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Article
Publication date: 24 August 2018

K. Skylar Powell

Research has identified inverted U-shaped relationships between domestic competitive position, often cast in terms of home-country market share or relative profitability, and…

Abstract

Purpose

Research has identified inverted U-shaped relationships between domestic competitive position, often cast in terms of home-country market share or relative profitability, and speed of entry into a foreign market. However, in some industries, firms may be especially attentive and responsive to competition between firms in their local-home market (i.e. sub-national). Hence, this study aims to explore the effect of local-home market competitive intensity on the relationship between a firm’s overall competitive position and speed of entry into a foreign market.

Design/methodology/approach

Data from 114 large US corporate law firms from 1992 through 2008 were used for Cox proportional-hazards regression models to estimate the moderating effect of local-home market competitive intensity on the relationship between relative profitability at the national level and speed of entry (i.e. hazard rate) into China.

Findings

Less-dominant firms from highly competitive local-home markets entered China more quickly than less-dominant firms from less-competitive local-home markets. In addition, first-movers from highly competitive local-home markets tended to have more advantageous competitive profiles, as reflected in profitability, than first-movers from less-competitive local-home markets.

Originality/value

This research explores an important contingency in the relationship between a firm’s competitive position at home and timing of entry into a foreign market. Additionally, the results suggest that first-movers from less-competitive local-home markets may face immediate competition from better-positioned first-movers from more competitive locations within the same home market when they enter new markets.

Details

Multinational Business Review, vol. 27 no. 1
Type: Research Article
ISSN: 1525-383X

Keywords

Article
Publication date: 1 February 2002

K. Sivakumar

The globalization of markets and businesses has meant that many companies now consider the world as a potential marketplace. In this changing environment, two crucial decisions…

1686

Abstract

The globalization of markets and businesses has meant that many companies now consider the world as a potential marketplace. In this changing environment, two crucial decisions taken by companies are time of entry (e.g. whether to enter early or late) and level of involvement (e.g. whether to adopt low involvement modes such as exports or high involvement modes such as sole venture). Although existing research has examined these issues and underscored the importance of these two decisions in isolated descriptive research, none has developed an integrated mathematical modeling framework for handling these two decisions simultaneously. To alleviate this important gap in the literature, develops a mathematical model for considering these decisions in a simultaneous framework. The results of the model are illustrated by means of numerical simulations. Managerial implications of the model and future research directions are delineated.

Details

International Marketing Review, vol. 19 no. 1
Type: Research Article
ISSN: 0265-1335

Keywords

Book part
Publication date: 13 August 2007

Jing Li

The application of real options theory to international strategy has surged in recent years. However, it is still a relatively new and loosely defined field, and there are several…

Abstract

The application of real options theory to international strategy has surged in recent years. However, it is still a relatively new and loosely defined field, and there are several constraints on practical applications of this powerful theory. To move forward this field, the paper first provides a systematic analysis of theoretical and empirical contributions of real options theory to three critical issues in international strategy: (1) valuing multinational networks, (2) assessing market entry modes, and (3) evaluating market entry timing. The paper further suggests that future studies can focus on a refined treatment of uncertainty and the development of a dynamic theory in international strategy. Five testable propositions are developed in these directions.

Details

Real Options Theory
Type: Book
ISBN: 978-0-7623-1427-0

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…

1957

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

Keywords

Article
Publication date: 1 December 2020

Frank Tian Xie, Naveen Donthu and Wesley J. Johnston

This paper aims to present a new framework that describes the relationship among market entry order and timing, the advantages accruing to first-movers and late-movers, entry

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Abstract

Purpose

This paper aims to present a new framework that describes the relationship among market entry order and timing, the advantages accruing to first-movers and late-movers, entry timing premium (ETP), marketing strategy and enduring market performance of the firms. The framework, empirically tested using data from 241 business executives, expands extant research into new territory beyond first- and late-mover advantages in an attempt to reconcile a few streams of research in the area and provides an entry related, strategic assessment tool (ETP) for the managers. Contribution to marketing strategy theory and managerial implications are also presented.

