...Enterprises, Selection of Market Entry Mode Naveed Hussain Malik (naveed.hm@gmail.com) 770325-3059 Masood Hussain Chudary(zindagi03@hotmail.com) 801014-5855 Supervisor: Eva Wittbom Masters Degree Thesis in Business Administration School of Management Sciences Date of submission Abstract Development in infrastructure limits the communication gap, speedy travel and low cost tariff barriers as well other drivers of globalization have made overseas markets easier to get small firms and gave more opportunities to SME´s internationalize. The market entry mode choice or selections have strong effect the success or failure of the company. For instance an insufficient or wrong entry mode selection can decrease opportunities and limit important choice for the firm and could lead to high financial loss as well as lose control on overseas market. The purpose of research study is to provide a deep and better understanding of the factors those effecting SME´s selection of market entry mode. Research question how can the influence of internal and external factors on the selection of market entry mode. A frame of reference led to the building of summary which in turn became the basis for data collection. Two qualitative case studies for Pakistani SME´s namely socks knitter Pakistan and RK International were undertaken. The main findings shows the clear link between the theories claim to be internal and external factors influencing market entry mode choice...
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...JBR Paper June 27, 1999 DIVERSIFICATION AND MARKET ENTRY CHOICES IN THE CONTEXT OF FOREIGN DIRECT INVESTMENT Ram Mudambi University of Reading and Case Western Reserve University Susan McDowell Mudambi John Carroll University Address for correspondence: Dr. Susan McDowell Mudambi Department of Management, Marketing and Logistics Boler School of Business John Carroll University University Heights OH 44118 Phone: FAX: Email: (216) 397-3094 (216) 397-1728 smudambi@jcu.edu DIVERSIFICATION AND MARKET ENTRY CHOICES IN THE CONTEXT OF FOREIGN DIRECT INVESTMENT Abstract Multinational enterprises consider many factors when making decisions in the context of foreign direct investment (FDI). In deciding what to produce, the multinational enterprise (MNE) must decide whether to diversify or to concentration on its main line of business. This paper offers insights into influences on this choice, and identifies a number of conditions under which diversification is more likely to be chosen. Factors affecting the foreign entry mode decision are also analyzed. The international business literature has generally treated these strategic choices as independent. This paper introduces a more realistic selection model, in which the diversification choice and the entry mode choice are made sequentially and are therefore related. The model is tested using a data set of FDI into the United Kingdom by MNEs in engineering and related industries. The analysis indicates a strong relationship...
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...Chapter 9: Global Market Entry Strategies The need for a solid market entry decision is an integral part of a global market entry strategy. Entry decisions will heavily influence the firm’s other marketing-mix decisions. Global marketers have to make a multitude of decisions regarding the entry mode, which may include: * (1) The target product/market * (2) The goals of the target markets * (3) The mode of entry * (4) The time of entry * (5) A marketing-mix plan * (6) A control system to check the performance in the entered markets 1. Target Market Selection A crucial step in developing a global expansion strategy is the selection of potential target markets. A four-step procedure for the initial screening process: 1. Select indicators and collect data 2. Determine importance of country indicators 3. Rate the countries in the pool on each indicator 4. Compute overall score for each country 2. Choosing the Mode of Entry Decision Criteria for Mode of Entry: * Market Size and Growth * Risk * Government Regulations * Competitive Environment/Cultural Distance * Local Infrastructure Classification of Markets: * Platform Countries (Singapore & Hong Kong) * Emerging Countries (Vietnam & the Philippines) * Growth Countries (China & India) * Maturing and established countries (examples: South Korea, Taiwan & Japan) Key criteria for choosing entry modes: * Company Objectives ...
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...Global Marketing Management 1 Global Market Entry Strategies 2 Overview Target Market Selection Choosing the Mode of Entry Exporting Licensing Franchising Contract Manufacturing Joint Ventures Wholly Owned Subsidiaries Strategic Alliances 3 1. Target Market Selection A crucial step in developing a global expansion strategy is the selection of potential target markets. A four-step procedure for the initial screening process: 1. Select indicators and collect data 2. Determine importance of country indicators 3. Rate the countries in the pool on each indicator 4. Compute overall score for each country 4 Choosing the Mode of Entry Sample Decision Criteria: Mode of Entry Market Size and Growth Risk Regulatory Environment Competitive Environment Local Infrastructure Tax Breaks… 5 2. Choosing the Mode of Entry (contd.) • Emerging Countries (Vietnam, the Philippines) • Growth Countries (China, India) • Maturing and established Countries (South Korea, Taiwan, Japan) Company Objectives Need for Control Internal Resources, Assets and Capabilities Flexibility 6 2. Choosing the Mode of Entry (contd.) Mode of Entry Choice: A Transaction Cost Explanation Transaction Cost Analysis (TCA) Transaction-Specific Assets 7 3. Exporting Indirect Exporting Cooperative Exporting Piggyback Exporting Direct Exporting 8 4. Licensing Licensor and the licensee...
