How to Choose the Right Market Entry Strategy for Emerging Markets

Entering an emerging market can create significant growth opportunities, but choosing the wrong market entry strategy can make expansion unnecessarily expensive, risky, or difficult to manage.

Companies can enter foreign markets through exporting, licensing, franchising, partnerships, joint ventures, acquisitions, direct investment, digital channels, or combinations of these approaches. The challenge is not simply choosing one of these options. The real challenge is matching the entry strategy with the market, the company’s capabilities, the level of control required, and the amount of risk it is prepared to accept.

Recent research on international market selection suggests that companies should not treat market selection and entry-mode decisions as completely separate steps. Instead, the attractiveness of a market and the suitability of a particular entry approach should be considered together (Francioni & Martín Martín, 2024; Zhou et al., 2025).

This article explains how businesses can evaluate their options and choose a market entry strategy that fits their circumstances, particularly when entering emerging and developing markets.

Understand What a Market Entry Strategy Involves

A market entry strategy is the approach a company uses to establish business activity in a new geographic market.

Common approaches include:

Direct or indirect exporting
Licensing
Franchising
Distribution agreements
Strategic partnerships
Joint ventures
Acquisitions
Greenfield investment
Local subsidiaries
Digital or platform-based entry

These approaches differ substantially in investment, control, risk, speed, flexibility, and dependence on local partners.

For example, exporting may allow a company to test demand without immediately establishing a local operation. A joint venture can provide access to local knowledge and relationships but requires shared decision-making. A wholly owned subsidiary can provide greater control but usually requires more resources and exposes the company to greater market-specific commitments.

This means there is no universally correct entry mode.

The appropriate strategy depends on the relationship between the market opportunity and the company’s ability to compete in that market.

Research on international market selection also shows that market selection is influenced by more than country-level economic indicators. Networks, opportunities, capabilities, institutions, and the broader international environment can all affect how companies identify and pursue foreign markets (Francioni & Martín Martín, 2024).

Evaluate the Market Before Choosing How to Enter

A company should understand the market before deciding how much to commit to it.

A useful market assessment should consider several dimensions.

Factor	Questions to consider
Market demand	Is there sufficient demand for the product or service?
Competition	Who are the major competitors and how strong are they?
Regulation	What laws, licenses, restrictions, or approvals apply?
Customers	How do customers buy, use, and evaluate products?
Distribution	How will products or services reach customers?
Infrastructure	Can the business operate effectively with available infrastructure?
Local capabilities	Are suitable employees, suppliers, partners, or distributors available?
Economic conditions	How stable are income levels, costs, currency conditions, and demand?
Institutions	How do local institutions and business rules affect operations?
Cultural environment	What language, cultural, or behavioral differences may affect the business?

The purpose is not to produce a perfect prediction of the market.

Instead, the assessment should help management understand what conditions must exist for the business model to work.

International market-selection research increasingly recognizes that firms may evaluate countries, customers, business relationships, and specific opportunities rather than relying exclusively on country rankings (Francioni & Martín Martín, 2024).

This is particularly important in emerging markets, where national averages may conceal major differences between cities, customer groups, industries, distribution channels, and institutional environments.

Choose the Market and Entry Mode Together

A traditional expansion process might look like this:

Select a country → choose an entry mode → implement the strategy

A more useful approach is:

Evaluate the market ↔ evaluate entry options ↔ assess company capabilities ↔ compare risk and commitment → choose an entry approach

This distinction matters because the same market may require different entry strategies for different companies.

For example, a large multinational with substantial capital, international management experience, and established supply-chain capabilities may consider an investment strategy that would be inappropriate for a small company entering the same market for the first time.

Recent research by Zhou et al. (2025) argues for a more dynamic approach to international market selection that considers market attractiveness together with the suitability of export and foreign direct investment entry modes.

The practical lesson is straightforward:

Do not ask only, “Is this a good market?”

