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Article
Publication date: 1 September 2002

Fahri Karakaya

This study examines the importance of 25 barriers to market entry in industrial markets. A survey of 93 firms indicates that majority of business executives consider cost…

Abstract

This study examines the importance of 25 barriers to market entry in industrial markets. A survey of 93 firms indicates that majority of business executives consider cost advantages and capital requirements to enter markets as the two most important barriers to entry followed by incumbents having a superior production process, capital intensity of the market, and customer loyalty. The least important barriers perceived by the executives in the study are government licensing requirements, followed by heavy advertising. In addition, the study investigates the underlying dimensions of barriers to entry in industrial market through a factor analysis. The results indicate that there are four major underlying dimensions of entry barriers in industrial markets.

Details

Journal of Business & Industrial Marketing, vol. 17 no. 5
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 17 March 2021

Mikael Hilmersson, Martin Johanson, Heléne Lundberg and Stylianos Papaioannou

Few researchers and even fewer practitioners would deny that serendipitous events play a central role in the growth process of firms. However, most international marketing

Abstract

Purpose

Few researchers and even fewer practitioners would deny that serendipitous events play a central role in the growth process of firms. However, most international marketing models ignore the role of serendipity in the opportunity discovery process. The authors provide a nuanced view on international opportunities by developing the role of serendipitous opportunities in the foreign market entry process. The authors develop a model integrating the notions of serendipity, entrepreneurial logic, experiential knowledge and network knowledge redundancy. From the study’s model, the authors condense three sets of hypotheses on the relationships among experiential knowledge and entry strategy, network knowledge redundancy, entry strategy and serendipity.

Design/methodology/approach

The authors confront the study’s hypotheses with data collected on-site at 168 Swedish firms covering 234 opportunities, and to test the hypotheses, the authors ran ordinary least squares (OLS) regression tests in three steps.

Findings

The results of the study’s analysis reveal that experiential knowledge and network knowledge redundancy both lead to a logic based on rigid planning and systematic search, which in turn reduces the likelihood that serendipitous opportunities will be realized in the foreign market entry process.

Originality/value

This is the first study that develops a measure of opportunities that are the outcome of serendipitous events. In addition, the authors integrate network and learning theories and internationalization theory by establishing antecedents to, and outcomes of, the entry strategy.

Details

International Marketing Review, vol. 38 no. 3
Type: Research Article
ISSN: 0265-1335

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Book part
Publication date: 4 March 2021

Irina Surdu and Edith Ipsmiller

Going back into previously exited markets is a significant management risk. But, how are re-entry risks managed? By adding strategic reference point (SRP) rationales to…

Abstract

Going back into previously exited markets is a significant management risk. But, how are re-entry risks managed? By adding strategic reference point (SRP) rationales to the risk management literature, this chapter examines re-entry after initial entry and divestment on a sample of 654 multinational enterprise (MNE) re-entrants. The authors move away from narrow risk management lenses according to which risks happen in isolation and theorize that MNEs simultaneously manage international risk by exploiting the trade-offs among external and internal sources of risk. The authors explain that, for re-entrants, exit may become the SRP for evaluating future strategic choices. The results suggest that re-entrants tend to manage re-entry risk by choosing partner-based modes that enable them to maintain strategic flexibility at re-entry. Surprisingly perhaps, market-specific experience acquired during the initial market foray does not provide strategic flexibility, in that highly experienced firms still experience risk trade-offs.

Details

The Multiple Dimensions of Institutional Complexity in International Business Research
Type: Book
ISBN: 978-1-80043-245-1

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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: 1 February 2001

Adam J. Koch

Contrary to the prevalent theory approaches that treat market selection and market entry mode selection as two related but essentially separate decisions, this paper…

Abstract

Contrary to the prevalent theory approaches that treat market selection and market entry mode selection as two related but essentially separate decisions, this paper argues that these should most appropriately be looked on as two aspects of one decision process. It proposes that an exhaustive list of factors that can influence outcomes of such an integrated process be developed and argues that an inclusive spectrum of analysis would be able to accommodate all business contexts and most relevant business practice. It then presents a new market and market entry mode selection model (MEMS) which conforms to the proposed inclusive spectrum of the underlying decision process analysis.

