NON-TEACHING CREDIT COURSE (NTCC)

TERM PAPER
(MSTP-100)

Submitted for the partial fulfilment of the requirement of the degree of

BACHELOR OF BUSINESS ADMINISTRATION

(International Business & Artificial Intelligence)

Foreign Market Penetration Tactics: Entry Approaches for Companies

Submitted By: Aaryan Singh Submitted To: Dr. Sumita Mukherjee

Enrolment No.: A018130523055 Date of Submission:

Amity International Business School (AIBS)

Amity University
Sector – 125, Noida, Uttar Pradesh – 201303

1
 TERM PAPER (MSTP-100)

Foreign Market Penetration Tactics: Entry Approaches for Companies

Submitted to:
Amity International Business School (AIBS)
Amity University, Noida, UP

In partial fulfilment of the requirements for the degree of

BBA (IBAI)

BY:
AARYAN SINGH
Enrolment No: A018130523055

Submitted to:
DR. SUMITA MUKHERJEE

2
 PROJECT REPORT: 2024

PROJECT TITLE: Foreign Market Penetration Tactics

Entry Approaches for Companies

PROGRAM: BBA - IBAI

SEMESTER: 03
NAME OF THE STUDENT: Aaryan Singh
ENROLMENT NUMBER: A018130523055

BATCH: 2023-2026
NAME OF GUIDE: Dr. Sumita Mukherjee

3
4
 DECLARATION

I hereby declare that the project work entitled Foreign Market Penetration Tactics:

Entry Approaches for Companies submitted to Amity University, Noida, Uttar Pradesh
201301 is a record of the original work done by me under the guidance of DR. Sumita
Mukherjee, NTCC Co-ordinator, Amity International Business School (AIBS).

This project report is submitted in the partial fulfilment of the requirements for the award of
the degree of Bachelors of Business Administration, International Business and Artificial
Intelligence BBA (IBAI).

The results embodied in this thesis have not been submitted to any other university or institute
for the award of any degree or diploma.

AARYAN SINGH
Enrolment No - A018130523055

5
 CERTIFICATE

This is to certify that the project titled Foreign Market Penetration Tactics: Entry
Approaches for Companies. This project is submitted by Aaryan Singh (Enrolment No –
A018130523055), Amity International Business School (AIBS) in fulfilment of the
requirement for BBA BI&DA, Bachelors of Business Administration in Business Intelligence
and Data Analytics. This project was an authentic work done by her under my supervision and
guidance.

This project has not been submitted to any other institution for the award of a diploma or
Degree.

Date:
Place: Noida, Uttar Pradesh

Dr. SUMITA MUKHERJEE

Faculty Guide
NTCC Co-ordinator
Amity International Business School (AIBS)

6
 ACKNOWLEDGEMENT

The success and final outcome of this project required a lot of guidance and assistance from
many people and I am extremely fortunate to have got this all along the completion of my
project report. Whatever I have done is only due to such guidance and assistance and I would
not forget to thank them.

I respect and thank DR. SUMITA MUKHERJEE, for giving me an opportunity to do the
project work on the topic Foreign Market Penetration Tactics: Entry Approaches for
Companies and providing us all support and guidance which made me complete the project
on time. I am extremely grateful to him for providing such a nice support and guidance though
he has busy schedule managing the institute affairs.

I owe my profound gratitude to our faculty guide who took keen interest on out project work
and guided us all along, till the competition of our report by providing all the necessary
information for developing a good system.

I am thankful and fortunate enough to get constant encouragement, support and guidance from
all teaching staffs of department of International Business which helped me in successfully
completing the project report.

My thanks and appreciations also go to my colleagues in developing the project and people
who have willingly helped me out with their abilities.

AARYAN SINGH
Enrolment No - A018130523055

7
 TABLE OF CONTENTS

[Link] TOPIC PAGE

NO.

