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Article
Publication date: 30 March 2020

Changhyun Park

The purpose of this study is to explore market entry strategies in a high-tech successive generations (HTSGs) market, by investigating entry mode via entry timing and path…

Abstract

Purpose

The purpose of this study is to explore market entry strategies in a high-tech successive generations (HTSGs) market, by investigating entry mode via entry timing and path differentiation and the performance outcomes of entry mode.

Design/methodology/approach

The methodology of building a theory from a longitudinal case study is adopted by using useful cases in a HTSGs market after constructing an integrated research framework to explore market entry mode. Different entry modes were investigated by studying entry timing and migration path of three firms’ case in logic semiconductor market. In addition, performance outcomes of different entry modes were measured and correlated with each other.

Findings

The results identified three major entry modes suitable for a HTSGs market. The three firms differentiated their entry modes by exploiting different entry timings from the earliest to the last and different migration paths including switching, leapfrogging and new entrance path to enter a market. First mover advantage also exists in a HTSGs market, and it was found uniquely that the financial performance denoted by entry mode outcomes was correlated with technological knowledge.

Research limitations/implications

This study extends the theory of extant entry strategy from general consumer or industrial market to HTSGs market, in which intense competition exits and technological innovation is important. Moreover, this study verified that the causality between early entry and positive performance was also effective in HTSGs market with a shorter duration of early entry advantage.

Practical implications

This study has managerial implications for firms to establish market entry strategy in HTSGs market and other markets. To become a product leader, a fast follower or a late follower, firms can differentiate their entry mode by adjusting the entry timing and migration path in the context of market and technology.

Originality/value

This study examined market entry strategies suitable for HTSGs market based on its unique characteristics and extended relevant theory into HTSGs market. Further, an integrated research framework, which explores the market entry mode, was constructed to facilitate further exploration of entry mode into other markets.

Details

Journal of Business & Industrial Marketing, vol. 35 no. 11
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 9 April 2018

Irina Surdu, Kamel Mellahi and Keith Glaister

The purpose of this paper is to examine the theories used to study the international equity-based entry mode strategies of emerging market multinationals (EMMs) and the…

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3778

Abstract

Purpose

The purpose of this paper is to examine the theories used to study the international equity-based entry mode strategies of emerging market multinationals (EMMs) and the contribution of these studies to extant literature.

Design/methodology/approach

The authors conducted a systematic review of the literature. A total of 73 articles were identified from key management, international business and international marketing journals published between 2000 and June 2015. Articles were analysed according to the theory(ies) used, thematic area, methodology, home/host countries studied and findings.

Findings

Despite the great interest around the topic of how the antecedents and outcomes of EMMs’ international entry mode strategies may challenge and amend existing theories, the findings that come out of this research mirror patterns observed in the entry mode literature in general. Whilst traditional perspectives such as internalisation theory and the OLI paradigm remain prevalent, a growing number of studies draw on institutional theory and combine multiple theoretical perspectives. Newer theories developed specifically to study EMMs (e.g., the springboard perspective) are used in only five studies and challenged to differentiate their theoretical underpinnings from extant literature. Overall, the theoretical contribution of EMM studies is simply a change in emphasis from the role of firm-specific factors towards the influence of home country institutions on entry mode strategies. The authors conclude that the literature has only made tweaks at the edge of theories with no significant changes to extant theorisations.

Originality/value

This is the first systematic review of the literature focusing specifically on the international equity-based entry mode strategies of EMMs.

Details

International Marketing Review, vol. 35 no. 2
Type: Research Article
ISSN: 0265-1335

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Article
Publication date: 2 February 2015

Johanna Franziska Gollnhofer and Ekaterina Turkina

The purpose of this paper is to take a strategic perspective on how MNEs in the retail sector decide to enter a new market. Drawing on transaction cost theory, the…

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10163

Abstract

Purpose

The purpose of this paper is to take a strategic perspective on how MNEs in the retail sector decide to enter a new market. Drawing on transaction cost theory, the contingency approach and resource-based theory, the implications of the interplay between global strategy, cultural distance and entry mode strategies are examined by means of an analysis of Carrefour’s global expansion.

Design/methodology/approach

To account for the shortcomings of prior research, a hypothesis in the relationship between entry modes and cultural distance is tested empirically using a sample of 44 foreign market entries by Carrefour over the 40 last years. The paper uses a quantitative approach, i.e., logistic regressions. To measure cultural distance, the authors rely on the GLOBE dimensions and the Kogut-Singh Index.

Findings

The findings suggest a positive relationship between a resource commitment, entry mode strategy and cultural distance for Carrefour. However, these findings are contrary to the mainstream argument that high cultural distance is related to entry strategies based on relatively low resource commitment. The authors explain these findings by integrating a cultural distance perspective with Carrefour’s overall global expansion strategy.

Research limitations/implications

Because of the chosen research approach, the research results may lack generalizability.

Practical implications

The paper provides insights into why prior research on cultural distance and entry modes has yielded mixed results. From a strategic viewpoint, the paper stresses the particularities of the retail sector and how retailers try to account for cultural distance in their entry mode decisions.