Details

Marketing Intelligence & Planning, vol. 19 no. 1
Type: Research Article
ISSN: 0263-4503

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Article
Publication date: 27 July 2010

Fahri Karakaya and Peter Yannopoulos

The purpose of this study is to develop a conceptual framework for defensive strategy by integrating market entry modes and the typology of firms suggested by Day and…

Abstract

Purpose

The purpose of this study is to develop a conceptual framework for defensive strategy by integrating market entry modes and the typology of firms suggested by Day and Nedungandi, and to attempt to propose how local incumbent firms utilize their mental models in order to react against market entry of new competition in global markets.

Design/methodology/approach

The theoretical perspective adopted in the study is how mental models used by incumbent firms influence their reaction to market entry of new competition in developing defensive strategies to defend their markets.

Findings

Mental models of incumbent firms, categorized as self‐centered, competitor‐centered, customer‐oriented, and market‐driven firms, impact their reaction and the development of defensive marketing strategies against market entrants using a variety of market entry modes in global markets.

Originality/value

The paper presents an extensive review of the defensive marketing and mental models literature and shows how the way in which incumbent firms react to market entry of new competition contributes to understanding of incumbent reaction to market entry of new competition in global markets. Research directions for future research and managerial implications are also provided.

Details

European Journal of Marketing, vol. 44 no. 7/8
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 13 February 2017

Sungwook Min, Namwoon Kim and Ge Zhan

The purpose of this study is to offer explanations of the wide variation in the impact of market size on new market entry decisions – i.e. its positive impact lessens…

Abstract

Purpose

The purpose of this study is to offer explanations of the wide variation in the impact of market size on new market entry decisions – i.e. its positive impact lessens because of unreliable predictability of market size on post-entry profit and entry motivations other than post-entry profit.

Design/methodology/approach

On the basis of the two explanations, this paper builds a contingency frame that the impact of market size on new market entry depends on entry-context-specific variables. It validates the contingency frame, empirically analyzing 219 parameter estimates of the impact of market size on market entry obtained from 41 existing empirical studies.

Findings

The meta-analysis results reveal that the entry-context-specific variables used in this study – niche market entry, high-tech market entry, entry by industry incumbent firms and the year of market entry – notably moderate the impact of market size on new market entry decisions, as the research frame suggests.

Research limitations/implications

This study examines the various literature and study outcomes in the areas of marketing, economics and strategy to elucidate whether and when market size is a critical driver of new market entry. In most cases, the greater the new market size, the greater is the propensity to enter the market. However, the contingency arguments stated in this paper suggest that firms may and do enter a new market even if the market size is not large at the time of entry.

Originality/value

This paper enhances the understanding of the relative importance of market size in market entry decisions, which depend on various entry contexts. It clarifies the direction and magnitude of the impact of such entry contexts.

Details

European Journal of Marketing, vol. 51 no. 1
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 1 April 2002

Scott G. Dacko

Notes that much is known in the academic literature about factors that may be influential in firms’ market entry timing decisions. Specifically, in response to a…

Abstract

Notes that much is known in the academic literature about factors that may be influential in firms’ market entry timing decisions. Specifically, in response to a competitors’ pioneering new product introduction, academic research finds many conditions that suggest a greater desirability of immediate market entry while many other conditions suggest a greater desirability of a delayed response. Reports the results of a survey and experiment where working managers and experienced MBA students were asked to evaluate the timing of market entry given a complex business scenario. The results show areas where there is a consensus among decision makers with the academic literature, as well as areas where views differ from that of the literature. Perverts and discusses insights gained into the decision making processes of managers for market entry timing decisions. The study can help managers in follower firms achieve greater success in formulating market entry timing strategies by reducing ambiguity in the timing implications of many internal and external conditions, as well as by drawing attention to potential action biases.

Details

Marketing Intelligence & Planning, vol. 20 no. 2
Type: Research Article
ISSN: 0263-4503

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Article
Publication date: 21 August 2017

Alexandros Fakos and Maria Merino

The purpose of this paper is to document the extensive heterogeneity in institutions within countries and investigate which institutional factors are the most relevant for…

Abstract

Purpose

The purpose of this paper is to document the extensive heterogeneity in institutions within countries and investigate which institutional factors are the most relevant for international brands.