1. Abstract of the Research 9

2. Key Words 9
3. Introduction 10
[Link] are International Companies Different? 11
[Link] Context and Trends 12

4. Literature Review 13
5. Research Objectives 16
6. Research Methodology 17
7. Discussion and Analysis 18
7.1. Marketing Research and Consumer Understanding 18
7.2. Entry Strategies and Modes 19
7.3. Cultural and Regulatory Environments 19
7.4. Sustainability and Corporate Social Responsibility 19
7.5. Risk Management and Adaptability 19
7.6. Exporting 20
7.7. Licensing 21
7.8. Franchising 21
7.9. Joint Ventures 23
7.10. Wholly Owned Subsidiaries 24

8. Suggestions and Recommendations 25

9. Conclusion 26
10. References 28
11. Annexure 31

8
ABSTRACT

The cornerstone of a company’s growth is its expansion into larger markets. This research
paper delves into the strategies and methodologies companies utilize to penetrate foreign
markets. With the aim to identify the key factors that result a successful market entry and a
strong growth. Upon reviewing numerous research papers, this research paper includes all the
strategies a company may use to enter a foreign market, how this process affects the work
environment of the company and how the companies choose the best strategy to employ in this
process. The study of various entry modes- such as franchising, licensing, exporting, joint-
ventures and wholly-owned subsidiaries,

This paper also suggests practical insights and practices for overcoming common obstacles.
The findings intend to provide business leaders and entrepreneurs with a deeper understanding
of the process of the foreign market entry tactics. This study also highlights the crucial role of
external factors, including cultural, economic and regulatory environments, in forming the
market penetration decisions. Furthermore, this research examines the long-term outcomes of
all the entry strategies, evaluating their effectiveness in fostering competitive advantages and
market growth. Ultimately, this research paper contributes to the larger discourse on
internation business presence and strategy, offering an insight to companies on the
complexities, solutions, and potential of all such strategies.

KEY WORDS
Market Entry Strategies, International Expansion, Cultural Adaptation, Globalization, Foreign
Market Penetration

9
INTRODUCTION
Spreading out operations into the international markets is a significant achievement for
companies planning to expand their business, increase their profit and influence the market on
a global level. The global market is characterized by its diverse economic, cultural, and
regulatory environments. It offers unparalleled opportunities for the people but also presents
daunting challenges. Understanding the complexity of penetrating foreign markets is very
important for a company’s growth and maintaining a competitive edge in this time of
modernization and rapid technological change.

In this paper, I have explored about all the strategies that companies may adopt to enter
international markets and how these strategies help those firms to uphold and maintain an
advantage over its competitors. Overall, the international market refers to all the economic and
financial activities held across the world through the exchange of goods, services, and capital.
This dynamic environment that is never constant requires companies to navigate differences in
consumer preferences, legal frameworks, and competitive landscapes.

Companies choose from a range of market entry strategies tailored to their specific business
aims and conditions. Some firms aim to take advantage of economies of scale and quickly reach
larger number of consumers, while others prioritize strategies that lower the risks and
investments. The choice of choosing a certain strategy depends on numerous situations and
factors such as company resources, target market characteristics, and overall business
objectives.

The unique cultural and economic environments of foreign markets drive the selection of these
strategies. Understanding behaviour of the consumers, economic conditions, and legal
requirements is important for adapting products and marketing efforts appropriately.
Identifying these external factors is key to minimizing the risks associated with entering new
markets.

Globalization and modernization have further enhanced the landscape of foreign market entry.
All these developments have helped all the companies, including small and medium-sized firms
to go global. Technologies enable businesses to reach consumers around the world faster and
efficiently, breaking down the traditional barriers to entry.

10
How Are International Companies Different?

International companies differ significantly from local companies in their approach to market
entry and operations. Unlike local companies, which operate within their home countries'
borders, international companies manage operations in multiple countries. This requires a
global perspective, integrating diverse cultural insights and market knowledge into their
strategies. Developing a global mindset requires openness towards the cultural differences and
local market changes.

For example, a product that is successful in one country may need certain changes attract to
the consumers in another. International companies invest heavily in market research to
understand what the locals like, their purchasing behaviours, and cultural norms. This research
benefits the company by allowing them to understand what has to be done under product
designs, marketing strategies, and customer service practices.

