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The article discusses the strategies of global market expansion for entrepreneurial firms. Two types of strategies are identified: market diversification and market concentration. The first strategy is based on a gradual expansion from one market to another. The second strategy is more aggressive and implies fast expansion into multiple markets. Both strategies generally lead to the same number of markets served but are characterized by different patterns of growth and can result in different outcomes in terms of market share, competition, and profitability (Zif, 2020). The article discusses the ways of assessing customer response and additional factors that can influence the companys market expansion decision, including supply difficulties, external conditions, and managerial motivation.
When choosing a global market expansion strategy, several factors should be taken into consideration. The most important of them are expected consumer response and the complexity of the product from the marketing point of view. If a product is not expected to generate an immediate sales response, more concentrated marketing efforts are required, and the company should opt for a market concentration strategy. Quick and early diversification is preferred if there are sufficient customers who need a product and are willing to pay for it. The complexity of the product also holds back fast market expansion. Digital products are considered less complex than physical products and do not depend on foreign distribution networks, allowing for a faster global market entry. In the article, several combinations of factors are discussed that could be helpful in developing a global market expansion strategy for a small company. Overall, the most important thing is to achieve a balance between the risks, know ones product, and carefully study customers needs.
Reference
Zif, J. (2020). Choosing the Rate of Global Market Expansion by Entrepreneurial Firms. International Journal of Business Administration, 11(4), pp. 1320. Web.
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