Originality/value

By focussing on a single company instead of a meta-analysis, the analysis demonstrates how the search for strategic consistency and the particularities of the retail sector reverse a well-investigated theoretical assumption. The main originality of the paper is that it shows the implications of the interplay between cultural distance and entry mode as being part of the retail firm’s overall global expansion strategy.

Details

Cross Cultural Management, vol. 22 no. 1
Type: Research Article
ISSN: 1352-7606

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Article
Publication date: 30 August 2021

Jayaram Balachander

Most of the research studies on entry mode have been done through the lens of manufacturing firms from mature economic countries entering the Global South countries, and…

Abstract

Purpose

Most of the research studies on entry mode have been done through the lens of manufacturing firms from mature economic countries entering the Global South countries, and most of the related frameworks and theories have been developed to explain this perspective. This paper presents an understanding of entry mode strategies of services firms from the Global South countries entering into countries with mature economies by considering six software services firms in India entering the US market. The study develops a framework that incorporates multiple theories – both from an emerging economy perspective as well as a services perspective.

Design/methodology/approach

This study is exploratory in nature and focuses on the how and why aspects of strategic decisions. Qualitative research has traditionally been chosen when the main research objective is to improve understanding of a phenomenon. A multiple case study approach was used in this research. One of the key aspects of this study is the impact of different theories (institutional, network and other theories) on enterprises of different sizes. Therefore six cases – two each on small, medium and large enterprises – were selected.

Findings

Results identify addressable market size, cultural aspects, firm size, resource and service characteristics as dominating factors that influenced choice of entry modes. From a theoretical perspective, the author finds that theories such as transaction cost theory, eclectic paradigm and other popular theories associated with entry mode do not successfully explain the entry mode strategies for firms from the Global South. Strategic theory, such as resource-based view, motivation of a firm, have some application but do not explain, in isolation, all aspects of the entry mode choices.

Research limitations/implications

The study is an exploratory study and needs more data to validate the themes expressed in its conclusions. The study also focused on one industry and one country. Different industries within the same country may have different characteristics and may not follow the observations found in this study. Similarly, firms from other countries with similar economic characteristics may exhibit very different behavior. As a result, the themes that were expressed for software companies in India may not be generalizable across other industries and countries.

Originality/value

This study is significant for both academics and managers. For academics, the study addresses a significant gap in the literature. For managers, this study provides a framework for managers to evaluate and select the entry mode strategy that would be most effective in a successful expansion into foreign countries.

Details

Qualitative Research in Organizations and Management: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-5648

Keywords

Content available
Article
Publication date: 8 March 2018

Natalia Vila-Lopez and Graham White

To have success in newly liberalized markets, firms must have a plan of action before resources are committed. What some companies do not realize is that their own…

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1669

Abstract

Purpose

To have success in newly liberalized markets, firms must have a plan of action before resources are committed. What some companies do not realize is that their own entrepreneurial orientation (EO) will dictate their strategies, and performance outcomes, in both their home market and abroad. In order to maximize firm performance in newly liberalized markets (such as Cuba), firms must be able to objectively gauge their own EO. The paper aims to discuss these issues.

Design/methodology/approach

Within this framework, the present paper will attempt to effectively measure the EO of decision-making managers from US companies that have an interest in entering the Cuban market. A final sample of 81 US managers accepted to collaborate. They were then split into two groups (high and low EO; with 41 and 35 managers in each group, respectively) and compared regarding three variables: entry mode strategy, government affiliation strategy, and performance outcomes.

Findings

The results show that EO is related with performance, but not with the two proposed variables of entry mode and government affiliation.

Originality/value

In sum, the added value of the paper is to link US managers’ strategies and performance in a newly liberalized market which has been seldom studied: Cuba. The fields of entry mode strategies and government affiliation decisions in this newly liberalized market remain poorly investigated. Not all firms managed by highly entrepreneurial-orientated managers will decide to enter foreign markets and, on the contrary, domestic firms which are not interested in international markets can be run by highly entrepreneurial managers. This is due, in part, to the fact that internationalization can be driven by other factors. Therefore, this paper will attempt to demonstrate if certain entry modes will perform better than others when the foreign market is a newly liberalized economy. Additionally, the importance, and effect, of governmental relationships on performance outcomes will be tested within the research.

Details

European Journal of Management and Business Economics, vol. 27 no. 3
Type: Research Article
ISSN: 2444-8494

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Article
Publication date: 17 June 2004

Juan Florin and Alphonso O. Ogbuehi

Strategy and marketing scholars look at strategic issues from different points of view and attempt to explain strategic choice and performance from their unique…

Abstract

Strategy and marketing scholars look at strategic issues from different points of view and attempt to explain strategic choice and performance from their unique perspectives. This paper combines these perspectives in the context of international ventures and develops a conceptual framework integrating international marketing strategy decisions with entry mode decisions. The resulting contingency framework extends the hierarchical entrymode decision model and allows for a better specification of the strategy‐performance relationship in international business.