Managing global supply chains is another important aspect of businesses that are international.
Companies must coordinate things such as production and manufacturing across different
countries or continents, organize distribution and tackle challenges such as import/export
regulations and transportation issues. Efficient supply chain management is important to
maintain product quality, keep costs low and deliver products on time. Advanced technologies
in supply chain management and real-time tracking systems play a huge role in optimizing
these processes.

Complying with different regulatory standards is another big challenge for international
companies. Different countries have different laws governing business activities, product
safety, labour conditions, and environmental standards. International firms must tackle these
legal landscapes to ensure compliance and avoid hefty fines. This often involves working
together with experts in the host country's laws and regulatory agencies and implementing
robust internal compliance programs.

Local firms, on the other hand, have an advantage with deep knowledge of their domestic
markets. This allows them to produce their products precisely to local customer needs and
maintain strong relationships with local suppliers and regulators. Local firms are typically more
flexible in their decision-making processes, allowing them to respond quickly to market
changes and stay actively responsive to current consumer trends and preferences.

11
However, local firms often lack the wider plans and resources of global companies.
International expansion requires capital investment, deep market analysis, and the ability to
handle operations across diverse economic regulatory environments. For local firms to succeed
globally, they need to develop new capabilities, which may involve organizing a different
business model and organizational structure. Transitioning to an international company can be
challenging but is important for achieving global success.

Historical Context and trends-

The historical context and trends of the past in international business strategies provide an
overview for understanding how companies enter foreign markets today.

Over the past decades, this area of the international business has transformed exponentially,
influenced by major events, advancements and economic changes.

Earlier, the international trade was dominated by multinational companies and colonials.
Exporting was the foremost and biggest type of international market penetration stratergy. Post
world war II, the rapid redevelopment of Europe and Asia brought new waves of international
business via trades and investments. The establishments of institutions such as International
Monetary Fund [IMF], World Trade Centre and World Bank laid the groundwork for liberalized
and structured international trade. The early 21st century saw the rise of modernization
followed by rise in number of multinational corporations and technological advancements.
New markets opened up in areas like Eastern Europe. Outsorcing, offshoring and global supply
chain management became prominent. Later in the recent decades, E-Commerce platforms
revolutionized the market and made it possible for even small enterprises to engage in foreign
markets.

Today, the focus has transitioned towards strategic alliances, partnerships and joint ventures as
companies seek to lower risks and increase profitability. Global consumers and workers have
started to demand ethical and friendly business practices.

Understanding these historical practices is important for understanding the dynamics of

penetrating international markets.

12
LITERATURE REVIEW

Foreign market penetration is a critical strategy for companies seeking to expand their
operations beyond domestic borders. Successful entry into foreign markets requires a
comprehensive understanding of various approaches, each presenting unique benefits and
challenges. This literature review delves into the primary foreign market entry tactics,
including exporting, licensing, franchising, joint ventures, and wholly-owned subsidiaries. The
review synthesizes theoretical frameworks and practical case studies to provide a nuanced
understanding of these entry strategies.

Exporting is the most straightforward form of international market entry, involving the sale of
goods or services produced in one country to another. This method is favored due to its lower
risk and investment requirements compared to other entry strategies. According to Root (1994),
exporting allows firms to expand their market reach with minimal financial commitment,
making it an attractive option for small and medium-sized enterprises (SMEs) [1].

However, Czinkota and Ronkainen (2004) highlight several challenges associated with
exporting, such as tariff barriers, logistical complexities, and the need for effective international
marketing strategies [2].

Johanson and Vahlne (1977) introduced the Uppsala Internationalization Model, which posits
that firms gradually increase their international involvement through incremental steps, starting
with exporting [3]. This model underscores the importance of experiential knowledge and
learning in the export process. Studies by Bilkey and Tesar (1977) and Cavusgil (1980) further
support this incremental approach, suggesting that firms initially export to geographically and
culturally close markets before venturing into more distant and diverse regions [4], [5].

Licensing involves granting a foreign company the rights to produce and sell a company's
product in exchange for royalties or a fee. This method provides a way to penetrate foreign
markets without significant capital investment. Hill (2007) states that licensing is particularly
beneficial for companies with proprietary technology or strong brand names, as it allows for
rapid market entry and revenue generation with relatively low risk [6]. However, Teece (1986)
cautions that licensing can lead to a loss of control over technology and brand reputation, as
the licensee may not adhere to the same quality standards as the licensor [7].

