Market Entry Mode Research Articles

Revisiting Shimizu et al. (2004): What do we know and what should we know about cross-border mergers and acquisitions?

AbstractCross-border mergers and acquisitions (M&A) constitute an important phenomenon due to their volumes, frequencies, and strategic relevance for business practice. Academia has recognized the phenomenon’s importance and compiled a wide spectrum of research. However, to the best of our knowledge, research has not provided a consolidation of recent literature findings particularly focused on cross-border M&A (as opposed to domestic M&A) since the publication of Shimizu et al.’s review in 2004. With this article we intend to close this gap by identifying, categorizing, synthesizing, and integrating recent literature to better understand what we do as well as what we should know about cross-border M&A. Thereby, literature findings are examined and discussed according to three perspectives: cross-border M&A as a (1) market entry mode, (2) dynamic learning process, and (3) value creating strategy. Based on the review, future research needs and opportunities are elaborated, first by directly following the findings from the review of the three research streams, and subsequently by adopting an overarching view that takes into account recent developments in multinational enterprise theory into account and addresses the “grand challenges” currently facing modern societies.

Independence or interdependence: The role of artificial intelligence in corporate entry mode for overseas energy investments

Artificial intelligence (AI) technology has significantly transformed corporate behavior in the energy sector by enhancing the capacity and efficiency of information transmission and big data analysis. However, there is still a limited understanding of how AI influences new market entry mode strategies in overseas energy investments. Drawing on information processing theory, we propose that firms with advanced AI technology exhibit superior data processing capabilities, which can help energy companies mitigate the uncertainties associated with entering a foreign market and encourage them to choose a wholly-owned entry mode. We further hypothesize that the state ownership of firms, the political affinity between home and host countries, and the risk preferences of firm executives serve as moderating factors. Using a sample of Chinese-listed multinational firms in the energy sector from 2010 to 2021, our empirical results strongly support these predictions. These findings contribute to the emerging and crucial literature on the impact of AI technology on firms’ overseas investment behavior, particularly in the energy sector.

Footloose and fancy-free in FinTech? Internationalization strategies of born regional and born global firms in the European financial service sector

AbstractDue to economic globalization and technological advancements, businesses are increasingly required to navigate complex international markets. One type of firm that has emerged in response to these trends is the born global, which initiates foreign activities almost from the very start. While these startups expand their reach by pursuing pro-active internationalization strategies, it is unclear whether startups creating the FinTech revolution also belong to this category. This study investigates five key components of the internationalization strategies of European FinTech startups: the speed and scope of internationalization, the drivers of internationalization, international market selection, the mode of market entry, and the challenges involved in internationalization. While born globals use a systematic approach to international market selection and entry, European FinTechs use a quasi-systematic and opportunistic approach to searching and seizing their geographical markets. Their common approach includes quickly going beyond their home base to adjacent markets, followed by gradual experimentation and substantive growth in their home region, and becoming born-regional firms (with some evolving into born-global firms later).

A knowledge-based perspective on SME foreign market entry mode choices and changes

PurposeDespite the importance of foreign market entry mode (FMEM) decisions for the internationalisation of small and medium-sized enterprises (SMEs), there is insufficient understanding of the knowledge types and sources necessary for such decisions. This study addresses this issue by investigating the knowledge configurations that underpin FMEM initial choices and subsequent changes in SMEs.Design/methodology/approachThis study adopted an interpretive approach and analysed empirical data from 37 in-depth interviews with decision-makers in internationalised SMEs from the United Kingdom.FindingsThe findings reveal that different knowledge configurations drive FMEM decisions in SMEs. Based on the analysis conducted for this study, initial FMEM choices draw on prior experiential knowledge combined with knowledge from desk research and knowledge acquired from peers, competitors and international partners. However, unlike many previous contributions, this research shows that foreign market experiential knowledge does not influence mode changes. Within-mode changes rely mainly on mode-specific knowledge and on knowledge about exploiting the benefits of the internet and digital platform ecosystems. Conversely, between-mode changes draw on diverse knowledge that is frequently created in interaction with international stakeholders or acquired externally.Originality/valueThis study contributes to the SME internationalisation literature by highlighting the knowledge configurations that inform not only initial choices but also between- and within-mode changes. Moreover, it reveals the importance of distinct types of digital technology-based knowledge for facilitating mode changes. It also adds to the knowledge-based perspective by underscoring that dynamic and heterogenous knowledge configurations, often created in interaction with international stakeholders, promote firm internationalisation.