Also ask:

“Is this a good market for our company, using an entry strategy we can actually manage?”

Match the Entry Strategy to Your Business

The right market entry strategy depends partly on the company itself.

Investment Capacity

Capital availability affects the level of commitment a company can reasonably make.

A business with limited international experience may prefer a lower-commitment approach such as exporting, distribution, licensing, or a digital service model.

A company with substantial financial resources may have more options, including acquisitions, joint ventures, or direct investment.

The important issue is not simply whether the company can afford an investment.

It is whether the expected opportunity justifies the level of capital committed.

Desired Level of Control

Control and commitment generally move together.

A company that wants strong control over:

pricing,
customer experience,
brand presentation,
employees,
technology,
intellectual property, or
operational standards

may need a more direct form of market presence.

However, greater control can also mean greater financial and operational responsibility.

Management should therefore determine which decisions must remain under company control and which can be delegated to partners.

International Experience

Companies with limited international experience may face difficulties interpreting unfamiliar regulations, negotiating with local organizations, managing cultural differences, and understanding customer behavior.

A lower-commitment entry approach can sometimes allow the company to learn before making a larger investment.

This idea is particularly relevant to small and medium-sized businesses, for which foreign market entry decisions can place significant pressure on limited managerial and financial resources (Alinasab et al., 2025).

Product or Service Characteristics

The product itself can influence the appropriate entry model.

For example:

A standardized physical product may be suitable for exporting.
A software product may support digital-first entry.
A professional service may initially be delivered remotely.
A franchise business may require local operating partners.
A highly regulated product may require substantial local knowledge and regulatory preparation.
A product requiring local manufacturing may eventually require deeper investment.

The entry strategy should therefore fit not only the market but also how value is delivered to customers.

Management Capabilities

International expansion requires management capabilities that may not be obvious during the planning stage.

Managers may need to handle:

cross-cultural communication,
international negotiation,
regulatory uncertainty,
local partnerships,
distributed teams,
foreign suppliers,
customer adaptation,
currency and financial issues.

Research on SME entry-mode decisions has found that characteristics and capabilities of owner-managers can influence the choice between non-equity and equity-based approaches, including the ability to operate across cultural and interpersonal differences (Mammadov & Wald, 2025).

Consider Local Knowledge and Partnerships

Local knowledge can reduce some of the information gaps that companies face when entering unfamiliar markets.

Local partners may provide knowledge about:

customers,
suppliers,
distribution,
regulations,
business relationships,
language,
cultural expectations,
industry practices.

However, “find a local partner” should not become an automatic recommendation.

The more useful question is:

What specific capability does the partner provide that the company does not currently have?

A potential partner may provide distribution access but have little experience with the company’s target customers. Another may have strong relationships but limited operational capabilities.

Partnership decisions should therefore be evaluated according to capabilities, incentives, responsibilities, governance, and strategic fit.

Research on SME foreign market selection and entry suggests that collaboration and business relationships can play an important role in international expansion, particularly under conditions of uncertainty (Chetty et al., 2024).

Applying the Framework to Myanmar

The same market-entry principles can be applied when a company is considering Myanmar, but Myanmar should be evaluated as a specific market rather than treated simply as a generic emerging-market example.

A company considering Myanmar may need to examine regulatory requirements, local business capabilities, customer behavior, distribution, language, partnerships, and the appropriate level of investment before selecting an entry mode.

For companies planning to establish a local entity, Myanmar Companies Online (MyCO) provides online company registration and access to registered-company information. Current MyCO guidance identifies information such as company name, contact details, directors, secretary information where applicable, and identification documents for registration.

Investment requirements also need to be assessed separately from basic company registration. DICA currently states that most projects no longer require Myanmar Investment Commission approval, while certain projects—including those considered strategic, involving large capital investments, having potentially significant environmental or community impacts, using state-owned land, or designated by the government—continue to require an MIC permit.

