Market Entry Strategies Research Articles

Small Firms’ Internationalization Process: A Gradual or Born-Global Approach?

This paper attempts to review and extend the Uppsala model by assessing the impact of managerial characteristics on small firms‘ internationalization process. Results from case studies of four British SMEs in Vietnam show that psychic distance has insignificant impact on the decision makers’ choices of markets and market entry strategies. SMEs develop their international strategy in a non-systematic and non-linear way. Managerial characteristics, including their network relationship, international experience, influence the firm’s decision in identifying business opportunities in new markets and market entry strategies.

Corrupt Business Practices as a Market Entry Strategy

Drawing on the literature around how competition leads to unethical behavior and how new firms compete with incumbents we propose that the competitive disadvantage faced by new entrepreneurial entrants in many established markets leads to corrupt business practices, and how in turn, these corrupt business practices enable entrepreneurial activity. Using a policy change to identify risky illegal behavior in the liver transplant market in the form of manipulating patients status in the intensive care unit (ICU) we find that: illegal manipulation of the ICU list is higher in more competitive markets, new entrants were more likely than incumbents to illegally list patients in the ICU, and entry significantly decreased after the policy change when firms no longer had the opportunity to misrepresent patient status illustrating the enabling effect the availability of a risky illegal option had on entrepreneurial entry.

The Foreign Corrupt Practices Act: Why It Fails to Deter Bribery as a Global Market Entry Strategy

Recent studies (Cragg and Woof, Bus Soc Rev 107(1):98–144, 2002; Weismann, J Bus Ethics 88:615–66, 2009) revealed that in the first 28 years of its existence, the Foreign Corrupt Practices Act was not enforced by the federal government. The Weismann study further concluded that the FCPA, designed by Congress as a self-regulatory model of corporate governance, failed to achieve the regulatory goal of deterring global bribery by U.S. companies. The current article addresses the reasons that the FCPA remains an ineffective measure to control bribery as a global market entry strategy despite the highly publicized 2006 Department of Justice initiative to increase prosecutions and tighten enforcement efforts. The failure arises out of both the increased use of informal dispositions of case prosecutions, (including non-prosecution and deferred prosecution agreements), which has made “getting caught” merely an increased “cost of doing business” and the failure to close the regulatory gaps in the statute that permit violators to slip through the enforcement net. The article updates and compiles the case prosecution data for every reported case prosecuted between 1977 and 2011. That data are then compared to the results of a 2010 integrity risk survey performed by Deloitte Financial Advisory Services and Forbes which reveal a widely held global business perception that compliance and integrity risks appear to be rising sharply and that the FCPA is ineffective in deterring bribery and corruption in foreign markets. The article aims to serve as a predictive tool for policy makers and business professionals in assessing risk in the global markets, particularly as commerce intensifies in the BRIC countries, notable for bribery and corruption.

A strategy of the company performance in the international market

The aim of this paper is to determine an appropriate framework of strategic performance of companies in the international market. A company that plans to enter into the international market has to prepare well, has to choose adequate strategy, should have thought-market performance and developed marketing program which follows the activity of company. The choice of the appropriate strategy for company's entry into foreign markets affects the long term stability of the market functions and determines the scope of operations abroad by which the company can successfully develop its own abilities as well as to incur risks and uncertainties. There is a constant change in the environment, and by being aware of the changes, we choose between different options the company is opting for when selecting the international market entry strategy. The company should through the country entry analysis and entry forms; examine options that have greater significance in terms of its strategic objectives at the international market. Selecting the right strategy is the key issue that the company which wants to enter into international market is facing with.

A Study on the Chinese Market Entry Strategies of Korean Fashion Companies - The Case of E-Land

