Entry Mode Strategies into the Brazil, Russia, India and China (BRIC) Markets

Abstract

This article explores the relevance of different entry modes for Danish exporting small and medium enterprises (SMEs). Internal and external resources that influence the choice of entry modes into the Brazil, Russia, India and China (BRIC) markets are investigated from both a resource-based view (RBV) and a market-based view (MBV). The survey conducted by the University of Southern Denmark in 2012 is based on a sample of 177 Danish SMEs. Our results of this study show that Danish companies entering the BRIC markets mainly prefer low commitment modes. The more traditional internal factors (control, flexibility and risk) were evaluated less important than personnel and financial resources for the BRIC markets. The most important external factor was market potential whereas the trade barriers, cultural distance as well as the political and economical risk are viewed as main obstacles when internationalizing into distant markets. Managers can compensate the loss of control when choosing the lower commitment modes into distant markets by forming business networks and thereby gaining local knowledge.