Details

Multinational Business Review, vol. 12 no. 2
Type: Research Article
ISSN: 1525-383X

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Article
Publication date: 26 September 2008

Yung‐Ming Cheng

The purpose of this paper is to propose an integrated theoretical framework to examine the determinants of the choice of ownership‐based entry mode strategy for small to…

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1665

Abstract

Purpose

The purpose of this paper is to propose an integrated theoretical framework to examine the determinants of the choice of ownership‐based entry mode strategy for small to medium‐sized enterprises (SMEs) in international markets.

Design/methodology/approach

The statistical data sources were mail survey and secondary data collection. Logistic regression was used in the testing of the hypotheses.

Findings

All four theoretical views (including transaction cost theory, the views of Uppsala process model, organizational capability perspective, and bargaining power theory) have relevance for the choice of SMEs' ownership‐based entry mode strategy in international markets.

Research limitations/implications

This study was limited to the manufacturing sector only. Given the limited scope, caution must be exercised in generalizing from this study's sample to firms in the service sector. Furthermore, this study is a cross‐sectional analysis and may not draw a complete picture of the course of SMEs' ownership‐based entry mode choice over time. Future research should use longitudinal analysis to explore the evolution of SMEs' international expansion over time.

Practical implications

This study proposes a decision path diagram that can give the SMEs some suggestions about how they should consider their choice of ownership‐based entry mode strategy in international markets. The executives of SMEs that invest in international markets can draw useful lessons from this study.

Originality/value

This study proposes a well‐rounded theoretical framework based on four theoretical views (including transaction cost theory, the views of Uppsala process model, organizational capability perspective, and bargaining power theory) to examine SMEs' choice of ownership‐based entry mode strategy in international markets. The limitations for past research that are inherent in focusing on a single theoretical view can be overcome.

Details

International Journal of Commerce and Management, vol. 18 no. 3
Type: Research Article
ISSN: 1056-9219

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Article
Publication date: 30 November 2004

Ming‐Tien Tsai and Yung‐Ming Cheng

This study examines the entry mode and ownership strategies in China, South‐East Asia and Western Europe made by manufacturing firms in Taiwan. The results find that when…

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1852

Abstract

This study examines the entry mode and ownership strategies in China, South‐East Asia and Western Europe made by manufacturing firms in Taiwan. The results find that when the larger, high R&D and high advertising intensive Taiwanese manufacturing firms invest in China, South‐East Asia and Western Europe, they would be likely to choose the greenfield‐WFOE entry. On the other hand, when these firms have the most foreign investing experiences and the longest investing history in China, South‐East Asia and Western Europe, the acquisition‐WFOE entry would tend to be preferred. Finally, this study proposes relevant implications for practice in the conclusion.

Details

International Journal of Commerce and Management, vol. 14 no. 3/4
Type: Research Article
ISSN: 1056-9219

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Article
Publication date: 1 August 2004

Grant E. Isaac, Nicholas Perdikis and William A. Kerr

Public and private policy responses to the introduction of genetically modified (GM) crops have differed across countries and regions, resulting in market fragmentation…

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3043

Abstract

Public and private policy responses to the introduction of genetically modified (GM) crops have differed across countries and regions, resulting in market fragmentation that is in conflict with the entry mode strategy of standardisation that has dominated the food distribution system for a century. To deal with the new market reality, an alternative entry mode strategy must be established which is capable of segregation – or identity preservation (IP) – of the commodity supply system. A multi‐mode strategy is presented that combines the economic transaction cost perspective with the institutional theory perspective. A seemingly paradoxical result emerges: standardisation is the solution to market differentiation. That is, an IP entry mode strategy must first be built on a foundation of standardised norms and protocols, which then makes it easier to target specific entry mode strategies to meet the divergent export market access rules resulting from the differential public policy and private strategies in various countries and regions.

Details

International Marketing Review, vol. 21 no. 4/5
Type: Research Article
ISSN: 0265-1335

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Book part
Publication date: 10 September 2018

Maria Cristina Sestu, Antonio Majocchi and Alfredo D’Angelo

Adopting a quantitative explorative research design, we employed a sample of 770 foreign market entries in the period 2005–2015 to investigate whether particular entry mode

Abstract

Adopting a quantitative explorative research design, we employed a sample of 770 foreign market entries in the period 2005–2015 to investigate whether particular entry mode strategies such as joint venture or wholly owned subsidiary are differently chosen by small- and medium-sized enterprises (SMEs) and large firms. Various tests have been carried out revealing that SMEs show some different features compared to large firms when selecting their entry mode. SMEs react differently to economic downturns, and the diversification level is a crucial determinant for their entry choices while it is not for large firms. Moreover, we found for a set of other factors affecting the entry choice of large firms, not being significant for SMEs. Implications of these findings are discussed.

Details

Key Success Factors of SME Internationalisation: A Cross-Country Perspective
Type: Book
ISBN: 978-1-78754-277-8

Keywords

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