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...Market Entry Mode Strategies – A study of Bangladesh Mobile Telecommunication Market for Foreign Companies Authors: Debashish Barua Examiner: Prof. Anders Pehrsson Marketing, Master Programme Tutor: Prof. Mosad Zineldin Mahmudur Rahman Chowdhury Subject: Master Thesis, 4FE02E Marketing, Master Programme Level and Semester: Master, Spring, 2014 i Acknowledgement We express our gratitude to those people who helped us a lot in conducting the research work successfully. Their cooperation helped us to write a good thesis paper. We are grateful to our tutor Prof. Mosad Zineldin and examiner Prof. Anders Pehrsson who have provided valuable critiques, encouraged and guided us to write the thesis paper in right direction. Moreover, we would like to thank the three mobile telecom companies which have provided valuable information in conducting the research work. Finally, we would like to thank to our family members and friends for their motivational support throughout the study. Linnaeus University, Växjö School of Business and Economics June 2014 Debashish Barua Mahmudur Rahman Chowdhury ii Abstract Title: Market Entry Mode Strategies – A study of Bangladesh Mobile Telecommunication Market for Foreign Companies. Background: Now-a-days, the forces of globalization derive firms to go to international market. When a firm thinks to expand its business outside of the home market, it needs to explore the form of operation through which it will enter into the foreign market. International...
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...approach HOW? Source: Exploring Strategy, 9th edition, Pearson, 2011 Inside-out approach Incentives and basic benefits of internationalisation Incentives Basic Benefits Extend a product’s life cycle Increased market size Gain easier access to raw materials Economies of scale and learning Opportunities to integrate operations on a global scale Location advantages To support strategic orientations! Opportunities to maximize the ROI (e.g. rapidely developing technologies) Get access to consumers in emerging markets Source: Ireland, Hoskisson and Hitt, The Management of Strategy, 2011 Outside-in approach: Internationalisation drivers Why going international? The YIP’s matrix (Inter-country compensation of competitive rivalry) Drivers of internationalization Source: Pearson, Adapted from G. Yip, Total Global Strategy II, Financial Times Prentice Hall, 2003, Chapter 2 Inside-out approach: Location advantage - Porter’s diamond Porter’s Diamond: explains why some locations tend to produce firms with competitive advantages in some industries. Inside-out approach:...
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...Ulset Title: International Modes of Entry Subtitle: The Case of Disney By, Carlos Gonzalez Hernandez This thesis was written as a part of the master program at NHH. Neither the institution, the supervisor, nor the censors are -through the approval of this thesis- responsible for neither the theories and methods used, nor results and conclusions drawn in this work. International Modes of Entry: The Case of Disney 1 Abstract The case of Disney’s theme parks represents an opportunity to test major internationalisation theories in a setting of large investments with little chance for reversal of commitments. The purpose of the research is to study the benefit of different entry modes dependent on Disney’s Theme Parks value-generating resources and capabilities while conditioned to certain local industrial and institutional conditions in foreign markets. Five major theories and frameworks were used to analyze all four Disney’s ventures abroad. This resulted in 20 individual hypotheses analyzed. Results indicate that Disney followed a predictable internationalisation process in the cases of Tokyo, Hong Kong and Shanghai, but that it went off-path in the Paris one. In successful cases Disney followed a cautious approach, involving local partners to transfer and adapt the “Disney Experience”. In the case of Paris the company decided to enter the market alone, which neglected the unique needs of the local market. Page | 2 International Modes of Entry: The Case of Disney Table...
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...International Market Entry strategy for AmStar-Europe by José Meester February 2008 - September 2008 Graduation committee: Internal supervisors: - P. Bliek (Chairman) - M. Ehrenhard (Member) External supervisor: - P. Binkhorst (Member) Master Thesis AmStar-Europe José Meester Management summary The topic of the thesis is developing an International Market Entry strategy for AmStar-Europe to enter Europe. AmStar-Europe is a new company with no experience abroad and needs an International Market Entry strategy plan to guide the penetration of the European market. The following recommendations are found: • Enter Denmark through direct export and focus on AffaldVarme Århus, Forbrændingsanlægget REFA, Roskilde Forbrænding and I/S vestforbrænding first, because they are open to new technology’s and responded quickly. Focus on persons who make (big) investment decisions, analysed in table 14 and sell the AmS 8** coating through personal selling. • Develop references for potential customers by providing current customers with small samples. These samples provide knowledge about the product and wordof-mouth can distribute this knowledge into the market. • Use trade shows and seminars to build awareness, show references, meet new customers and maintain your relationships with current customers. Frequently visit Denmark to maintain the relationships and to keep informed. AmStarEurope should keep up to date when it comes to environmental...
