The Slovenia Times

What are the main obstacles when entering or doing business in a foreign market?



Revoz is a fully-owned subsidiary of the Renault Group, a global player in the automotive industry for which it manufactures the Clio II car. Renault sells these cars throughout Europe via their network of licensed dealerships, meaning that Revoz only deals indirectly with these markets. We only know when a car is being produced for a specific country or market when we are asked to make some country-specific modifications to our product. Gorenje, Franjo Bobinac, CEO: Gorenje is the biggest Slovenian net exporter and we are present in 60 countries. So it is difficult to talk about unified experiences. We have to prepare for every single market separately. One of the key points is the difference of cultures, traditions, values and habits, which significantly influences the business culture and the way we negotiate with our business partners. Our negative experience in China is mainly attributable to our lack of understanding of Chinese - we have also had similar problems in other countries. Our managers must learn the local language and be thoroughly au fait with the country where they will be located or doing business in. We are aware that we have to be present in the local market - through our own companies or representatives - in order to be successful. It is equally important to know about local economic relationships and the formal and informal ways of doing business there, so that you aren't taken by surprise by negative factors such as high inflation, non-payment, financial risk, corruption, long-term instability, disruption to supply, etc. SIJ - Slovenian Steel Group, Tibor Simonka, CEO: Problems do not exist, just specifics of markets, areas and regions - this is especially valid for EU and USA markets. It is essential to effectively market competitive products or services; to know how to target specific customers or market segments; and how to penetrate the market. Slovenian companies too often decide to enter markets indirectly through middlemen and local partners - that is easy, but not overly effective. They do not invest enough in the development of their own trade network and trademark. They don't get sufficient feedback because of that; and they are not familiar with the actual needs and plans of buyers and consumers. This approach may allow you to hold onto your current market position, but in the long term there is little scope for strengthening and building market share. Krka, Damjan Mozina, Director of Sales: The appearance of Krka on a foreign market usually starts with an analysis of the country/market and the fulfilment of regulatory requests; preconditions that often constitute the most significant obstacle to be overcome before any presence can be established in a chosen market. The biggest challenge, or obstacle, we face once we decide to enter a new market, is to form an efficient marketing model. We have to establish the demand for our products, and to meet this goal we have to invest big money into the workforce of our foreign company. It is, of course, financially risky to sell into new markets, because of political instability in the countries or unreliable buyers, but we have not had such problems within the EU. Our own financial risk management model helps us with that. Last but not least, we have to be able to compete actively with global and local competitors in every market - in terms of medical listings, prices and marketing. Mura EHM, Metka Erjavec Granov, Director of Marketing: The sales strategies used in our stores and in our franchises play a very important role in determining our level of success in foreign markets. We also have to educate those of our sales personnel who specialize in garment selling. The major problems associated with this kind of business model include getting the right partner, location and market information and to correctly position the product. The right partner must be able to efficiently manage a franchise system and be market orientated. Franchisees are often only interested in getting well established products or services. The right micro and macro location of the shop is also crucial; as is its layout and design. This is even more important for a franchise shop, because the buyer must be convinced that he/she is in a Mura shop. When you think about entering a new market you have to ensure that you gather adequate market information. The tendency is to think too much about quantitative information - sales volumes, market share, orders, market potential, etc. - at the expense of qualitative information such as consumer requirements, the role of the individual in the buying process, service and product etc. The positioning of the product in the buyers consciousness is the result of awareness, impressions and feelings. It is essential to know what the consumers' views towards the products are and to create the optimal marketing mix. Product positioning all too often falls foul of an incomplete marketing mix - usually caused by a lack of investment in market integration and communication. A marketing manager must be kept abreast of societal trends, must research the market thoroughly, must target clients more carefully than in the past and must strive for long-term relationships with all parties.


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