance of globalization. Another important reason for the globalization of organizations is to improve the potentials for expansion, growth and opportunities for growth. What are the benefits for global markets? Achieving the business objectives of entering global markets is a planned and meticulous set of actions. Here are seven advantages of globalizing businesses

1. By finding new markets for them you can extend the life of existing products and services. If you have a product that has reached its peak of sales in your country and its life cycle is coming to an end, by entering other countries’ markets, you can redefine your product life cycle and redefine your product life cycle by considering other relevant variables. Make a foreign consumption community its peak.

2- You can use technology and know-how to improve your organization through research between competitors and industries in other countries. In fact, entering global markets will reduce your costs by improving processes and standards, which can be a significant competitive advantage for your business.

3. By entering global markets, you can control the constraints and fluctuations in market demand that may be caused by factors such as seasonal changes, environmental changes, industry changes, etc., and reduce sales under conditions.

Prevent specific. You can have a strong competitive advantage. Corporate competition in local markets is easy enough. But there are very few companies that can do this globally. Therefore, if you can compete in global markets, competitors will no longer compete with you because you have become a strong nut in your industry.

5. You can increase end-consumer awareness of your brand and your product or service. End users through the Internet can track your progress in the world; in this case you can do your own branding internationally.

6. Other benefits of entering global markets for different companies include reducing the risk of activity and dependence on the domestic market against risks such as recession. Imagine you had a thriving company in Syria in year 4, right before its civil war. If you had entered foreign markets at that time and had set up branches in another part of the world, you could have at least partially offset the losses in the Syrian war through this foreign market.

7. Finally, as you enter the world market, you will learn how to compete with foreign companies and even compete for market share in their own land.

How to enter the global markets? Even the idea of entering world markets is daunting. Many managers of companies that have the potential for globalization are afraid of entering the global markets simply because of the risk and stress that exists. When faced with overseas investment, they are faced with a great deal of uncertainty and uncertainty, and this lack of information is causing a great deal of frustration. The important thing is that corporate executives do not know where and how to start their globalization, and this ignorance makes them afraid.

This article examines the four main stages of preparation and entry into global markets. It should be noted that in these steps a set of questions and points are asked that need to be addressed and addressed by any manager seeking globalization.

Step One: Examine Your Strengths and Weaknesses Start by taking a look at your company, that is, to what extent are you ready for the next phase of your growth, ie entering global markets? In fact, in this section you should evaluate and evaluate your organizational capabilities, potentials and capabilities as well as your organization’s goals in all aspects.

Think well about what you want to achieve in the new foreign market, including the level of sales you are targeting, and set your overall business goals for the foreign markets. These goals keep you well on track and save you from deviations.

Check your company’s financial capacity. Does the company have the ability to fulfil its export commitments with foreign projects in the long run? Is the cash flow in your company large enough to manage the risks ahead?

Check this out within your company board and see if they are willing to enter foreign markets. Also, evaluate the marketing capabilities of your organization and see what opportunities you need to do international marketing.

Your products and services form the end-user experience of your company. Do your products and services meet the needs and wants of customers in the target markets? What competitive advantage can your products and services offer against your competitors abroad? Finally, you should evaluate the expertise in your organization without any delay. Do you need marketing professionals with management consultants for a variety of areas such as strategy, marketing and finance?

Can the goals you set out for yourself help you answer all these questions and tips properly? Of course, you may conclude by overviewing the company’s capabilities that you need to adjust your goals slightly.
Step Two: Define a comprehensive project for marketing research. If you want to be global, you need to determine which country is more rational and appropriate for you. To determine this, you need to do real research on your services in that country. In the market research phase, you have to answer the big questions and pay close attention to the big things.

Preliminary field research is very important to determine what is happening in the market. Is there a demand for the product or service you sell? Is this market a crowded competitive environment? Is there a niche market that you can choose to enter? It also provides you with a framework to understand the challenges and challenges of starting a business legally and culturally. In this section, try to operationalize a comprehensive understanding of the target market and the variables you need to know about.
Like any other research, the Internet first comes to mind. On the Internet you can get a great deal of information about your target market; scattered and general information about geography, culture, politics, laws and … from various articles and books. Of course, one should not trust the Internet completely because it involves general research on your target market that is not targeted. So they can’t guide you in the direction you need.

To get more targeted information, you need to set up research groups and establish business contacts with the target market and interview them about their fields. It is essential that the members of the market research group attend in person the target market and the various exhibitions held in the target country and closely examine all the factors needed. Even in some cases ethnographic research is necessary; That is, a person purposefully lives in the target market environment for a while and does research. It is necessary for the research group to be located in the social environment of that country and to understand the prevailing social, cultural, political and economic environment through direct communication with its people. To establish a business in a local environment in a foreign country Learn the language restrictions and how to communicate with people in that area. It is also necessary to examine the cultural challenges in that country that can affect different aspects of business such as production, packaging and so on.

The laws governing businesses are one of the most important environmental factors for any organization. These laws can determine the life and death of an organization; from packaging, health and the product itself, to taxes and customs, all are influenced by target market rules. Every business needs to know and communicate with all relevant bodies such as embassies, consulates and guilds in order to continue working in a foreign market. The market research team should conduct a thorough investigation of the competitors in the target market and monitor all their actions. The researcher can even interview them and examine the opportunities and threats of the industry in that market.

