Implementing Strategy: Advantages and Disadvantages of Market Entry

This report examines market entry strategies in international business, focusing on the advantages and disadvantages of entering developed and emerging markets. It explores key concepts such as offshoring, next-shoring, strategic alliances, export loans, and e-commerce, along with the roles of SMEs and multinational companies. The report includes a glossary of terms and references a recent press release discussing the influx of international companies into Saudi Arabia, highlighting the potential challenges related to cross-cultural differences. The analysis considers the impact of these market entries on various sectors, such as value-added manufacturing and tourism, and discusses the initiatives planned to facilitate a smooth transition for these companies. The report utilizes references from academic literature and business news sources to support its findings and provide a comprehensive overview of the subject.

The primary idea of the chapter and the advantages and disadvantages of entering in a
developed market and developing markets.
Chapter seven under the title of “Implementing Strategy” discusses the important aspects of the
proliferation of SMEs and other endeavors pertaining to the emerging economies in an
international environment. Off-Shoring and Next-Shoring can be considered as the keywords to
explain the advantages and disadvantages of trading in developed or emerging markets. When a
player from the emerging market enters in a developed market with the help of Next-shoring, it
can reap the profits by getting economic deals because of the mass production of the goods.
Developed economies can take resort in the process of off-shoring in the search of cheaper
labors. SME’s and small Businesses can take advantage of the export loans and other
encouragement policies of the government sector to meet out the entry barriers (Deresky, 1994).
The formation of a “strategic Alliance is another way of ensuring the profitable functioning of
these businesses.”
Glossary from the Chapter
Joint venture: A joint venture is a strategic alliance between the two or more companies where
they float a new business entity while securing equity for sharing investment, loss, and profits.
Non-equity strategic alliance: Non-equity strategic alliances are the alliances where two or
more companies sign an agreement to float their resources together for particular functions or
operations.

Cross Border Alliances: The alliances done with an intention to meet out the international
legislations and tax formalities are known as cross border alliances where an international player
joins hand with a local party.
Off-Shoring: The process of outsourcing operations to a different country is called offshoring.
Next-Shoring: The delivery of the prepared goods from a developed economy into the emerging
economy is called next-Shoring.
Export Loans: Loans given by the emerging economies to the independent players with an
intention to invest in the international business arena for increasing the import are known as
export loans.
E-Commerce: Buying and selling of the goods with the help of internet fund transfer protocols
are known as E-Commerce. Under this protocol, the companies utilize internet protocols that are
equivalent to the off-line arrangements of completing trade functions.
Global Supply Chain: A dynamic chain of the partners sharing information, people and
resources from across the world to create a single good or service, either for a country or for
global supply.
Multinational Companies: Companies that have an independent base in multiple countries to
sell products and purchase the goods.
Cultural Differences: The difference in the mannerisms, high text or low text behavior patterns,
trade-related practices between two different countries or the communities are known as cultural
differences.

News from the arena of international business
According to a recent press release, trade authorities of the UAE are expecting more than 1000
international companies to make an entry in Saudi Arabia. In order to substantiate this scenario,
the company presented the data of 2019 when more than 1000 companies initiated the process of
setting headquarters in the UAE (Martin, 2020).
More than 183 sectors of the UAE economy will feel the impact of these new entrants in the
market. Players in the sector of “value-added manufacturing” and “Tourism” are showing a keen
interest in UAE.
One of the biggest challenges that these multinational companies may feel is related to the cross-
cultural differences between “East and West”, Saudi Authorities are planning to come up with
strong programs to fill in this gap and ensure a smooth pathway for the companies (Omarikar,
2020).

References
Deresky, H. (1994). International Management: Managing Across Borders and Cultures . New York :
Goodreads.
Martin, M. (2020). Britain, China Lead Way in New Saudi Business Licenses. Bloomberg ,
https://www.bloomberg.com/news/articles/2019-04-28/saudis-issue-70-more-foreign-business-
licenses-from-year-ago.
Omarikar, I. (2020). Saudi Arabia registers 54% increase in new international companies in 2019.
Emirates 24x7, https://www.emirates247.com/news/region/saudi-arabia-registers-54-increase-
in-new-international-companies-in-2019-2020-01-20-1.691576.