Design/methodology/approach

The paper analyzes the entry patterns of three global fast-food franchise networks in 78 Mexican cities using discrete outcome models and ordered probit in particular. To summarize the quantitative importance of the results, the analysis includes also log-linear regressions with Heckman correction for the city observations without franchise presence.

Findings

Institutional factors are critical for an international franchisor in the decision to enter a new market. The most important institutional quality proxy for franchise entry is the rate of formal employment. The more the informal employment in a city, the lower the number of franchised stores and the lower the probability of brand presence in the city.

Research limitations/implications

Only three fast-food franchises are included in the paper, which limits the generalization of the results beyond the sector and Mexico. Another limitation of the methodology of this paper is that the authors estimate the effect of institutions on multinational franchise entry conditioning on market size. The issue here is that if institutions increase gross domestic product (GDP) per capita, then the demand for multinational franchises also increases. Such an effect cannot be captured if we condition on market size in our econometric models. This is particularly important for policy-makers aiming to quantify costs and benefits of reforms but not an important consideration for practitioners who might take institutions as given and are mainly interested in entry strategies that maximize profitability.

Practical implications

Institutional variables, and not only market factors, are critical to understand the entry decision of global franchisors in Mexico. In particular, the extent of informality is relevant in explaining the store location. It is necessary to understand how managers value the quality of institutions and which dimensions are most important for multinationals. In addition, the analysis should be conducted both at the national and sub-national level, given that within-country heterogeneity is prevalent in emerging markets.

Social implications

Cities must reinforce and communicate their institutional quality to attract foreign investment by franchises in particular.

Originality/value

We test several dimensions of institutional quality at the urban level as determinants of multinationals? decision to enter a city in a foreign market. We use novel administrative data at the municipality level and we employ econometric model that takes into account the discreetness of entry data and the fact that there are cities with no franchise presence. We control for sample selection, which comes from the zero number of stores in some city observations in the regressions.

Details

Management Research: Journal of the Iberoamerican Academy of Management, vol. 15 no. 3
Type: Research Article
ISSN: 1536-5433

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Article
Publication date: 28 June 2018

Byoungho Jin, Jae-Eun Chung, Heesoon Yang and So Won Jeong

Contrary to the mainstream born global (BG) perspective, some previous studies report the incremental expansion of BGs. In addition, the reasons behind BGs initiating…

Abstract

Purpose

Contrary to the mainstream born global (BG) perspective, some previous studies report the incremental expansion of BGs. In addition, the reasons behind BGs initiating specific steps, if any, and BGs’ entry market choices are still unknown or rather contrasting. This study views that such contrasting findings may be attributed to the contexts in which BGs operate. Within the context of consumer goods BGs, the purpose of this paper is to examine the entry market choices and post-entry growth patterns, and investigate the underlying reasons.

Design/methodology/approach

This study adopted in-depth historiographic case research from seven Korean BGs in the consumer goods sector that demonstrated success in internationalization. Multiple sources were used to gather data from each case. A total of 14 interviews, approximately two one-on-one interviews per firm, were the major means of data collection.

Findings

The findings revealed that first entry market choices among BGs functioned largely as attempts at emergent opportunities. However, after the first wave of entry into countries with available selling opportunities, entry market choice became a simultaneous pursuit of strategic markets and emergent selling opportunities. BGs focusing on image-oriented consumer goods appeared more strategic when entering the world’s leading markets to gain brand reputation. The analyses of internationalization processes revealed three patterns, which collectively implied that each move to the next stage came from a strategic decision to solve the problems related to survival and strategic visions for growth.

Originality/value

One contribution of this paper is the provision of empirical evidence for entry market choices among consumer goods BGs. The findings suggest that BGs’ entry market choices may not be a simple matter of simultaneous expansion to the world’s lead market. Instead, they may comprise more strategic decision. While previous studies have suggested such evolutionary or path-dependent internationalization processes, this study is among the first to reveal specific growth patterns and the possible reasons behind them.

Details

International Marketing Review, vol. 35 no. 6
Type: Research Article
ISSN: 0265-1335

Keywords

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