Strategic methods of entry
While entering a new market, the company should take the guidance of a market expert and should prepare suitable strategies through knowledge and insight into the UK market. Bharti Airtel should consider the current, up-to-date data for analyzing the market specifics such as consumer trends, brand positioning of the competitors, pricing of the products, and performance of the products in the market (Elsahn and Benson-Rea, 2018). Through the analysis of all these factors, the company can identify the gap that is present in its current operations and take necessary measures to make it stand out from its competitors and appeal to the new buyers.
The first step to enter the UK market can be through the development of brand awareness among the consumers’ accounts. This will be useful in situations when the company would try to approach wholesalers and retailers by creating a successful track record in front of them (Jensen and Zámborský, 2018). Due to the impact of Brexit, business regulations have become quite stringent in the UK market. As a result, the company might face issues while conducting business directly in the UK market. Under such circumstances, the company can apply indirect methods of entering the UK market. These methods can be stated as follows.
Piggybacking – This can be one of the essential methods of entering an international arena. Through this strategy, Bharti Airtel can sell its products to the large domestic firms in India, who are directly involved in selling these products to the UK market. These large firms should have good connections with the foreign markets like UK markets for selling the products in those markets (Singh et al. 2017). This can be the right way of selling the products in foreign markets without the involvement of higher risks or costs in the process. Essentially, this strategy helps the company to avoid the stringent business regulations that are prevalent in the UK market.
Turnkey Projects – This can be another suitable method for the company to enter the UK market. Through Turnkey projects, the company can get consulting services related to the environment, architecture, construction as well as engineering from another company, which is based in the UK (Bouwman et al. 2018). This strategy operates under the process that the facility is built from the ground up, and the plant becomes functional after the key is turned on. This is a perfect way of entering any foreign market, including the UK market. This is because these projects are mostly financed by an international agency such as the World Bank. As a result, the risk of having a default is either minimal or nil.
Buying a Company – Bharti Airtel is not a new entrant to its home market and has several businesses in other countries. The company has a renowned brand presence in several markets and has already earned considerable revenue from its operations (Rahman et al. 2017). Therefore, it can easily acquire or buy a small local company in the UK. This method can be pretty costly as compared to other methods. However, through this strategy, the company can be acquainted with the local market knowledge and existing customer bases of the UK market.
Problems of entering a new market
The company can face many barriers while making an entry into the new market. Some of the obstacles can be increased costs due to exposure to an unexplored business environment and also due to existing business operations. Sometimes, due to the prohibition of marketing services and underdevelopment of banking systems, some of the payment mechanisms may not be available. Due to this reason, it might be tough for companies to obtain a reliable letter of credit. Some of the other barriers, which might provide hindrances to the process of entering the UK market, can be described below.
- Presence of Monopolies – It has been observed that the UK market consists of specific mobile service providers, which can be treated as monopolies of the market (Florek and Jakubczak, 2018).These monopolies might block entry of new competitors to the UK market through the usage of patents and licenses, such that they can be free from any rivalry. This blockage is created through control of distribution channels, resources, or suppliers or by using different kinds of pricing strategies.
- Legal protection – The UK market has stringent regulations and mechanisms for new businesses to enter the market. These regulations provide inadequate legal protection to the companies entering the UK market (Pattnaik et al. 2018). The Company would be unable to protect its intellectual property rights, which are the copyrights, patents, and trademarks, due to which it might suffer losses in the market. UK government might take legal actions against commercial disputes, which might indirectly affect the company.
Recommendations
Bharti Airtel can adopt many ways of overcoming the barriers of monopoly and legal protection in the UK market. The company can initiate its business with minimum viable service and can offer that service to the customers of the market. The company can carry out iterations of the same service and wait for the feedback of the customers (Chen et al. 2016). If the feedbacks are positive, the company can progress with its business operations; otherwise, it might stop its services and leave the market. Another meaningful way of overcoming entry barriers can be the application of a disruptive pricing model. Through this model, the company can offer a unique price to the customers with attractive deals and offers such that the services can be appealing to them.
Another essential way of making a presence in the target market by standing out from the existing competitors can be providing excellent services to the customers, which will outpace its prices. In this way, the services can be less price sensitive to the customers. The customers would enjoy more enormous benefits at low rates initially, and after the company has earned a more significant customer base, it can gradually increase its price structure. Another meaningful way of attracting customers can be through leveraging an existing brand such that the risk can be balanced. This strategy is entirely based on the principle of economy of scope.