본 연구는 중국에 진출한 이랜드가 짧은 기간에 빠른 성장을 할 수 있었던 요인을 알아보고자 하였다. 특히 이랜드의 중국 시장 진입 전략을 이랜드가 보유한 핵심역량의 활용 측면과, 중국 시장의 현지화 측면으로 나누어 분석하였다. 이랜드는 국내 시장에서 축적한 시장 이해 및 대응, 제품 기획 및 디자인, 아웃소싱 운영, 강한기업 문화, 지식경영 및 M&A 역량 등을 중국 시장 진입 및 성장 과정에서 적극 활용하고 있다. 특히 시장 상황에 맞는 적기의 제품 공급, 이랜드 방식의 독특한 사업 개척, 철저한 품질 관리 체계 등은 모두 이랜드의 핵심역량을 중국 사업에서 활용하고 있는 것으로 볼 수 있다. 이랜드의 중국 사업은 철저한 현지화 전략도 동시에 적용하고 있다. 먼저 중국 시장을 이해하기 위한 철저한 시장 조사를 수행하였고, 현지인 육성 프로그램과 현재인 관리자 비율을 지속적으로 확장하고 있으며, 국내 시장과는 달리 고급화된 브랜드 포지셔닝을 사용하고 있다. 특히, 중국 이랜드는 사업뿐 아니라 사회공헌에도 많은 공을 들이고 있으며, 그 결과 중국에 진출한 한국기업 최초로 2년 연속 중화자선상(中華慈善賞)을 수상하는 등 적극적인 CSR 전략도 지속하고 있다. 본 연구에서 살펴본 이랜드의 중국 진출 전략 분석을 통해 중국을 진출하고자 하는 한국패션기업들에게 시사점을 제공할 수 있을 것이다.

The current situation of Chinese Fourth Party Logistics Industry and Korean Fourth Party Logistics Companies' market entry strategy

The current situation of Chinese Fourth Party Logistics Industry and Korean Fourth Party Logistics Companies' market entry strategy

The Impact of Product Portfolio Strategy on Financial Performance: The Roles of Product Development and Market Entry Decisions

Innovation is one of the most important issues facing business today. The major difficulty in managing innovation is that managers must do so against a constantly shifting backdrop as technologies, competitors, and markets constantly evolve. Managers determine the product portfolio through key decisions about product development and market entry. Key strategic questions are what portfolio strategies provide the greatest reward. The purpose of this study is to understand the relative financial values of each component of a product portfolio. Specifically, the paper examines the short‐term and long‐term financial impacts of product development strategy and market entry strategy. These strategies reflect two critical tensions that must be balanced in product portfolio decision making and essentially determine a firm's product portfolio. In doing so, the paper also investigates how a firm's capabilities drive each component of a product portfolio.From the empirical analyses in the context of the biomedical device industry, the paper found important insights regarding product portfolio strategies. First, a large product portfolio helps a firm's financial performance. In particular, the pioneering new products have strongest impacts on short‐term performances, and nonpioneering mature products do not provide significant contribution. Second, the results indicate a persistent first‐mover advantage. The first‐to‐market new products yield not only an immediate effect, but also persistent long‐term effects, suggesting that it is important to be first in the market even though there may be short‐term losses. Third, the results suggest the need to balance between “mature” and “new” products. Also, firms need to balance “first‐to‐market” and “late‐entered” products. Because a new or pioneering product requires more resource, it may hurt other products in the portfolio. Thus, without support from mature or follower products, new products and pioneering products alone may not increase firm sales or profit. Fourth, from a long‐term perspective, the paper found that the financial market only rewards a firm's overall capability to deliver new products first in the marketplace. Thus, short‐term performance is mainly driven by product‐level innovativeness, whereas firm‐level innovativeness enhances forward‐looking long‐term performance. Fifth, the paper also found that pioneering new products are driven by integrating both primary and complementary technological capabilities. And nonpioneering new products are mainly driven by the capabilities in primary technology domain. These results provide important insight into the relative value and timing of return on investment in radical versus incremental innovation and alternative market entry strategies. By understanding the performance trade‐offs of these different factors in the short and long term, one can develop better guidelines for optimizing innovation strategies, and their dependence on both external and internal environmental conditions.

Internationalization Strategies of Chinese Pharmaceutical Firms

Chinese pharmaceutical market value is about USD 110 billion in 2009, and it has become the world’s second largest market. Chinese pharmaceutical firms are becoming a growing player in global pharmaceutical chains. In this paper, sample firms are selected and surveyed with a focus on effective internationalization strategies and paths, through an empirical research, this paper summarizes the internationalization of Chinese pharmaceutical firms, and finds the effective strategies of international market entry are product upgrading along the industrial chains, international certification and cooperation, outsourcing and licensing, and other paths of overseas expansion. The implication for pharmaceutical firms in emerging market is to choose the suitable strategies based on own advantages, learn from the experience of other emerging market and domestic leading companies of internationalization, and gradually enter the standard market. This study not only provides international market entry strategies for the latecomers of Chinese pharmaceutical firms, but also enriches the internationalization theory of emerging market.

