Before settling on the market entry strategies, Langley Fertilizers has to put into consideration a number of things regarding the market entry strategy. At least there is need for proper understanding of the market entry strategy. Consequently, excellent and effective market-entry strategy will give Langley Fertilisers a successful entry to Australia. The company’s market introduction and launch programs, thus will work in ensuring not only significant registration of the company’s expectation in the industry but also ensuring financial targets are met or exceeded even despite the common challenges associated with start up ventures. The Company acknowledges that a sound market-entry strategy will minimize uncertainties commonly faced by new market entrants (Ramamurthi, 2000).
Requirements
Like any other market entering, the Australian agricultural industry will require such aspects as product standardization, labeling, and industry certifications consideration to be taken into account. Langley Fertilizers will therefore, ensure that it has all the requirements that would help it conform to the regulation and standards for a successful and smooth take-off (Ramamurthi, 2000).
With scheduled launch ceremony, the company will ensure that it has sufficient publicity among the targeted clients. Several approaches will be used to get businesses to help the organization commence its operations. Langley Fertilizers will partner with fertilizer Agro- chemicals or exporters in Australia or other targeted foreign markets. Generally, Agro-chemicals are specialized and have in-depth knowledge of the different segments in the agriculture industry. One of the advantages with using wholesalers or other retail dealers in foreign markets is that, with competitive prices they will be willing to cater for all the requirements associated with importations such as product warehousing, paperwork, and any other distribution activity (Cateora, 2007).
Having done a thorough and a comprehensive market and industry environment analysis; and fulfilled all the legal and industry requirements, Langley Fertilizers will develop a systematic market-entry process that will allow it to begin operations with increased competitiveness. The company will begin operations in the mid of 2011 and a month later conduct an official launch which will be publicised through different mediums (Griffin & Pustay, 2006).
Market Entry Strategies
The three market entry strategies suitable for the company are licensing, contracting and joint ventures.
a. Licensing
This refers to a contractual agreement where the licensor company avails the asset to the licensee company in exchange for license fees, royalties or such other forms of compensation as product formulations, brand name, trade secret and patent.
Advantages
This strategy gives extra profitability even with small initial investment, gives way of circumventing quotas, export barriers and tarrifs, Offers attractive ROI and requires low implementation costs (Ganitsky, 1989).
Disadvantages
With this method, there is Lack of control, Licensee exploiting company resources, losing of returns, licensee becoming competitor and limited participation.
Joint ventures
This strategy is meant for a one target country. The ownership of the business entity that is newly created is shared by partners.
Advantages
This strategy Allows for sharing of political and financial risks, Offers opportunity of learning new environment, offers opportunity of achieving synergy by merging strengths of partners and Overcomes barriers to entry (Griffin & Pustay, 2006).
Disadvantages
With this method, there is need for more investment compared with licensing agreement, Sharing of rewards and risks, need for strong coordination, and brings Competition between partners.
Global strategic partnership
This refers to the act of two or more companies developing a long-term joint strategy.
Advantages
It has a Reciprocal relationship, employs Global partner’s efforts and vision, has Horizontal organization of relationship (Cateora, 2007).
Disadvantage
The competition may arise between or among partners and there are also chances of ideology differences among partners.
References:
Cateora, P., 2007. International Marketing. Boston: McGraw Hill Irwin.
Ganitsky, J., 1989. Environmental Assessment and Marketing Plans of Leading. Domestic
and Foreign Firms Operating in Latin America. Journal of Global Marketing, 1989 2(3)19-48.
Griffin, R. W. & Pustay, M. W., 2006. International Business: A Managerial Perspective.
London: Prentice Hall 2006. Print.
Ramamurthi R., 2000. A Multilevel Model of Privatization in Emerging Economies.”
Academy of Management Review, Volume 21, Number 3, July 2000, 525-550.