Design/methodology/approach

Participants included informants in a firm’s strategic business unit who were the most familiar with a new product’s commercial launch, market condition at launch, competitor offerings, marketing activities and capabilities and eventual integration into or withdrawal from the product’s portfolio. Therefore, for the survey, the study targeted chief executive officers, vice presidents of marketing or sales, product or sales managers, general managers and regional managers. Both preference bias (Narus, 1984) and survivor biases among the respondents were addressed.

Findings

The research result of this study reveals two very significant aspects of marketing and marketing strategies. First, the importance of financial, pricing and cost strategies further attests to the fiercely competitive nature of the global market today and the tendency for firms to commoditize most products and services. An effective financial and pricing strategy, coupled with a higher level of ETP, is capable of leading a firm to initial market success in the product-market in which it competes. Both ETP (a positional advantage and resource of the firm) and financial and pricing strategies (a deliberate strategic decision of the management) are important to achieve this goal.

Research limitations/implications

This study is limited in several ways. The effects of entry order and timing on market performance could be dependent on the types of industries and types of product categories involved. However, as the hypotheses were well supported, the “industry specific” factors would provide “fine-tuning” in the future study. Second, the nature of the product (goods or services) may also present varying effects on the relationship studied (for differences between manufacturing and service firms in pioneering advantages, see Song et al., 1999). Services’ intangible nature, difficulty in protecting property rights, high involvement of boundary-spanning employees and customers, high reliance on delivery and quality, and ease of imitation may alter the proposed relationships in the model and the moderating effects. Third, although this study used a “retrospective” protocol approach in the data collection by encouraging respondents to recall market, product and business information, this study is not longitudinal. Lack of longitudinal data in any study involving strategic planning, strategy execution and the long-term effects is no doubt a weakness. In addition, due to peculiarity and complexity with regard to regulation and other aspects in pharmaceutical and other industries, the theory might be limited to a certain extent.

Practical implications

In all, the integrated framework contributes to the understanding of the intricate issues surrounding first-mover advantage, late-mover advantage, entry order and timing and the role of marketing strategy. The framework provides practitioners guidance as to when to enter a product-market to gain advantageous positions and how to maintain that advantage. Firms that use a deliberate late-mover strategy could also benefit from the research finding in mapping out their strategic courses of action.

Originality/value

This study believes that the halo effect surrounding first-mover advantage may have obscured the visions of some researchers and managers, and the pursuit of a silver bullet has led to frenzied interests in becoming a “first-mover” or a deliberate “late-mover”. The theoretical framework, which is substantiated by empirical testing, invalidates the long-held claim that entry of a particular kind (first-movers or late-movers) yields any unique competitive advantage. It is a firms’ careful selection of marketing strategies and careful execution of the strategies through effective operational tactics that would lead to enduring competitive advantage, under an adequate level of ETP.

Details

Journal of Business & Industrial Marketing, vol. 36 no. 7
Type: Research Article
ISSN: 0885-8624

Keywords

Article
Publication date: 11 August 2020

Andrea Kuiken, Robert Wentrup and Roger Schweizer

This paper aims to examine the de-internationalization process to determine how different forms of attitudinal commitment influence the de-internationalization process.

Abstract

Purpose

This paper aims to examine the de-internationalization process to determine how different forms of attitudinal commitment influence the de-internationalization process.

Design/methodology/approach

Because of the exploratory nature of the study, a case study design is used. Two cases of Swedish companies, which de-internationalize from the French market, are studied.

Findings

Different commitment profiles influence the de-internationalization process. In particular, a general commitment profile, in which affective, normative, instrumental and continuance commitment play a role, influences the timing of de-internationalization, while the effort directed toward the execution of de-internationalization is mainly influenced by normative commitment and the extent of de-internationalization mainly by instrumental commitment.

Research limitations/implications

By offering three propositions regarding the four types of commitment and the effects of these commitment types on the process of de-internationalization, the authors contribute to the literature on de-internationalization and the commitment literature.

Practical implications

The findings suggest that there is a risk that managers continue to commit resources to a market for a longer period without clear benefits because of affective and continuance commitment. As local employees persist in committing to the local market because of continuance commitment, offering viable alternatives reduces commitment to the foreign operations.