Board leadership in global ventures: A bibliometric analysis

Board leadership in global ventures: A bibliometric analysis

International entrepreneurship: Insights from Laos, Cambodia, and Vietnam

The discipline of International Entrepreneurship (IE) conceptually rests upon the foundations of entrepreneurship and international business – with theory typically derived from larger corporations and mature markets. Through comparison between IE in emerging and mature contexts, and individual and corporate entrepreneurship, distinctive features of individual IE in emerging markets are identified. A series of case studies conducted in Laos, Cambodia, and Vietnam document how incremental innovation underpins IE; how foreignness helps IEs spot opportunities (unrecognized by locals); how simple bureaucracies (commonly found in emerging markets) invigorate IE; how startups in emerging environments embody assimilation (larger international corporations cannot match) – and how this assimilation (combined with being small and nimble) enables IEs to thrive within ambiguity and institutional voids. Most importantly, this study challenges the applicability of institutional and transaction cost theory to explain market entry modes of individual IEs in emerging markets. Contrary to conventional wisdom, institutional voids were not found to deter these IEs. Rather, these IEs’ primary concerns relate to pro-business dispositions among authorities, simple bureaucracies, and uncomplicated investment climates.

Influence of organization environment on contractor’s inter-regional market entry practice in China: an industry-level approach based on Bayesian logistic regression model

Inter-regional market entry poses a complex challenge for contractors, particularly in the construction industry with its unique characteristics. Existing research predominantly focuses on an international scale and target markets, often overlooking the influence of the organizational environment, especially the home market. This study aims to fill this gap by analyzing how the construction organizational environment affects contractors’ inter-regional market practices. Grounded in theories of organizational management, we developed a theoretical model with seven hypotheses examining the impact of organizational environment. We tested hypotheses with Bayesian logistic regression model based on data from 426 construction organizations in China. Our findings reveal that a contractor’s size significantly impacts the practice compared to other attributes like ownership and experience. Additionally, a thriving local economy strongly supports contractors in exploring other geographical markets. Interestingly, while local competition intensity and protectionism create barriers for external firms, they do not significantly affect the diversification activities of local contractors. These insights contribute to understanding the dynamics of inter-regional market entry in the construction industry and can guide practitioners in strategizing for sustainable growth. Future research could explore more detailed strategies such as market selection and entry mode, enhancing the depth of understanding in this area.

Navigating Global Markets: Insights into Ceramic Firm Performance and Market Entry Strategies

Analyzing the intersection of market entry strategies and ceramic firm performance in the international market, this study offers insights into the dynamics shaping the competitiveness of U.S. ceramic firms abroad. By examining the strategic decisions guiding market selection and entry modes, this research sheds light on the factors influencing the success of ceramic enterprises on the global stage. This article delves into the intricacies of market entry strategies adopted by U.S. ceramic firms as they venture into international markets. It explores the strategic decisions made regarding market selection, distinguishing between English- and non-English-speaking countries, and the various modes of entry employed, including exporting, licensing, joint ventures, subsidiaries, and retail stores. The findings from a comprehensive analysis of 57 firms engaged in international markets unveil a significant trend: firms targeting culturally similar markets, particularly English-speaking ones, tend to achieve superior revenue generation and overall performance compared to those entering non-English-speaking countries. Additionally, through a cluster analysis, the study identifies four overarching modes of entry ranging from straightforward direct exporting to more intricate strategies integrating subsidiaries and retail outlets abroad. Surprisingly, the mode of entry doesn't exhibit a clear association with performance outcomes. This suggests a cautious approach by U.S. ceramic firms, opting for markets with lower levels of uncertainty, primarily through export activities.