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...Hunter Boot Ltd. Case Study Report INDEX 1 Introduction 3 1.1 History of Hunter Boot Ltd. 3 1.2 Hunter Boot Ltd. today 4 2 Comparative and competitive advantage 4 2.1 Comparative advantage 4 2.2 Competitive advantage 5 2.3 Hunter Boot Ltd. and competitive advantage 5 3. Market screening 6 3.1 Asian market 7 3.2 Screening criteria for Hunter Boot Ltd.’s selection of new markets in Asia 7 4. Market Entry Mode 7 4.1 Hunter Boot Ltd. and entry mode 8 5. The 4 P’s of Marketing 9 5.1 Hunter Boot Ltd.’s two most important P’s 10 5.1.1 Product 10 5.1.2 Pricing strategy to differentiate Hunter products 11 6. Conclusion 11 References 12 1 Introduction This paper looks into different aspects of Hunter Boot Ltd. and its possible expansion to the Asian market. The paper’s content is based on a case study prepared for a Webinar April 12th 2013. The report goes through Hunter Boot Ltd.’s history, theories of comparative and competitive advantages, market screening criteria, Asian market, entry modes and how Hunter Boot Ltd. could apply these theories in order to enter Asian market. Lastly, the report is finished with a short summary of the subject. In recent years, an increasing number of key industries such as automobile and motorcycle production, agricultural equipment, aerospace, military hardware, telecommunication, electronics and luxury consumer goods have become global in scope. Firms in these industries originate,...
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...International Review of Business Research Papers Vol.3 No.1. March 2007, Pp.183 - 196 Entry Modes For International Markets: Case Study Of Huawei, A Chinese Technology Enterprise Donglin Wu* and Fang Zhao** This case study analyses and discusses the internationalization process of Huawei, a leading telecommunication equipment manufacturer in China. Our research aims to explore the special features of the internationalization of Chinese hi-tech firms through a case study and to identify the factors that affect Chinese hi-tech firms’ international entry mode decision. In this paper, several foreign market entry modes were discussed. Issues of why and how to take into account the factors of industrial characteristics, environmental factors, firm factors, and moderators for internationalization and how to employ different entry modes in different host markets are discussed and illustrated based on this case study. It is found that industrial characteristics and home country’s technological reputation affect to a great extent the internationalization path of the hi-tech firm studied. The research also shows that in terms of hi-tech enterprises’ internationalization, the factors such as international experience and firm size are not as important to traditional manufacturers as to hi-tech enterprises. Field of Research: Management 1. Introduction After two decades’ development, many Chinese technology enterprises stride their first step in internationalization. Among them...
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...International entry Strategies ERP Risk management Page 2. LAW: CISG 3 IPL Problems INCOTERMS 2000 Page 7. Marketing 4: Perception, Motivation and learning Attitudes, personality and lifestyle Group influence and opinion leadership Page 10. Simon Roland Hermans Page 2 of 20 International entry strategies Market entry strategy chapter 9 Hollensen Types of entry modes are: Export Intermediate Hierarchical Rules for selection: Naïve rule Pragmatic rule Strategy rule Factors that affect foreign market entries: Internal factors Desired mode characteristics Transaction specific factors External factors Internal factors are: Product Experience Size Desired mode characteristics: Risk averse Control Flexibility Transaction specific factors affecting: Tacit nature of know how Opportunistic behavior vs transaction costs External factors influencing the strategy are: Sociocultural distance Country risk/demand uncertainty Market size /growth Simon Roland Hermans Page 3 of 20 Direct/indirect trade barriers and regulations Intensity of competition Number of intermediaries Major types of exporting: Indirect export Direct export Cooperative export Indirect export modes: Sale is like a domestic Most appropriate for firms with limited expansion objectives Indirect entry mode: Export buying agent Broker Export management company Trading company Direct entry modes: Export...
