Exploring the Staging Patterns of MNC Entry to New Markets: The Resource Leverage Approach

Abstract

This study aims at providing explanations for how MNCs (multinational companies) proceed with their manipulation of resources and competencies in the entry process to a foreign market. To an increasing extent, such processes perform as a staging process of resource leverage. This study identifies three stages, using the multiple case study incorporating grounded theory: the initial stage, the adaptive intensification stage, and the advantage persistence stage. In the initial stage, an MNC’s entry decision tends to be based on the resource replication mode of resource leverage; the resource exploitation mode of resource leverage is used mainly in the adaptive intensification stage, and the resource exploration mode is used in the advantage persistence stage. This study suggests that these resource leverage modes incorporating their microfoundations can be viewed as a set of potential measurements for examining MNCs' dynamic capabilities in the entry process to a new host market.