International entrepreneurship: Insights from Laos, Cambodia, and Vietnam

The discipline of International Entrepreneurship (IE) conceptually rests upon the foundations of entrepreneurship and international business – with theory typically derived from larger corporations and mature markets. Through comparison between IE in emerging and mature contexts, and individual and corporate entrepreneurship, distinctive features of individual IE in emerging markets are identified. A series of case studies conducted in Laos, Cambodia, and Vietnam document how incremental innovation underpins IE; how foreignness helps IEs spot opportunities (unrecognized by locals); how simple bureaucracies (commonly found in emerging markets) invigorate IE; how startups in emerging environments embody assimilation (larger international corporations cannot match) – and how this assimilation (combined with being small and nimble) enables IEs to thrive within ambiguity and institutional voids. Most importantly, this study challenges the applicability of institutional and transaction cost theory to explain market entry modes of individual IEs in emerging markets. Contrary to conventional wisdom, institutional voids were not found to deter these IEs. Rather, these IEs’ primary concerns relate to pro-business dispositions among authorities, simple bureaucracies, and uncomplicated investment climates.

UClean scaling up dilemma: towards building a laundromat mosaic in India

Learning outcomes This case study outlines the strategic and organisational issues faced by an entrepreneurial firm operating in an emerging economy. This case study has been written to equip students with how entrepreneurs can overcome certain barriers and use technology to achieve product–market fit, taking the Indian laundry sector as an example. The following are the key learnings for the case: start-ups need to continuously assess the product–market fit to organise a highly unorganised sector; market entry and expansion modes require proper evaluation of available entry and expansion modes before pursual; franchising decisions require firm-specific and location-specific considerations; and careful consideration given to celebrity endorsement will result in increased sales. Case overview/synopsis The Indian laundry market was a highly unorganised market and presented an untapped opportunity. While the market opportunity was enormous, the existing solutions comprised local vendors that may not provide end-to-end services (washing, ironing, etc.). The case study described how a young entrepreneur, Arunabh Sinha, overcame certain challenges to achieve a product–market fit for metro cities and later expanded to Tier 2 and Tier 3 cities in India as well. However, the challenges remained, as the firm expanded by using a franchise model, and other modes of business were required to be evaluated as well. Complexity academic level The case study is suitable for students pursuing MBA courses in marketing, service marketing and entrepreneurship development. Supplementary materials Teaching notes are available for educators only. Subject code CSS3: Entrepreneurship.

Tesla: route to India, route in India

Research methodology The case has been developed by using secondary sources of information. Case overview/synopsis Tesla’s much-awaited foray into the burgeoning Indian electric vehicle (EV) marketplace had hit the “high import tariff” roadblock. Discussions ensued and finally, Elon Musk, the CEO of Tesla and the Indian Government found common ground. The moot point of Tesla’s entry mode was resolved. Musk announced Tesla’s plan to set up an EV supply chain and manufacturing facility in the host country. This case discusses factors affecting location decision, market entry modes and international corporate-level strategies. Tata Motors sold affordable cars and was miles ahead in the EV race in India. Musk had to align Tesla’s India strategy with the company’s global strategy to woo the price-sensitive Indian consumers. What were the options available to him? This case examines different business-level strategic options that could help Tesla drive in the fast lane in India. Complexity academic level The case can be used in international strategy course at graduate level. It can also be used in a session on international marketing in marketing management course.

How do creative assets affect overseas market entry modes of enterprises- the moderating role of internal and external factors.

In the process of transnational investment management, the choice of entry mode is one of the key decisions, and creative assets will affect the choice of overseas market entry mode. However, few studies have analyzed how creative assets affect firms' overseas market entry patterns. This paper takes 480 overseas investment data of 134 Chinese listed enterprises from 2012 to 2019 as research samples and uses the Logistic model to study the influence of creative assets owned by enterprises on their choice of the joint venture and wholly owned modes. At the same time, we examine the formal and informal institutional distance between home and host countries, and the moderating effect of firms' own experience in the process of model selection. In addition, using the fuzzy-set qualitative comparative analysis (fsQCA) from the perspective of configuration to explore the different paths of overseas market entry mode. The research results indicate that marketing intensity and technical intensity of enterprises have a positive and significant impact on overseas investment patterns, that is, higher marketing intensity or technical intensity will prompt enterprises to preferentially choose wholly-owned mode. Formal institutional distance and experience can moderate the relationship between creativity and investment mode to some extent, while informal institutional distance has no significant moderating effect on creative assets and investment mode. Three configurations can induce firms to choose the wholly-owned mode, and only one configuration can induce firms to choose the joint venture mode. This study lays a theoretical foundation for enterprises to enter the overseas market.