13
The Resource-Based View (RBV) of the firm, as articulated by Barney (1991), provides a
theoretical framework for understanding the strategic advantages of licensing. According to
the RBV, firms with valuable, rare, inimitable, and non-substitutable (VRIN) resources can
leverage these assets through licensing agreements to gain a competitive edge in foreign
markets [8]. Empirical studies by Contractor and Kundu (1998) and Hennart (1991) confirm
that licensing is a viable entry strategy for firms with strong intellectual property and brand
equity [9], [10].

Franchising is an extension of licensing, where the franchisor provides not only the product but
also a comprehensive business model and ongoing support. Alon (2004) notes that franchising
allows for rapid market expansion with relatively low capital requirements, as the franchisee
bears much of the investment risk [11].

However, Altinay and Wang (2006) emphasize the importance of maintaining consistent
service quality and brand image across different markets, which can be challenging due to
cultural and operational differences [12].

Hoffman and Preble (2004) highlight the dual agency problems in franchising, where both
franchisors and franchisees may act opportunistically. Effective contract design and monitoring
mechanisms are essential to mitigate these risks [13]. Studies by Shane (1996) and Combs and
Ketchen (2003) suggest that franchising is particularly effective in-service industries, where
brand reputation and standardized service delivery are critical success factors [14], [15].

Joint ventures (JVs) involve partnering with a local firm to enter a foreign market. This strategy
allows companies to leverage local knowledge and networks, facilitating smoother market
entry. Geringer and Hebert (1989) emphasize the benefits of risk-sharing and access to local
resources, which can enhance the competitive position of the JV in the target market [16].
However, Yan and Luo (2001) warn about potential conflicts between partners, which can
arise from differing objectives, cultural misunderstandings, and variations in management
practices [17].

The Transaction Cost Theory (TCT) and the Resource Dependence Theory (RDT) provide
valuable insights into the dynamics of joint ventures. According to TCT, as articulated by
Williamson (1985), joint ventures can reduce transaction costs associated with market entry by
aligning the interests of the partners [18].

14
RDT, as proposed by Pfeffer and Salancik (1978), suggests that joint ventures can help firms
manage interdependencies and access critical resources in the foreign market [19].

Empirical studies by Kogut (1988) and Hennart (1988) corroborate the theoretical predictions,
showing that joint ventures are particularly effective in complex and uncertain environments
[20], [21].

Establishing a wholly-owned subsidiary involves setting up a new operation in the foreign

market, either through acquisition or greenfield investment. This method provides complete
control over operations and strategy, allowing firms to fully integrate their global operations.
According to Anderson and Gatignon (1986), this approach is suited for companies with
substantial resources and a long-term commitment to the foreign market, as it offers the highest
potential for returns [22]. However, it also entails higher risks and costs, including political and
economic instability in the host country [23].

The Eclectic Paradigm, developed by Dunning (1988), integrates elements of the RBV, TCT,
and the International Product Life Cycle (IPLC) theory to explain the choice of wholly-owned
subsidiaries. According to the Eclectic Paradigm, firms choose this entry mode when they
possess ownership-specific advantages, location-specific advantages, and internalization
incentives that justify the high investment costs [24].

Empirical studies by Pan and Tse (2000) and Brouthers (2002) support the paradigm,
indicating that wholly-owned subsidiaries are preferred in markets with high growth potential
and low regulatory barriers [25], [26].

The choice of market entry strategy is contingent upon a variety of factors, including the firm's
resources, the nature of the target market, and the level of risk the company is willing to assume.
While exporting and licensing offer lower-risk alternatives, franchising, joint ventures, and
wholly-owned subsidiaries provide greater control and potential for higher returns. Future
research should focus on the evolving dynamics of global markets, the impact of digital
technologies on market entry strategies, and the role of emerging market multinationals in
shaping international business practices.

