As of 2012 we will only publish once every quarter. Our next article will appear in March 2012.
The team would like to wish you Happy Holidays.
We sincerely thank our clients, partners and subscribers for their collaboration and support.
Sunday, December 25, 2011
Monday, November 28, 2011
Tuesday, October 25, 2011
Wednesday, September 28, 2011
Monday, August 22, 2011
Thursday, July 28, 2011
Thursday, June 30, 2011
Sunday, May 29, 2011
Wednesday, April 27, 2011
Thursday, March 31, 2011
Thursday, February 24, 2011
Timing Of Entry Into Foreign Markets
Carnot Sylvestre, MS
When companies desire to introduce new products into foreign markets, they must address the issue of timing of entry. Indeed they have to carefully research their markets to determine if their products will actually serve the needs of consumers, that they will be adopted in a reasonable of amount time and that conditions in the prospective markets are favorable for the products to be introduced.
Timing of entry is very important as it will directly affect the outcome of a company’s ventures in a foreign market. Launched products, specially those in a new category, which are adopted at an early stage will reap considerable advantages for the companies that introduced them, while competing products that follow will find more difficulties in getting acceptance. Once consumers adopt and gain familiarity with a company’s product that complements their lifestyle, they tend to be loyal to the brand and cannot easily be persuaded to switch their allegiance to other competing products. Managers should diligently research their foreign markets and decide on a timing of entry for their companies either as first movers, early followers or late entrants.
Companies considered as first movers are pioneers in introducing new products or services. They tend to benefit from brand loyalty and technological leadership and often capture a dominant share of their markets. Their early entry allows them to acquire preferable locations and distribution channels as well as establish valuable relationships with key partners. Their managers must however be aware of the high costs associated with being first movers such as R&D, marketing, etc...Companies must also be willing to be patient and dedicate necessary resources to facilitate adoption of their products by consumers. Studies show that companies that are first movers typically have a high rate of failure but that should not deter first movers that have done adequate research from anticipating trends in the marketplace and generating creative products that will satisfy the needs of consumers. Ultimately, first movers with a sound marketing plan and innovative products tend to reap the benefits of brand loyalty on the part of consumers.
Early followers are those companies that are early to enter markets but are not first; they are often referred to as early leaders. Opinions vary as to whether it is better for companies to be first movers or early followers. Some studies have shown that first movers tend to have higher returns and survival rates while others suggest that first movers tend to be first to fail leaving the markets to the benefits of early followers.
Late entrants are those companies that choose to wait to enter markets until products similar to theirs begin to penetrate markets on a large scale. While these companies find it less costly to enter markets because they don’t have to incur the huge expenses associated with R&D and marketing, quite often they find that the markets are already saturated and that they have to aggressively compete to establish their brands and grab market share.
The choice for a timing of entry is quite complex and depends on a number of factors that vary from markets to markets. Companies must look at the stage of development of supplier networks, distribution channels, level of technological maturity, availability and access to complementary resources in each market before making a decision to become first movers, early followers or late entrants. Ultimately companies must remember that they are in business to make money; they must make sure that the profit margins they might obtain from a particular foreign market are not only worth their efforts but that they also far outweigh the costs and risks associated with their ventures.
When companies desire to introduce new products into foreign markets, they must address the issue of timing of entry. Indeed they have to carefully research their markets to determine if their products will actually serve the needs of consumers, that they will be adopted in a reasonable of amount time and that conditions in the prospective markets are favorable for the products to be introduced.
Timing of entry is very important as it will directly affect the outcome of a company’s ventures in a foreign market. Launched products, specially those in a new category, which are adopted at an early stage will reap considerable advantages for the companies that introduced them, while competing products that follow will find more difficulties in getting acceptance. Once consumers adopt and gain familiarity with a company’s product that complements their lifestyle, they tend to be loyal to the brand and cannot easily be persuaded to switch their allegiance to other competing products. Managers should diligently research their foreign markets and decide on a timing of entry for their companies either as first movers, early followers or late entrants.