Foreign market entry modes of family firms: A review and research agenda

Although research on foreign market entry mode choice is spread across various aspects and dimensions, a comprehensive review that accumulates the knowledge holistically in the context of family firms is sparse. To address this gap, the study systematically reviews 50 research articles and presents state-of-the-art literature for around three decades (1993–2021) by employing PRISMA and Theory – Context – Characteristics – Methodology (TCCM) framework. The objective of the study is to understand: (i) the theories that explain the factors affecting the entry mode choice of family firms (ii) the contexts (i.e. industries and countries) in which the underlying research has been investigated (iii) the characteristics or the factors (i.e. independent, moderating, and dependent variables) that explain the entry mode choice of family firms, and (iv) the methods that have been employed to understand the underlying research area. Based upon the review, the study set forth the future research agenda with respect to each of the dimensions of the TCCM framework. The study proposes a holistic framework offering the future direction to the research scholars, to explore - How “peculiar family firm characteristics” play a moderating role in determining the foreign market entry mode strategies of family firms?

Cementing a place in Africa: PPC’s internationalisation drive

Learning outcomes The study enables students to critique the internationalisation strategy of an African business including elements of macroeconomic analysis, company fit with jurisdictions, non-market strategies and mode of entry. Case overview/synopsis Roland van Wijnen was the chief executive officer of Pretoria Portland Cement Company Limited (PPC), a 130-year-old cement maker based in South Africa. He joined after the business had embarked on an international expansion strategy that had taken the business to countries of Rwanda, the Democratic Republic of the Congo and Ethiopia in a matter of years. This expansion caused the deflation of the Johannesburg-listed company’s share price. The company failed to appreciate a number of success factors in each jurisdiction. The challenges included cultural misalignments, macroeconomic analysis and mode of market entry. The case dilemma involved the choices that van Wijnen faced in re-evaluating the international footprint of the business. Complexity academic level Undergraduate or postgraduate level. Supplementary material Teaching notes are available for educators only. Subject code CSS 5: International business.

Strategi Penetrasi Pasar Global: Eksplorasi Bibliometrik tentang Pemasaran Internasional, Mode Masuk Pasar, dan Strategi Ekspor

The global business landscape is characterized by rapid change and increasing complexity. In this dynamic environment, understanding firms' strategies to penetrate international markets is crucial. This study conducts a comprehensive bibliometric analysis to uncover the intellectual landscape of global market penetration strategies in international marketing, market-entry, and export strategies. Through careful examination of influential authors, essential works, research clusters, and emerging trends, this study offers valuable insights into the state of the field. Leading authors such as Ravi Ramamurti, Mike W. Peng, and Jean-François Hennart have significantly shaped our understanding of emerging market multinationals and internationalization strategies. Their seminal works have challenged conventional paradigms and encouraged innovative thinking. Identifying research clusters underscores the multifaceted nature of global market penetration, covering market entry modes, internationalization theory, and emerging market dynamics. Emerging digitalization, e-commerce, and sustainability trends highlight the ever-evolving international marketing landscape. The implications of this analysis extend to researchers, educators, policymakers, and practitioners, providing valuable guidance for future research, curriculum development, policy formulation, and strategic decision-making in the global arena.

Suggestions for Lawsons Entry into the Global Market: Evidence from Operations and Strategy of Lawson Convenience Stores in China

Convenience store as a retail format meets urban populations demand of a more efficient and expedient lifestyle. This retail model originated in Japan, and Lawson, as the second largest Japanese convenience store chain, has reached saturation in the domestic market and is now looking to expand internationally for future growth. This essay examines Lawsons development in China and provides suggestions for its future growth in the global market based on its operations and strategies in China. Through the analysis of literature research, market data and Lawsons official annual reports, this paper gives a comprehensive analysis of Lawsons successful experience in the Chinese market and offers advice on the firms global development, emphasizing detailed market research and entry mode, a well-structured supply chain and technological investment, and targeted marketing strategies.