15
OBJECTIVES

 Deeply analyse different market entry strategies companies use for foreign market
penetration.
 Understand technological influence on the international market and how it changes
the international entry strategies tactics.
 Examine the factors that rule in the correct entry strategy for a company to use.
 Compare foreign and local enterprises on various levels and examine what differences
influence their profitability.
 Understand the impact of E-Commerce in the international penetration strategy and
tactics.
 Assess how cultural differences influence a company’s settlement in that market.
 -Recommend best practices for a company to penetrate the foreign market

16
RESEARCH METHODOLOGY

The Methodology proceeds towards gathering and analysing the Secondary data to examine
the strategies companies adopt to enter into international Markets.

Research Design:

The Research Design for this report is Qualitative and Descriptive completely focusing on
existing information.

Data Sources:

The Report is completely based on Secondary Data sources such as Industry specific blogs,
market research reports, company annual reports, analysis reports, articles from reputable
journals and websites. Also documented case studies of companies have successfully
contributed in the gathering outcomes for the report.

Data Collection Process:

Identifying the key words such as international expansion, foreign market strategy,
globalisation etc. Using these words Relevant sources were searched from online databases and
digital libraries. Preference was given to recent trends and publications from reputed sources.
The gathered sources were compiled based on their type of entry strategy and proposed actions.

Data Analysis:

Thematic analysis was done to identify common patters and themes related to entry strategies.
To compare the different strategies used by various companies and regions output was achieved
using Comparative Analysis. Emerging trends and patterns were identified to provide a
comprehensive understanding of various strategies.

The study completely relies on availability of existing sources which may not cover all aspects
of market entry strategies. The report aims to provide valuable insights, companies use to
expand into global markets.

17
DISCUSSION AND ANALYSIS

The process of entering foreign markets in multifaceted and requires companies to find and
tackle a variety of challenges and opportunities.

This discussion analyses key factors and considerations that direct a company’s success in
expansion to global market. Real world examples of companies will be used to demonstrate
how the strategies used by them influenced the future and the performance of the companies.

Marketing research and consumer understanding-

One of the first steps in entering a foreign market is conducting deep market research.
Companies need to understand the target market’s size, growth potential, opportunities,
environment and regulatory norms. Comprehensive market analysis helps a company identify
and understand the gaps in the market, demand for the products or services, modifications
requirements and the best entry strategies.

For instance, a company looking to enter a foreign market must consider the economic
conditions, income levels, regulatory changes and cultural differences that may affect the
customer preferences. By modifying products and changing marketing strategies accordingly,
companies can increase their chances of success.

Entry strategies and modes-

Selecting the right penetration strategy model is important for successful implementation of a
business in a foreign market. It is also important for companies to select the right strategy to
lower the risks and get higher profits. There are numerous entry strategies a company can
choose from- Licensing, exporting, franchising, joint ventures and wholly-owned subsidiaries.
The choice of entry strategy also depends on factors such as the level control desired, risk
handling capability and future goals.

18
Cultural and regulatory environments-

Contrasting cultures of different places and different regulatory environments can play a huge
role in shaping market entry strategies. Companies must make sure that their products, policies,
services and practices align with the cultural norms and environment in the foreign market
place. Companies may have to make certain modifications like packaging, pricing and
marketing strategies for successful implementation and operation.

Regulatory compliance is as important as different countries have different set of laws an d

adhering accordingly is crucial for sustaining growth and developing a trusted marketplace in
the country. Failing to comply with the laws can result in penalties, fines, reputational damage
and consumer base hampering.

Sustainability and corporate social responsibility-

Sustainability and CSR are very important today in the international business market.
Companies are required to function responsibly and contribute towards the well being of the
society. Practices that promote this include reducing environmental impact, promoting fair
labour practices and supporting overall development.

Incorporating CSR into entry strategies aligns with international standards and addresses the
increasing demand from consumersfor ethical and responsible products.

Risk management and adaptability-

Entering a foreign market is very risky. Cultural differences, political tensions and environment
changes are a few factors. Risk management involves identifying risks, developing counter
plans and ideas for the same and being open and adaptable to changing conditions. Companies,
at all times, must be prepared to modify their strategy in response to any change or pressure in
the new environment. This is important to avoid issues and uncertainties in the market.