Companies considered as first movers are pioneers in introducing new products or services. They tend to benefit from brand loyalty and technological leadership and often capture a dominant share of their markets. Their early entry allows them to acquire preferable locations and distribution channels as well as establish valuable relationships with key partners. Their managers must however be aware of the high costs associated with being first movers such as R&D, marketing, etc...Companies must also be willing to be patient and dedicate necessary resources to facilitate adoption of their products by consumers. Studies show that companies that are first movers typically have a high rate of failure but that should not deter first movers that have done adequate research from anticipating trends in the marketplace and generating creative products that will satisfy the needs of consumers. Ultimately, first movers with a sound marketing plan and innovative products tend to reap the benefits of brand loyalty on the part of consumers.
Early followers are those companies that are early to enter markets but are not first; they are often referred to as early leaders. Opinions vary as to whether it is better for companies to be first movers or early followers. Some studies have shown that first movers tend to have higher returns and survival rates while others suggest that first movers tend to be first to fail leaving the markets to the benefits of early followers.
Late entrants are those companies that choose to wait to enter markets until products similar to theirs begin to penetrate markets on a large scale. While these companies find it less costly to enter markets because they don’t have to incur the huge expenses associated with R&D and marketing, quite often they find that the markets are already saturated and that they have to aggressively compete to establish their brands and grab market share.
The choice for a timing of entry is quite complex and depends on a number of factors that vary from markets to markets. Companies must look at the stage of development of supplier networks, distribution channels, level of technological maturity, availability and access to complementary resources in each market before making a decision to become first movers, early followers or late entrants. Ultimately companies must remember that they are in business to make money; they must make sure that the profit margins they might obtain from a particular foreign market are not only worth their efforts but that they also far outweigh the costs and risks associated with their ventures.
Monday, January 24, 2011
Increase in US Exports Will Create Jobs And Reduce Trade Deficit
Carnot Sylvestre, MS
The consensus around Washington these days is that job creation should be one of the top priorities of the Obama administration and the US Congress. The question remains whether our politicians will have the courage to put partisan interests aside and focus on real issues that will bring about meaningful and sustainable jobs for Americans.
Two of those issues are limited US exports and China’s refusal to submit the Yuan to the rules of free market.
The first issue, limited US exports, is quite obvious: US companies are not exporting enough goods to foreign markets. The government must create an environment that allows American businesses to produce more domestically and export more than they have been in recent years. We simply cannot continue to extend generous tax incentives to companies and see them turn around to downsize or shut down their US-based production facilities and move them abroad.
If the administration and congress are serious about creating jobs for Americans, they should adopt policies that encourage US companies to produce their goods nationally using materials and labor available right here in the United States to the maximum extent possible. US companies also must face their responsibilities; they should make the focus of their R&D activities to develop innovative and environmentally friendly products of great quality that can not only satisfy domestic demand but also compete in international markets. They must resist the temptation to accept tax incentives from communities across the country and downsize or move their operations to foreign countries where labor is cheaper.
American consumers must also assume their responsibilities. They must be vigilant and pay close attention to those companies that are not living up to the commitments they made to their communities. They must also resist their urge to over consume cheap goods imported from countries that refuse to open their markets to US-made products.
The second issue, US-China trade relations, is more complex and requires real determination on the part of the Obama administration and the US Congress. For over 25 years, the US trade deficit with China has grown exponentially and will continue to worsen if our politicians don’t recognize the fact that the national security of the United States is at stake and take measures to start reversing the trend.
In 2010, the US bought $334.14 billion worth of goods from China while the Chinese only bought $81.76 billion of our goods; the year before we imported $296.38 billion of goods from the Chinese while they only bought for $69.5 billion from us. In fact, the US has been trading at a deficit with China since 1985. This situation cannot be allowed to go on.
Washington must apply pressure on China to adopt rules of free market, eliminate barriers to entry of US goods and stop to artificially lowering the value of the Yuan. During his high profile to the White House last week, Chinese president Hu Jintao announced a $45 billion deal for US businesses, this is only a drop in the bucket and does not even represent 20 percent of the deficit the US accumulated with China in 2010 alone. While our leaders should not be expected to suddenly become protectionists, they must make it clear to China that it takes two to tango. If we open our markets to China, the Chinese leaders should also open their country’s markets to US goods.