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...Entry Mode Strategy for Jollibee into Australia Table of Contents Executive Summary 2 Introduction 4 The Jollibee Phenomenon 4 Overseas Expansion and Modes of Entries 4 Company Analysis 5 Values – Mission – Vision 5 Distinctive competence 8 Foreign Market Analysis 9 The Australian Economy 9 Legal and Political Environment 9 Entry mode selection 11 Conclusion and recommendations 14 Reference list 17 Executive Summary Jollibee Foods Corporation (JFC) is a highly successful Philippines’ based food services company that operates over 1,700 stores locally and internationally. JFC has developed its international business over three distinct strategies. Its corporate strategy is one of related diversification into the fast food, restaurant and bakery sectors of the food industry. Its international business strategy focuses on establishing market share by acquisition, joint venture and franchising, often by initially targeting high Filipino population centres, and also in differentiation by localizing their menus to suit various cultural tastes in all their overseas markets (Jollibee 2009a). JFC has successfully adopted a transnational strategy being able to combine the benefits of global scale efficiencies in its regional management business model with the benefits of local responsiveness by adapting for local tastes. It depends on an integrated network and teamwork to drive the needs of the marketplace and the need to be competitive...
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...report on Modes of Entry into Foreign Markets. Sir, It’s been pleasure for me to submit my report on “Modes of Entry into Foreign Market”. This report contains the structure and material as instructed by you. I have tried hard to do my best and fulfill your expectation. The assigned work and the information gathering process involved with it gave me access to the areas, which I didn’t know before. However it is needless to say that, there may be some mistake in my organization, presentation and style. In completing the report I have tried my best in imparting ever available details of the, “Modes of Entry into Foreign Market” avoiding unnecessary amplification of the report. Thanking you, Yours faithfully Md.RazibulMatin ID. No: 801414091 EMBA Program Department of International Business University Of Dhaka. Table of Content SL NO. | TOPIC NAME | PAGE NO | | Letter of Transmittal | 1 | | Executive summary | 3-4 | Chapter-1 | Introduction | | 1.1 | Problem of Modes of Foreign Markets Entry | 5-6 | 1.2 | Rationale for Modes of Foreign Markets Entry | 6 | 1.3 | Scope and Objectives of the study | 6-7 | 1.4 | Methodology of the Study | 7 | 1.5 | Limitation of The Study | 7 | Chapter-2 | Literature Review | 8 | Chapter-3 | Modes of Entry into Foreign Market | | 3.1 | Market entry strategy | 9 | 3.2 | Market Entry Modes | 10 | 3.2.1-3.2.7 | Different Markets Entry Modes | 11-16...
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...product and factor markets extend beyond the boundaries of a single country. 2. However, most companies start operations as domestic companies and for achieving their profit objectives they develop first a domestic strategy. The options for a domestic strategy may include: (a) Investment in product development; (b) Expansion of the domestic market share; and, (c) Diversification into new industry. B. The firm’s foreign business strategy 1. There are 6 main steps in the firm's foreign business strategy: (a) the firm’s evaluation; (b) selection of a target market (country/region); (c) selection of product to make/sell in target market; (d) selection of market entry-entry mode (exporting, franchising, licensing, sub-contracting, joint ventures or wholly owned companies); (e) Business plan development and execution; (f) Monitoring and evaluation of results. 2. Exporting has the advantage of low costs and risks, avoiding the costs of setting up manufacturing operations in another country. The business plan in the case of exporting can take the form of an export marketing plan. 3. The main advantage of licensing is represented by the low costs for the franchisor because the franchisee bears the costs and risks of opening a new market; the main disadvantage is the risk for the franchisor of losing the control over technology. 4. The main advantage of franchising is that the franchisee bears the costs and risks of opening a foreign market. The main disadvantage is the lack of control...
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...venture, acquisition or merger with regard to selected target markets. This brochure informs you of our approach. DeRuiter Consultancy: The Development of an International Business Strategy 2 IN WHICH DEVELOPMENT PHASE IS YOUR COMPANY ? Few opportunities for exports Active export marketing from home country Limited foreign investment Major dependence on international business Multinational : no distinction between home and export markets WHY GO INTERNATIONAL? Global competition will increase. The European Union, notwithstanding the obstacles will more and more become a single market and notwithstanding cultural differences dominating for a long period. European companies have to strengthen their international activities. US and Japanese firms try to obtain market shares in the European market. Businesses in the former “Eastern Block” countries and in the fast upcoming “Newly Industrialising Countries” will increasingly export finished products worldwide at competitive prices and certainly within some time on a large scale at international accepted quality levels. In our present world 20 % of the total population, living in the industrialised countries, consume 80 % of the total global industrial production....
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