expand to foreign markets

timer Asked: Apr 1st, 2017
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Question Description

You are the CEO of a Saudi Arabian company that is seeking to expand to foreign markets and establish itself as a global powerhouse. You are aware that there a number of strategies available to you, but how do you choose?

Explain and describe one type of business that might be most successful using an export-based strategy, and one type of business that might be most successful using equity investment overseas. Explain why each business would be successful using the given strategy.

Your well-written paper should meet the following requirements:

  • 4-6 pages in length
  • Support your analysis by referencing and citing at least three credible sources in addition to the course textbook. The SEU Virtual Library is an excellent place to search for scholarly articles.
  • Use Saudi Electronic University academic writing standards and APA style guidelines, citing references as appropriate.

Tutor Answer

School: University of Virginia



Expand To Foreign Markets
Student’s Name


Expand To Foreign Markets
An export strategy is a set of guidelines that will govern an organization when it decides
to export its products or services around the world. An organization that wishes to go
international or wants to trade in the global market faces several challenges including marketing
issues where they have to identify their potential markets. They should also be aware of how
they will manage and implement their efforts in marketing. They should know how to enter the
market, whether directly or through intermediaries.
Application of Export Based Strategy
Direct exporting may be a more convenient strategy for one market while in another
market one will have to adopt and set up a joint venture. The organization should be able to
know where to source their products, whether to make the goods and buy. The organization
should also be conscious of where they will source their recourses like management, personnel
and their source of funding (Fabozzi, Focardi, &Kolm, 2010). They should also know how much
of these resources they need. The organization also needs to be aware of the particular challenges
that they may face in each market they venture into. They must understand the competition, the
cultural differences, and the import controls. The company must also strategize on how to
determine their product’s sales price. An organization seeking to export goods need to assess
their product for potential in the new market. This can be done by assessing the product in the
domestic market to see whether the product is marketable locally.
The coffee industry in Kenya has been one of the pillars of the Kenyan economy. The
industry has been a vital link to earning foreign exchange. In Kenya coffee is the third major


cash crop after tea and horticultural produce. The Kenyan coffee industry may be most
successful using an export-based strategy. This business will do well in exports from Kenya to
other parts of the world because of the good export market that exists in other parts of the world.
Having identified markets in the United States of America and the United Kingdom, the industry
in Kenya has a ready market for its products. The advancements of technology in Kenya have
allowed the coffee industry to make the increased production of their products and thus this will
help them have more profits. Technology has also helped them in marketing their products to
various parts of the globe where their market is based. The transport network in Kenya and
around the world has made it easier and more reliable for the exportation of coffee products to
various places in the world thus making the industry successful. Knowing when to market and
how to market their products will make them get a wider customer base, and thus their profits
will increase (summer, 2013). By deciding to export the products directly to the part of its
market, the industry will become successful since it will bring them closer to their customers.
In parts where they use intermediaries to market their products, they will still appear
successful because their product will reach a wide range of customers and they still do not have
to deal with the customer directly. Since the coffee industry sources its raw material locally, they
reduce their cost of production and this will make them successful in their line of business. By
understanding the different cultural differences, language barriers and demographics of their
different markets, the industry will customize their product to fit the requirements of the
consumers and this will make them succeed as they will have a large customer base that is ready
to receive their products. Also by understanding the competition, they will know which market to
invest more in and those that they don’t. By so doing, they will know where to export more
products and get more profits (Siandra, Testuri, & Universidad ORT Uruguay, 2002). By


understanding each of their markets, the industry will know how to price their products to their
customers in different regions to ensure that they do not overprice the product and risk the
product not being bought or underpriced the product and risk less revenues or even losses.
Equity investment is defined by buying and holding of shares of stock on a stock market
by firms and individuals and awaits dividends and capital gains as a form of income. Equity
investment can be a way of owning a private company. The investors gain income when the
company decided to distribute the income after liquidating the assets of the company or when
they d...

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Thanks, good work

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