It is hard to expect other trading partners to abide by rules of free market when China is allowed to disregard them with no consequences. When China was allowed into the WTO on December 11, 2001, its leaders committed to make necessary reforms specifically in the areas of human rights and economic policies. To date, they have made little progress in those regards. Dissidents are still being persecuted, violation of copyright is tolerated, unreasonable tariffs on US goods are still in place, and the Yuan continues to be manipulated.
The United States’ competitiveness and its national security are at stake. In his State of the Union address tomorrow, President Obama intends to convince the nation that his administration will focus its efforts into job creation; he would also be wise to urge Congress to work with him to exert pressure to force China to start abiding by their WTO obligations.
The consensus around Washington these days is that job creation should be one of the top priorities of the Obama administration and the US Congress. The question remains whether our politicians will have the courage to put partisan interests aside and focus on real issues that will bring about meaningful and sustainable jobs for Americans.
Two of those issues are limited US exports and China’s refusal to submit the Yuan to the rules of free market.
The first issue, limited US exports, is quite obvious: US companies are not exporting enough goods to foreign markets. The government must create an environment that allows American businesses to produce more domestically and export more than they have been in recent years. We simply cannot continue to extend generous tax incentives to companies and see them turn around to downsize or shut down their US-based production facilities and move them abroad.
If the administration and congress are serious about creating jobs for Americans, they should adopt policies that encourage US companies to produce their goods nationally using materials and labor available right here in the United States to the maximum extent possible. US companies also must face their responsibilities; they should make the focus of their R&D activities to develop innovative and environmentally friendly products of great quality that can not only satisfy domestic demand but also compete in international markets. They must resist the temptation to accept tax incentives from communities across the country and downsize or move their operations to foreign countries where labor is cheaper.
American consumers must also assume their responsibilities. They must be vigilant and pay close attention to those companies that are not living up to the commitments they made to their communities. They must also resist their urge to over consume cheap goods imported from countries that refuse to open their markets to US-made products.
The second issue, US-China trade relations, is more complex and requires real determination on the part of the Obama administration and the US Congress. For over 25 years, the US trade deficit with China has grown exponentially and will continue to worsen if our politicians don’t recognize the fact that the national security of the United States is at stake and take measures to start reversing the trend.
In 2010, the US bought $334.14 billion worth of goods from China while the Chinese only bought $81.76 billion of our goods; the year before we imported $296.38 billion of goods from the Chinese while they only bought for $69.5 billion from us. In fact, the US has been trading at a deficit with China since 1985. This situation cannot be allowed to go on.
Washington must apply pressure on China to adopt rules of free market, eliminate barriers to entry of US goods and stop to artificially lowering the value of the Yuan. During his high profile to the White House last week, Chinese president Hu Jintao announced a $45 billion deal for US businesses, this is only a drop in the bucket and does not even represent 20 percent of the deficit the US accumulated with China in 2010 alone. While our leaders should not be expected to suddenly become protectionists, they must make it clear to China that it takes two to tango. If we open our markets to China, the Chinese leaders should also open their country’s markets to US goods.
It is hard to expect other trading partners to abide by rules of free market when China is allowed to disregard them with no consequences. When China was allowed into the WTO on December 11, 2001, its leaders committed to make necessary reforms specifically in the areas of human rights and economic policies. To date, they have made little progress in those regards. Dissidents are still being persecuted, violation of copyright is tolerated, unreasonable tariffs on US goods are still in place, and the Yuan continues to be manipulated.
The United States’ competitiveness and its national security are at stake. In his State of the Union address tomorrow, President Obama intends to convince the nation that his administration will focus its efforts into job creation; he would also be wise to urge Congress to work with him to exert pressure to force China to start abiding by their WTO obligations.
Subscribe to:
Comments (Atom)