Foreign Market Entry and Diversification Essay Example | Topics and Well Written Essays - 1250 words

Foreign Market Entry and Diversification - Essay Example It is also vital to note that Kinko’s Printing Company has a lot to gain in terms of strengthening its foreign base and expanding the market. The Company should also execute its diversification strategy to acquire more competitive power comparative to their main rivals. The company might also desire to adopt a diversification strategy that is either neutral to value or one that leads to the company’s devaluation. The reason behind this is to neutralize the powers of the rivals in connection to market strength or to minimize the employment risk of the managers within the company. It is vital for Kinko’s Printing Company to consider diversification based on the need to improve the compensation of the managers due to the optimistic relation amid the size of the company, compensation and diversification. A Strategy for Diversification of the Company There are various foreign market entry strategies that Kinko’s Printing Company would take into consideration. T he company would opt to have direct exports, indirect exports, contractual agreements, joint venture or having wholly owned subsidiaries in the foreign countries (Ahlstrom & Bruton, 2010). The company could also opt for licensing other businesses in the foreign nations to run a similar business or even use franchising methods. In this case the best entry mode would to have a joint venture. The main objective of this entry strategy is to distribute risk or share the available technology and to mutually conform to the regulations of the government. The joint venture would specifically concentrate on the technological sector or industry. Some of the main products that would be appropriate for the company to diversify would be 3D printing and 2D printing. The company stands to benefit various synergies such as operational and financial strategies on top of the sales synergies and management strategies. Most importantly, in regard to the operational synergies given that the company falls in the technological sector, the emphasis is found on the need to increase the competitive nature and the marketing strength of the products in the industry. There will be shared costs of operation provided there is full government support in the host nation. The Best Foreign Market for the Company The best foreign market the company should consider diversifying its operation through the joint venture would be South Africa. Doing business in South Africa is indeed favorable for technological firms given the numerous incentives provided by the state. A joint venture in South Africa is possible due to the structures laid down by the Department of Trade and Industry and the Economic Development Department and the Industrial Development Corporation (Paul & Kapoor, 2008). There are numerous government incentives inclusive of the tax breaks and grants which are easily manageable. The main objective is to encourage more private sector participation in the increase of the production capaci ty. In particular, the state incentives are majorly split into three classes: capital expenditure incentives given the desire to acquire and uplift the assets of the company with an aim to create or diversify the productive capacity of the business. Besides, the government offers development and research incentives for such companies as Kinko’s Printing Company that would enable the firm to design and improve the latest products and business processes. Last but