19
As mentioned in the report, choosing the right entry strategy is crucial for a company’s
successful penetration into the foreign market. All the entry strategies are discussed in detail
below-

1. EXPORTING

Exporting refers to a product or service produced in one country and sold to a buyer abroad.
They are the oldest forms of economic transfer. Exports may increase a firm’s sales and profit.

There are two types of exporting-

A. Direct exporting

In this method, the company sells its product directly to foreign market customers. Company
uses its own resources and manpower. The benefit of this method is that it provides more
control over the overall process but it also requires a higher investment.

B. Indirect exporting

In this method, the company to intermediaries, such as export companies and managements or
trading companies, which then proceed to sell the products further into the foreign market. This
approach requires less investment and resources and it involves less risk as well but it offers
less control over the market.

C. Merchandise exports

Merchandise exports are referred to the type of exporting where the physical goods are made
in the home country and then distributed in another countries.

Examples include- automobiles, electronics, machinery, etc.

D. Service exports

Under this, services are provided by the companies of the home country to foreign clients.

Examples of the services are- financial services, consultancy, strategic planning, etc.

20
 2. LICENSING

Licensing is a business arrangement in which one company grants permission to another

company to manufacture its products or so for a specific payment. Licensing lets you your
hands on the existing production, marketing, distribution without any hurdles and troubles. In
return, you get a percentage of the revenue made under your license.

For instance, almost 90% of the over 150 million dollars a year is sales at Calvin Klein inc.
comes from licensing. Many Giant corporations, such as Walt Disney Co., generate less
proportions of their revenue from licenses.

Licensing is a billion-dollar retail market worldwide. But, as easy and money making as it
seems, it can’t be an instant success. It gives you the name and tag that has a customer base but
it still takes good marketing and strategies to succeed. A License can be thought of as a tool,
that when used correctly can make the business a success.

Advantages of licensing-

Licensing allows for fast market entry with low risks and investments. It allows the licensor to
gain control over the licensee’s local market and infrastructure.

Challenges of licensing-

As the licensor has limited control over the licensee’s operations, the quality can reputation of
the products can be impacted.

3. FRANCHISING

Franchising is done by companies to spread their brand internationally. In this the rights are
given to contenders who operate the business under the same business model and pay the
franchisor royalties. In this full control can be assumed with lower operational and financial
risks.

FRANCHISOR- It is the owner of the business

21
FRANCHISEE- It is an individual or entity that acquires the right become an expansion of the
company.

Types of Franchising

There are different kinds of franchising models-

A. Product distribution franchising

In this type of model, the franchisee gets the rights to sell their products under their brand name.
The franchisee looks after the sales.

Coca-Cola is an example of such model using company.

B. Business format franchising

This model is the mostly used one. The franchisee sells their products under the brand of the
franchisor.

McDonald’s uses this business model.

C. Manufacturing franchise model

Under this model, franchisees have to sell their product under the franchisor’s IP.

The franchisees are supposed to follow many rules in this model, for instance, a beverage
franchisee is supposed to follow the same recipe as asked by the franchisor to minimize taste
and quality difference and to maintain consistency throughout.

Franchisees are in charge of the supply chain management, including sourcing raw materials,
ensuring coordination and more. Franchisors provide guidance and training to the employees
for the operations to run smoothly.

D. Conversion Franchise model

This model allows existing business operating within the same industry as a franchise to join
the franchise’s network. While franchisees usually adopt the franchisor’s brand identity,

22
operational standards, etc, conversion franchisees maintain some degree of autonomy in their
day-to-day operations.

Business that mostly use this model are retail stores, medical clinics, etc.

E. Master franchise model

In this model, a franchisee opens a sub-franchisee and manages it and pays fees to the
franchisor.

F. Investment franchise model.

Under this model, the investors make an investment and provide the necessary resources to set
up or buy a franchise unit with the aim of making a return. These franchisees are investors with
a proven track record in the same field. These investors don’t contribute to the operations and
plannings of the franchise. In return for the investment made, the investors receive a share of
the profit made from that particular unit.

Some common examples are hotels, restaurants, etc.

4. JOINT VENTURES

A joint venture is a partnership between two countries, one foreign and one local. Together the
create a new business entity. Both the company share control and profits.