Originality/value

Distinguishing between different types of commitment, the paper builds on a more fine-grained typology of commitment than previous internationalization literature. Thereby, the paper opens up for new insights in the de-internationalization process.

Details

Multinational Business Review, vol. 28 no. 4
Type: Research Article
ISSN: 1525-383X

Keywords

Article
Publication date: 1 November 2011

Shavin Malhotra and K. Sivakumar

The purpose of this paper is to develop and test a theoretical model of managerial decisions involving international market entry.

2855

Abstract

Purpose

The purpose of this paper is to develop and test a theoretical model of managerial decisions involving international market entry.

Design/methodology/approach

The authors propose a mathematical model that seeks the optimal level of cultural distance between the host and the home country and the market potential of the host country that maximizes a firm's investment in an international market. The authors illustrate the intuition and the managerial application of the model using a large data set of cross‐border acquisitions, then the results of this data set are used to validate the model in a specific data context.

Findings

The authors find that cultural distance and market potential have curvilinear and interaction effects on the level of equity participation. The empirical results are further used to conduct sensitivity analysis of decisions for changes in parameters.

Research limitations/implications

The authors’ general approach can be used to analyze any two variables that have interaction effect on a variable of interest related to market entry strategies.

Practical implications

The authors illustrate the intuition and the managerial application of the model using a large data set of cross‐border acquisitions. Managers can use this approach in choosing CBA targets.

Originality/value

The study provides a mathematical framework and an empirical illustration of optimizing the cultural distance and market potential for maximizing equity participation in foreign market acquisitions. This is a new unique contribution to the literature.

Details

International Marketing Review, vol. 28 no. 6
Type: Research Article
ISSN: 0265-1335

Keywords

Article
Publication date: 1 December 2000

Asta Salmi

Adopts a holistic network approach to analyse a company’s entry into a turbulent market. The entry is examined as a process. The analysis focuses on the temporal context of…

1950

Abstract

Adopts a holistic network approach to analyse a company’s entry into a turbulent market. The entry is examined as a process. The analysis focuses on the temporal context of business interaction; it inspects how the company copes with uncertainty, and proposes that the concept of a focal net be applied for strategic analysis of the context. In the empirical part, the Estonian market exemplifies a turbulent environment, and the entry process of one Western high‐technology company is analysed. It is concluded that, while all interaction on any business market involves elements of the historic background as well as the participants’ expectations of the future, history now seems to dominate the markets of Eastern Europe.

Details

European Journal of Marketing, vol. 34 no. 11/12
Type: Research Article
ISSN: 0309-0566

Keywords

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 perspectives. This…

1021

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 entry‐mode 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

Keywords

Article
Publication date: 7 January 2013

Keith J. Perks, Stephen P. Hogan and Paurav Shukla

Whilst earlier studies of market entry success factors have mostly focused on large emerging markets such as China or India, limited attention has been given to smaller emerging…

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Abstract

Purpose

Whilst earlier studies of market entry success factors have mostly focused on large emerging markets such as China or India, limited attention has been given to smaller emerging markets. The purpose of this paper is to identify the effects of firm-level (i.e. entry mode and firm size), country-level (i.e. market potential, country risk and openness) and cultural distance on successful market entry strategies of multinational enterprises (MNEs) in a smaller emerging country (Thailand).

Design/methodology/approach

Using archival data from 1996-2008 and a survey of 139 firms, the results reveal significant influence of both market potential and cultural distance on successful market entry.

Findings

Overall, the findings demonstrate a cautionary approach when generalizing the results of studies focusing on large emerging markets to smaller emerging markets. Smaller emerging markets such as Thailand offer very different market-space than large emerging markets and therefore the overall determinants of success may differ substantially.

Practical implications

Market potential appears to be the most significant variable in entering the Thai market. The findings also suggest a negative and significant relationship between cultural distance and market success in Thailand. This reveals that foreign firms that enter small emerging markets which are culturally close to their home countries can enjoy a greater possibility of success.

Originality/value

This study is a first step towards sensitizing corporations and policy makers in understanding the differences in market entry success factors between larger and smaller emerging markets and strategizing accordingly.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 25 no. 1
Type: Research Article
ISSN: 1355-5855

Keywords

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