For international companies, localization can also influence market-entry decisions. This may involve adapting Burmese-language customer communication, product information, websites, marketing materials, support processes, and other customer-facing content rather than simply translating a global product.

The key point is not that every company entering Myanmar should use the same entry model. It is that the market-entry framework should be applied to Myanmar-specific conditions before deciding the appropriate level of commitment.

Consider Digital and Staged Entry

Digital channels can allow some companies to enter foreign markets without immediately establishing a substantial physical presence.

Depending on the business model, companies may test a market through:

Localized websites
E-commerce
Online marketplaces
Digital advertising
Social media
SaaS products
Remote professional services
Online education
Digital content
Cross-border customer acquisition

This approach can be particularly useful when the product or service can be delivered digitally.

However, digital entry should not be confused with automatic low risk.

Companies still need to consider customer acquisition costs, payment systems, regulation, data requirements, customer support, competition, localization, and the ability to deliver the promised value.

For small firms operating under uncertainty, recent research supports combining structured evaluation with flexible decision-making and the ability to reassess entry choices as conditions change (Alinasab et al., 2025).

A practical staged approach could be:

Market research → Localized digital presence → Limited customer test → Performance measurement → Adaptation → Larger commitment

This allows the company to learn before committing substantial resources.

Avoid Common Market Entry Mistakes

Choosing a Market Based Only on Size

A large population or rapidly growing economy does not automatically mean that a particular company will succeed there.

Market size should be considered alongside purchasing power, customer demand, competition, accessibility, regulation, and the company’s ability to compete.

Selecting an Entry Mode Too Early

Companies sometimes decide that they want a distributor, joint venture, subsidiary, or acquisition before properly understanding the market.

The sequence should be reversed.

First understand the strategic requirements. Then determine which entry approach can satisfy them.

Copying the Home-Market Model

A successful business model in one country may not work in another.

Differences in:

customer expectations,
purchasing behavior,
language,
regulations,
infrastructure,
distribution,
pricing,
competition

can require meaningful adaptation.

International expansion should therefore distinguish between what is strategically essential and what can be adapted locally.

Underestimating Local Relationships

Formal market research provides important information, but it may not reveal every practical issue involved in operating locally.

Customers, distributors, suppliers, professional networks, regulators, and other stakeholders can provide information that is difficult to obtain from secondary research alone.

This does not mean that relationships should replace analysis.

The stronger approach is to combine market evidence with relevant local knowledge.

Making a Large Commitment Too Soon

Entering a new market with a major investment before validating assumptions can increase downside exposure.

A staged approach can provide opportunities to learn:

Enter → Learn → Measure → Adapt → Decide

If evidence improves, the company can increase commitment.

If evidence does not support expansion, the company can reconsider before committing substantially more resources.

Build a Practical Market Entry Decision Process

A practical decision process can be organized into six steps.

Step 1: Define the Strategic Objective

Determine why the company wants to enter the market.

Possible objectives include:

increasing sales,
accessing new customers,
following existing customers,
accessing resources,
building a long-term presence,
reducing dependence on existing markets,
developing strategic capabilities.

The objective affects the appropriate entry strategy.

Step 2: Assess the Market

Evaluate:

demand,
competition,
regulation,
customers,
infrastructure,
distribution,
institutions,
local capabilities,
cultural factors,
economic conditions.

Separate facts from assumptions.

Step 3: Assess Company Capabilities

Ask:

How much capital can we commit?
How much international experience do we have?
What capabilities can we transfer?
What capabilities do we lack?
How much management attention can we provide?
What level of uncertainty can we manage?

Step 4: Compare Entry Options

Compare potential approaches according to:

Criterion	Key question
Investment	How much capital is required?
Control	How much control does the company need?
Risk	What could the company lose?
Flexibility	How easily can the company change direction?
Speed	How quickly can the company enter?
Local knowledge	How much local expertise is available?
Complexity	How difficult is the model to manage?
Scalability	Can the model support future growth?