A. The most urgent case to consider is the target country’s economy. Investing in global markets imposes a series of financial and non-financial risks on companies.
Therefore, it is very important to know the economic indicators and assess the financial risks in the target market. Companies eager to enter global markets need to look at indicators such as inflation, GDP, the economic status of the various social classes, and many more to do their best. It should be noted that each of the above paragraphs requires in-depth research. For example, the slightest mistake in market research in the field of culture can cause many problems for the organization and even lead to bankruptcy.

Step Three: Determine your entry strategies and methods. Once you’ve done your market research accurately and thoroughly, you can determine the strategies and methods to enter the market using the information gained. There are various ways a company can enter foreign markets. There is no market entry strategy that works for all international markets. Again, there are many factors that influence your choice of entry strategy; For example, tariffs and customs rules, adaptations of your product to different cultures and countries, marketing and advertising costs and shipping are some of the things that can be effective. In this step, 7 practical strategies for effective presence in global markets are presented.

1- Direct exports
Exports are direct sales of goods and services to another country. This strategy is probably the most common and low-risk method known to enter foreign markets. Also, it may be affordable
It is economical because you do not need to invest in production facilities in your country of choice because all goods are manufactured in the country of origin and then shipped to foreign countries for sale. However, rising freight costs are the risk associated with the export strategy. Most export costs are related to marketing costs. In this way, you will usually need the involvement of four parties: your company, the importers, the transport service provider and the target market agents with the distributors Distributors are one of the key factors in the chain that are the interface between you and the end customers. Somehow you make a face.


2. Joint venture
A joint venture is a partnership between a domestic company and a foreign company. In a joint venture, both parties have ownership and control of the investment share. This process is 1 + 1 = 3; that is, two companies agree to work together in a particular market, geographically or productively, and create a third company to do so. Typically, an external partner provides specialized information on new markets, business relationships, networks and access to other in-house business elements such as real estate, real estate and – compliance. Joint venture over other methods of commitment
It needs more from companies because it is riskier and more flexible. Joint ventures may have tax advantages in many countries, especially when companies that enter the global market place higher tariffs than their target markets. Joint ventures may also be undertaken by several countries; this is often the case when business partners gather to launch businesses in a global area. An example of this strategy is the Sue-Ericsson joint venture in the mobile field.

3. Strategic partnership
Strategic companies are almost a necessity when entering some foreign markets. Partnerships can take many forms, from a simple marketing agreement to a complex strategic alliance for production. This strategy is especially useful in markets that are culturally, economically, and socially different from you, as local partners have sufficient knowledge of the local market, audience, and various other factors.

And company dedication
In some markets, buying an existing local company may be the most appropriate entry strategy. This may be because a company has a significant stake in the target market, a direct competitor for you, or because of government regulation; this is the only option for your company to enter the market. Certainly complimenting is the most costly method and determining the true value of a company in the foreign market requires a great deal of precision. On the other hand, this entry strategy will immediately turn you into a local company and you will receive the benefits of local market knowledge and a well-established customer base and the local government treats you as a local company. 

5- Using Infrastructure (Piggybacking)
Infrastructure use is the way in which companies use corporate facilities and infrastructure in the target market to enter foreign markets to sell their products and services. Although it is a low-risk approach that requires little capital, some companies may not choose this approach because it requires high mutual trust and also allows the partner company to control a lot of how your product is sold overseas. At their disposal.

6 Licensing
Under the licensing agreement, companies give foreign companies the right to use the production process, brand, patent, or product knowledge to enter foreign markets. At this site the licensee enjoys a competitive advantage and the licensor gains easy and inexpensive access to the new market. For companies with little capital or where government or import restrictions restrict their access, licensing or licensing is the only way to offer products and services on the world market. This strategy involves risks and requires a long-term commitment from the other side, while bringing little benefit.

7- Franchising
In the franchise process, companies create successful brands and allow other businesses to set up subsidiaries of their company and in return for a periodically paid royalty to that branch. , they take. The strength of the franchise is that it is one of the easy ways to enter new markets. All you have to do in this strategy is to give your business model to the franchisee you find in the target market and penetrate that market. | Franchises work well for companies that have a repeatable business model (for example, grocery stores that easily move to other markets.) When using the franchise model, be careful about two things. Your business must either be very unique or have a strong brand that can be used internationally, secondly, you may be competing against your own franchisee.

Step Four: Plan and then run your program.
At this point, you have made your final decision. Now is the time to devise your plan to attack the world markets. You need to clearly define your goals when planning a market entry. This app should provide the following information:

The budget you need to fund your project; the countries (or regions of a country you are targeting) with opportunities and risks you anticipate in the market / who your competitors will be / Your distribution channels Are they through local distributors, resellers

A partnership, a joint venture, or with your own sales team? Things you need to adapt to the target market, including

Packaging, labeling and promotion / method of pricing, taking into account export costs, compatibility

Product and exchange rate / timeframe for achieving goals

In addition, specify the level of staff who will be doing this international project.

With planning, you can refer a lender or investor to fund your business to make up the difference between your internal resources and what you need to fund your project.

You are now ready to start selling. Make sure you focus on building long-term relationships in your new market and be patient. It can often take up to several years for the firm’s international development to take root.


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