CASE STUDY Utilizing the VFBOP model for entry into emerging markets: Grameen Danone Foods

Emerging markets are extremely diverse and can require separate market entry and market development strategies. This paper will look at these opportunities through the lens of Value Flame at the Base of the Pyramid - VFBOP (Williams, et al., 2011). These concepts will be used to explore the potential of shifting paradigms in regard to emerging markets and to identify a leap in value for both consumers and producers. The purpose of this paper is to illustrate that transnational corporations should stop viewing profit potential from emerging markets coming solely from the traditional strategy of sourcing lower cost / higher quality products from these areas, but also increasing revenue and global market share by designing and selling offerings in collaboration with the market.

Chinese Market Entry Strategy of Korean Cosmetics -Focused on Brand Positioning-

This study aims to analyze the brand image of eight cosmetic brands in China and their competitiveness with the primary factor of the quality, the price, the design, the shop atmosphere, the online sales, the product experience, the promotion, and the product distribution system. With this aim, this study identifies eight cosmetic brands’ present position in Chinese market. In addition, this study suggests these cosmetic brands’ direction for suitable development of Chinese market. To achieve the goals, the authors carried out the survey of the Chinese people in SuZhou area who have used the cosmetics such as Laneige, Loreal, Amway, Maybellin, Skin Food, The Face Shop, Herborist, and Missha. Conclusively, the Korean cosmetics of Laneige and Missha have their own unique brand image. the Face Shop and Skin Food have to plan product differentiation strategy and seek niche market to compete in China. Under the competition among low-priced brands such as Missha, the Face Shop, and Skin Food, each brand has to develop a unique position to compete among low-cost brands. To achieve the goals of successful marketing, it is necessary for Korean cosmetic companies to recognize the position of the brand correctly and to establish and execute the discriminated marketing strategies against competitors for the Chinese market. Limitation and future research direction are addressed at the end of the study.

Market Entry Strategies in Emerging Markets: An Institutional Study in the BRIC Countries

AbstractThis article addresses two of the strategically important questions of market entry strategies in emerging markets: how to enter and when to enter. Furthermore, we investigate the relationship between market entry strategies and market success. On the basis of the institutional theory, we develop hypotheses that are tested against data collected from 564 foreign firms with operations in the BRIC countries (Brazil, Russia, India, and China), using an online survey. Our findings suggest that market entry strategies have a significant effect on market success, showing the greatest market success in India and the lowest in China. We also find that entry mode and length of operation exhibit a significant positive effect on market success. © 2013 Wiley Periodicals, Inc.

Prestige-oriented market entry strategy: the case of Australian universities

Through an exploratory case study of four Australian universities this article finds that foreign market entry strategies are shaped by prestige-seeking motivations and a culture of risk aversion. From the market selection, entry mode and higher education literature, a conceptual model, embedded with four propositions, is presented. The model sees market selection and entry mode as inter-dependent decisions which are influenced by manager and university motives, risk aversion and host government constraints in a gradual process of internationalisation. Among our key findings are that prestige is the key driver for university internationalisation and, due to a high degree of risk aversion, universities prefer zero-equity modes unless risk can be minimised or accommodated through suitable hedging strategies.

Rigor and Relevance of IJV Exit Research

International Joint Ventures (IJVs) are a well acknowledged and frequently implemented organizational mode, especially with regard to international market entry strategies, yet they are also prone to conflicts of interests, drawbacks, inefficiencies, and enduring losses. Past research has consequently been dominated by studies that have attempted to identify success factors for managing IJVs based mainly upon archive data. Success or failure is frequently defined on the basis that IJVs have ‘disappeared’ from the data-set. The term IJV-‘exit’ has become the byword for closing down ineffective, failing IJVs while neglecting the fact that such a disappearance may indicate success if, for instance, the initial objectives of partners have been achieved. Beyond such misconceptions, there is no stock-take of what is known about the different types, measures, contexts, and determinants of IJV exit to take research to the next stage. This paper fills this research gap by comprehensively analyzing the IJV exit literature as an integral part of IJV research, while focusing on studies that either apply IJV termination or IJV longevity as a measure of IJV exit. A systematic overview of the contexts and determinants that influence IJV exit is provided. Furthermore, the rigor and relevance of the existing IJV exit literature is evaluated in terms of its methodological, conceptual and theoretical foundation, and major implications for directing future research are proposed.

