0705

Problem

Why is it important to have a clearly communicated competitive advantage in a foreign market? List those given in the text.

Step-by-step solution

Show all steps

Step 1/3

The decision to penetrate a foreign market is among the most challenging of all decisions concerning new markets. A long-term commitment from management is necessary because without it, the entry into the market would fail because the competitors already present in the country in question are frequently fully focused on what is, for them, their domestic market.

Step 2/3

It is important to have a clearly communicated competitive advantage in a foreign market due to the following reasons:

• If there is a compelling incentive for people to try a product, a company will have the simplest time doing so. Cost savings are undoubtedly a strong justification.  

• When evaluating what a consumer would spend to purchase a company's product or service to the competitor offering, it is critical for the company to comprehend all customer expenses, especially import tariffs as well as VAT.

• A purchasing company will save money by using less labor or producing more via manufacturing or marketing if the technology is more cost-effective.

• Several businesses are successful due to their cachet, either from outstanding branding or from the goodwill of their place of origin.

• A further clear advantage that is simple to explain is improved quality. Each good or service's quality must be stated in the context of the consumer.

• Some buyers could associate quality with robustness, while others would believe it has to do with the finished product's aesthetic.

• Customers' perceptions of quality are the only ones that really matter.

• Environmental acceptability is the ultimate and most straightforward competitive advantage.

• Recyclability or biodegradability may be a major selling factor in the EU where environmental issues are more significant than in the US.

Step 3/3

The benefits of having a clearly expressed competitive advantage in a foreign market are as stated.