Foreign-Market Expansion in Newly-Emerging Markets

Abstract

The aim of this research project was to further understand foreign-market entry and expansion in two medium-sized Finnish manufacturing companies (A and B) during the time period 1990-2000, in the Czech and Slovak Republics, Hungary and Poland. Six entries and further expansions comprise the six cases analysed here. My objective was to find out how the managers made and implemented their decisions to achieve the desired end-to sustain the growth of the company. I needed to discover more about the mechanisms in order to understand better the ongoing process of foreign-market expansion. My preliminary understanding was that the business relationships with local intermediaries significantly influenced operations in the CEE markets. Hence, both foreign-market expansions of the Finnish companies and business-relationship-development processes were in focus in the study. Given this double focus, I chose as my unit of analysis so-called bridgehead relationships. I searched for answers to questions concerning how the differences between the six cases arose. Why did they take different courses of action in similar external environments? How and why did the two Finnish companies make different choices? Why were the successes in one country not replicated in another? Inadequacies in the explanations of the foreign-market-expansion process offered within the international-business-research tradition suggested the relevance of a theory-building rather than a theory-testing research project. Accordingly, after the introduction, the first section of the article describes the theoretical departure of the research project and the second section introduces the applied methodology in detail. The third section discusses the results, including the theoretical framework developed through the grounded-theory analysis of the cases. The final section puts forward some managerial implications and future research avenues in the light of the results of the project.