The effect of multi-level factors on MNEs' market entry success in a small emerging market

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.

"When Not Investing in Formal R&D, How Do They Manage Innovative Capacity?"

Drawing upon multiple theories, our research attempted to examine the role of various organizational characteristics that potentially influences distinct strategic choices for management of innovative capacities of firms. We used World Bank data with a sample size of 2206 of Indian manufacturing firms across industries collected from 20 industrial hubs. We examined how various organizational characteristic influences strategic choices and subsequently how these strategic choices affect innovative capacities of the firm. Results indicated that organizational characteristic plays significant role on its strategic choice for innovation. This research contributed to available discourse on market entry strategies, technology transfer arrangements, and innovation management.

The effects of international acquisitions in Serbia on status and engagement of human resources

In the past few decades globalization and deregulation of international economy has been noticeably accelerated. Consequently, new globalized business environment with numerous business opportunities as well as growing business risks has been made. The new business environment opened the door to intensive implementation of acquisitions as a market entry strategy. Foreign direct investments (FDI) in most of transition countries, including Serbia, predominantly come in the form of international acquisitions. There is a wide theoretical analysis of the effects of FDIs on target country economy. The overall conclusion is that green field projects, in comparison with international acquisitions, exert more favorable effects on all aspects of host country's economy. This paper examines the effects of international acquisitions in Serbia on work practices, wages and productivity using the analysis of the financial statements and the results of survey carried out among the foreign investors. It was found that decline of employment; productivity growth and increase in real wages are the results of the acquisitions. The survey also shows that the foreign investors invested in training and development of the acquired employees.

Big Pharma in China—The Driving Forces behind Their Success—A Qualitative Analysis

China has become a major player in the pharmaceutical industry within few years, leading the production and export of API worldwide and representing a double digit growth sector in terms of healthcare services needs in the next 5 to 10 years and predicted to be the largest Pharma market in 2020. To enter this market, Big Pharma companies have adopted different strategies to tackle the challenges specific to the coun- try in terms of size, specific needs sales channels and logistics adjustments. In this paper we will discuss the market entry strategies adopted by big Pharma in China. Major Pharma players have opted for either the aggressive M&A approach to penetrate the Chinese market, gaining local insight through the acquisition of local Pharma manufacturers and the production of generic drugs in China; or for some others an innovation focused strategy through developing its R&D structure in the Mainland to capitalize on the local talent pool and the cheaper operating costs the country offers. For this paper, we have applied a various set of tools to gather data: personal observations used as primary data, reviewed secondary data: Government reports, Pharma reports, studies and related scholarly articles, press releases and specialized websites. We performed PEST analysis to demonstrate how the socio economic environment in the country and the other external factors characterizing the Mainland all contributed to the success of foreign multinational pharmaceutical companies in China.

Market entry strategies of media agencies

Market entry strategies of media agencies

Foreign Market Entry Strategies in the North-Adriatic Area

The consolidation of economic and political relations in the North-Adriatic area and their formalization encouraged by the new institutional structures of Euro-regions are phenomena of central relevance to the actual European economic environment. These conditions have a significant influence on the strategic choices of local firms. In spite of the geographical proximity between Italy, Austria, Slovenia, and Croatia, cultural differences still act as important determinants in leading foreign investment strategies. The current study aims at analyzing the role played by cultural distance between the examined countries in affecting entry mode strategies followed by companies of the Italian region of Friuli-Venezia Giulia. In particular, the analysis suggests that a larger cultural distance, together with specific market characteristics, may force companies to choose entry forms with a lower degree of control, while specific firm characteristics may have an opposite impact on the internationalization strategies.

Time-To-Market and Product Innovativeness in Pharmaceutical New Drug Development Projects

R&D is a critical component of new product development. In this paper, we develop a theoretical framework for understanding how the performance of a firm¡¯s R&D mode choice between in-house and licensing is dependent on two crucial aspects of new product market entry strategies: time-to-market and product innovativeness. Based on a sample of new drugs approved by the FDA during 1990-2000, we find that entry strategies that result in high performance vary between in-house and licensing mode. Shortening time to market is critical for licensing modes while pursuing high product innovativeness is a key success factor for in-house modes. Our findings indicate that implementing the entry strategies suitable for each R&D mode is a crucial factor for the success of new product development.