The purpose of this paper is to present the application of the PSE model (perceived barriers to market entry; strategy competence; entry strategy) for market entry.
The PSE model is presented and illustrated by Ericsson's entry into the mobile systems market in the USA. Advice on the application of the model is presented.
The case shows key lessons in entering an international market: the barriers as regards the necessity of adapting the technology to local standards, and the necessity of customer acceptance were perceived as particularly high; there was a high degree of relatedness with Ericsson's core competence, and substantial market experience was gained; and Ericsson preferred organic entry modes regarding its core products such as mobile telephony systems.
The lessons may be subject to tests in broader studies.
In applying the PSE model, management would be advised to choose entry strategy and pay attention to entry barriers, business relatedness, and market experience.
The article turns a theoretical model into advice that is valuable for companies when they formulate international strategies. The case shows a practical model application.
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