Entering International Markets

Entering International Markets

The University of Phoenix online simulation, "Entering International Markets" teaches the elements of deciding how to enter a foreign market. The fictitious company

Trinezza, manufactures and markets a fuel efficient high-end scooter that has sold well in the U.S. with young business professionals but has not been marketed overseas. The simulation highlights the problems and consideration in moving into the country of Sentonia.

The Cynta and the Trinezza name are well known but not in this new market. In doing the SWOTT, the brand, which would be a strength in the U.S., yet does little for us in this new market. The product is the greatest strength since there are few competitors that offer the quality or efficiency of the Cynta. Weaknesses in the Sentonia market would be the size of the company which limits the available resources, production capacity, and financial ability which limits options of our entry. Opportunities include the size of the middle class (4 million) which would be our target market since the cost of our Cynta is half the GNP per capita and would appeal to this group and the lack of foreign competition. Threats include the restrictive government which allows only minority ownership by foreign investors and the many local competitors that control most of the market in the country.

Since Trinezza is a small company it faces many challenges that a larger firm could avoid. Most large firms have greater production capacity, more availability to financing, can support struggling markets with profits from other area revenues, can move into multiple markets simultaneously, and often have well known brands. Larger firms would have been able to meet many of these challenges with their greater resources.

Many of the factors that would contribute to a firm's choice of when to enter a particular market, how to enter, and when to exit were observed in the simulation. The saturation of the domestic market prompted the move into Sentonia after it was noticed that it appeared to have a sufficient market demand and middle class affluence. The government restriction on foreign investment stopped the ability of majority partnerships or wholly owned subsidiaries that many firms may want or need to control their product or service. The liberalization of the Sentonian market caused a shift