Global Cities and Multinational Enterprises: Integrating the Existing Concepts for Future Research Studies

Global Cities (GCs) and Multinational Enterprises (MNEs) belong to a group of entities that shape the modern world economy in the most distinct way. So far, both of them have been given a lot of attention in the literature, but few studies have been written linking these two important threads of deliberation remaining the aspects of relationships between GCs and MNEs relatively unexplored. This is surprising as GCs and MNEs are not sole players but symbionts in the world economy. Hence, the intention of the authors – and the aim of this paper – is to overview these issues and connect GC and MNE threads in order to provide a platform for future research studies. By adopting an evolutionary approach and integrating the perspectives of economic geography, urban studies and international business, the paper identifies several research areas that may be fundamental to the GC/MNE discussion. They have been grouped in the following five thematic categories: global trends, international and country-specific factors; heterogeneity and transformation of global cities; MNE internationalization motivations and different market entry modes; global cities and global value chains; outcomes of MNE activity.

Exploration, exploitation, and mode of market entry: acquisition versus internal development by Amazon and Alphabet

Abstract Research on the tension between exploration and exploitation has made fundamental contributions to our understanding of firm growth via entry into new businesses. While there is consensus about the merits of balancing exploration and exploitation, there has been debate about the best means for achieving balance. In our prior analysis of firms’ choices between acquisition and internal development as entry modes, we found that the role of acquisitions tends to differ inside versus outside a firm’s primary business domain: firms use within-domain acquisitions largely for exploitation, while out-of-domain acquisitions support exploration. To examine these issues in greater depth, we focus here on the historical use of acquisition versus internal development by two major technology firms, Amazon and Alphabet. We show that the two firms have been remarkably different in their use of acquisitions versus internal development. Consistent with our prior analysis, Amazon has emphasized internal development but has used acquisitions to strengthen its existing businesses and to enter new products and services that were (initially) outside Amazon’s primary business domain. In contrast, Alphabet has relied heavily on acquisitions to enter new businesses within its primary domain but has emphasized internal development of “moonshot” businesses outside this domain. These differences illuminate the use of acquisitions in market entry and make clear that there is no single right way to utilize acquisition versus internal development in the pursuit of balance between exploration and exploitation.

Institutional distance and the international market entry mode: A meta-analysis

With increasing interest in the internationalization of multinational enterprises, recent studies have focused on the differences between institutions in home and host countries and how they affect the strategic entry decisions of multinational enterprises, particularly the equity-based entry mode. However, the conclusions regarding institutional distance and the equity-based market entry mode are contradictory. This relationship is theoretically unclear and empirically inconsistent. To help resolve these contradictory findings, we conduct meta-analytic research on the relationship between institutional distance and equity-based entry mode. We investigate several moderators that may affect this relationship. These moderators can be divided into three types: measurement factors, such as indices, data sources, and calculation methods; contextual factors, such as industry, time of study, and country characteristics; and theoretical orientation. We offer theoretical insights and recommendations to improve the validity and reliability of research on institutional distance, equity-based entry mode, and ideas for future research.

Journal of International Management: A 25-year review using bibliometric analysis

The Journal of International Management (JIM) is a leading international academic journal in the field of international business. This study presents a retrospect of the publications in JIM for the last 25 years (as JIM was founded in 1995) through a bibliometric methodology using the Scopus database and Web of Science. The study graphically maps the bibliographic material using VOS viewer software and applies co-citation analysis, bibliographic coupling, and co-occurrence of author keywords. We identify that the journal has expanded consistently and steadily in terms of both number of publications and citations. The collaboration network has expanded over the years, and the geographical focus is more global, encompassing Asia and Oceania. Bibliographic coupling of JIM publications reveals several distinct, major themes in the international management/business domain. Conventional international management themes that have emerged include market entry modes, globalization, international human resource management, cross-cultural management/leadership, and expatriate management. New emerging themes include emerging markets, global sourcing, innovation performance, digital firms, diversity of global teams, internationalization in uncertain environments, and virtual teams. A summary of the shifting research trends and themes in the discipline and their development is presented in this review, culminating in future directions for prospective publishers of JIM.