There is no need to force every factor into a single numerical score.

The purpose is to make the trade-offs visible.

Step 5: Start With an Appropriate Level of Commitment

If uncertainty is high, consider whether the company can test its assumptions before making a larger commitment.

This might involve:

exporting,
a pilot project,
a distributor,
a local partner,
a digital launch,
a limited product range,
a small customer segment.

The appropriate starting point depends on the economics and requirements of the business.

Step 6: Define Conditions for Expansion

Before entering, establish what evidence would justify greater investment.

For example:

customer acquisition targets,
repeat purchase rates,
revenue targets,
distributor performance,
regulatory milestones,
customer satisfaction,
operational reliability,
acceptable cost levels.

This turns market entry into a learning process rather than a one-time decision.

Key Takeaways

Market selection and entry-mode selection should be considered together.
The right entry strategy depends on both market conditions and company capabilities.
Investment, control, risk, flexibility, speed, and local knowledge should be evaluated together.
Emerging markets require attention to institutions, networks, customer behavior, infrastructure, and local operating conditions.
Partnerships can provide valuable capabilities, but they should be selected for strategic reasons rather than simply because they are local.
Digital and staged approaches can allow some businesses to test demand before making larger commitments.
Myanmar is one example where international companies should combine general market-entry principles with Myanmar-specific regulatory, customer, language, and operating research.
The best strategy is not necessarily the one that creates the largest initial presence. It is the one that fits the company’s objectives, resources, capabilities, and ability to learn.

Conclusion

Choosing a market entry strategy is ultimately a question of strategic fit.

A company must understand the market it wants to enter, but it must also understand itself. Capital, capabilities, international experience, management resources, desired control, product characteristics, and tolerance for uncertainty all influence the appropriate entry approach.

Recent research also suggests that international expansion should not be treated as a rigid sequence in which companies select a country first and decide how to enter later. Market attractiveness and entry-mode suitability can influence each other, particularly when international conditions are uncertain or changing (Francioni & Martín Martín, 2024; Zhou et al., 2025).

For companies entering emerging markets, a practical decision therefore comes down to five questions:

Is the market attractive for our specific business?
What will it take to compete successfully there?
Which entry approach fits our capabilities and objectives?
How much commitment should we make at this stage?
What evidence would justify increasing, changing, or reducing that commitment?

A disciplined market-entry strategy does not eliminate uncertainty. It gives the company a structured way to understand that uncertainty, manage its commitment, learn from the market, and adapt as evidence changes.

References

Alinasab, J., Khvatova, T., Caputo, F., & Mirahmadi, S. M. R. (2025). Small firms’ foreign market entry framework: Rational and cognitive perspectives. International Marketing Review, 42(2–3), 386–411. doi:10.1108/IMR-08-2023-0204

Chetty, S., Martín Martín, O., & Bai, W. (2024). Causal foreign market selection and effectual entry decision-making: The mediating role of collaboration to enhance international performance. Journal of Business Research, 172, 114385. doi:10.1016/j.jbusres.2023.114385

Francioni, B., & Martín Martín, O. (2024). International market, network, and opportunity selection: A systematic review of empirical research, integrative framework, and comprehensive research agenda. Journal of International Management, 30(5), 101174. doi:10.1016/j.intman.2024.101174

Mammadov, A., & Wald, A. (2025). The role of SME owner-managers’ leadership self-efficacy, cultural intelligence and emotional intelligence in foreign market entry mode. International Business Review, 34(5), 102482. doi:10.1016/j.ibusrev.2025.102482

Zhou, Y., Gomes, E., & Vendrell-Herrero, F. (2025). Optimizing international market selection: A dynamic approach integrating export and FDI entry modes. Thunderbird International Business Review, 67(6), 739–755. doi:10.1002/tie.70007