Advantages of a Joint venture-

Joint ventures are beneficial for both the companies as the resources and knowledge of the
markets is combined. Financial risks is also minimized and investment costs are also shared.

Challenges of Joint Ventures-

High coordination is required between the companies which may be difficult to achieve.
Corporate differences, cultural differences and management differences can also be an issue.

23
 5. WHOLLY OWNED SUBSIDARIES

It means an existing company takes entire control over a new business in the foreign market.
This can be done by acquiring a new company or setting up a new business.

Advantages of wholly owned subsidiaries

Parent company gets all the power so they can decide all the strategies and standards. Full profit
to single company as there is no profit sharing.

Challenges of wholly owned subsidiaries

Huge financial investment required as the purchase of another company is involved, which
equates to higher risk. Also deep knowledge of the new market is required.

24
 SUGGESTIONS AND RECOMANDATIONS

Companies can adapt and use multiple strategies as an entry approach rather than relying on a
single method. This technique can minimize loss and increase profitability.

Companies should take into consideration and invest in understanding the local market to create
a healthy sure shot plan to penetrate the market.

Emphasize on understanding the cultural environment should also be done the companies as
this can increase the chances of a successful penetration into the foreign market. All this can
also help the company to understand what modifications can be made in their products to attract
the local markets.

Companies must focus on the regulatory changes and stay updated on the laws of the local
government to avoid any legal issues. A track should be kept on the new standards and
requirements of the customers so that certain modifications are made accordingly.

Risk management strategies of the companies should be strong and contingency plans should
be ready along with financial security, political risk insurance. Having a proper risk
management strategy saves a lot of time, minimizes losses and increases profitability.

Continuous learning and adaptation are important for companies. Companies should regularly
review their performance and learn how they can enhance their performance.

Investment in human resources is important. Hiring local talent and training them can be very
beneficial for the company.

Feedback mechanism can be setup in companies to get feedback by customers to understand

where they lack and room for environment. Regular assessments can help identify room for
scope.

25
 CONCLUSION

SUMMARY OF THE FINDINGS-

This research paper explored various strategies that companies use to penetrate a foreign
market. These strategies include- exporting, licensing, franchising, joint ventures and wholly
owned subsidiaries including a few more. Each strategy offers its own set of advantages,
benefits and disadvantages. A company may choose to opt for a certain strategy to enter a new
market.

IMPORTANCE OF STRATEGIC CHOICE

The choice of the entry strategies impacts the success of the company in the foreign market.

Foe example, exporting is a low investment and low risk strategy so a company that is looking
invest a lower amount can opt for this strategy. On the other hand, Joint ventures and wholly
owned subsidiaries are more resource-intensive, require more investment but provide more
control over the market once implemented.

ADAPTATION OF THE LOCAL MARKETS

A company’s ability to adapt to a local market, understand the customer’s interest, adapt to the
culture and recognize the essence of the market can contribute a loot towards the success of the
company in that market.

ROLE OF INNOVATION AND TECHNOLOGY

The emergence of E-commerce businesses and AI tools has significantly impacted and
revolutionised how companies enter and operate in foreign markets.

The introduction of these strategies has made it easier for small and medium size enterprises to
operate in foreign markets,

26
FUTURE RESEARCH

In conclusion, penetrating a foreign market is a multifaceted process with many steps that
requires careful planning and execution and if done right, can be very beneficial for the
company.

Future research could explore the upcoming market trends, the changes after the emergence of
the e-commerce businesses and the impact of ARTIFICIAL INTELLIGENCE on the foreign
market penetration tactics.

27
REFERENCES

[1] F. R. Root, "Entry Strategies for International Markets," Jossey-Bass, 1994.

[2] M. R. Czinkota and I. A. Ronkainen, "International Marketing," South-Western College Pub,

2004.

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 ANNEXURE

TITLE:

Foreign Market Penetration Tactics: Entry Approaches for Companies

BY:
AARYAN SINGH
A018130523055

A project report in partial fulfilment of the requirements for the degree of

Bachelors of Business administrations (International Business & Artificial Intelligence)
BBA-IBAI (2023-2026)
of Amity University, Noida, India.

Amity International Business School

Amity University, Noida, 201-301

31