[MUSIC] In this video we discuss timing strategies for entering foreign markets. Recall that there are three fundamental entry decisions. Entry timing, when to enter, country selection, where to enter, and entry mode how to enter. In this video we will focus on entry timing. There are three primary entry timing strategies, first-mover entry, fast-follower entry, and late market entry, we will discuss each of this. First up is first-mover entry. The advantages of first-mover entry are, a first-mover will be first to market by definition. A first-mover can anchor product expectations in the minds of customers, and can skim early and urgent adopters to grab market share. A first-mover can set technological standards to build early brand loyalty and to create barriers to entry. And finally it will over enhance its overall reputation in his target market. Being a first mover is not without its challenges. A first mover may be unfamiliar with the foreign market, culture and its language, there may be high development costs. A first mover must inform the foreign market about an unfamiliar new product. It must adapt the product to local markets, perhaps in unanticipated ways, and it will need to identify and build new distribution channels. The risk of failure is a distinct possibility if customers are not interested, or if the product design is flawed. Local competitors may adapt quickly to counter a new foreign entrant. And finally, local and foreign competitors will learn from your mistakes without cost organizational investment. A second entry timing strategy is to be a fast follower, that quickly enters a foreign country once the first mover proves out and establishes a viable market. The advantages of second movers include learning from the mistakes of the early entrant, lower development costs, and lower marketing costs. In addition, customers are already familiar with a product or service and do not need to be educated. A fast follower may have time to develop a superior product or service offering. They may have time to identify new underserved market niches. And overall a fast follower has fewer risks and less uncertainty. Some of the disadvantages of fast followers are that the product or service is identified with a first mover, making it difficult for the fast follower to gain attention. The first mover has set product design perceptions, and may make alternative designs difficult for the market to accept. Distribution channels may be unavailable due to commitments to the first mover, beneath the surface technical standards may already be set making it difficult for the fast follower to change standards. Early adopters may already have be skimmed by the first mover, and with the success of the first mover other local and foreign competitors may be attracted to the market crowding out the fast follower. And finally a fast follower must present compelling reasons for customers to switch. The challenge of fast followers is to be fast to market, but not too fast. If too fast, there is little time for learning from the first mover and assessing the emerging market. If too slow, the market is defined and the first mover is entrenched and competition is swarming. Here timing is everything. The third entry timing strategy is to wait until a market matures and it's well defined. Advantages of this late entry strategy, are that the market is well developed by definition. Customers are familiar and comfortable with a product or service. The late entrant may be able to better identify underserved niches to serve, or may be able to exploit an international brand for competitive advantage. And the late entrant may have a global supply chain that provides competitive cost or service advantages. And finally a late entrant may be have deep financial resources and can buy into the market, by acquiring the successful first mover, or by rolling up smaller competitors. The late entrant is of course not without its disadvantages. The market may be crowded with competitors, customer buying habits and product expectations are fixed. A successful late entrant will need compelling reasons for customers to switch such as better product or service features, greater flexibility with designer delivery, attractive new distribution channels, higher quality, lower costs, convenience, much better marketing and positioning. Something, anything trying to compete with a new me too product is unlikely to be successful. Summarizing, there are three for an entry timing strategies. First mover entry, fast follower entry, and late market entry, each with advantages and disadvantages. Choice of entry timing will depend upon the size of the entering company, its prior international experience, and clever entry strategy and tactics, plus diligent country resource. In the next sequence of videos, we will address this last point with a discussion of country assessment and selection. Stay tuned and see you soon. [MUSIC]
