Factors influencing foreign market entry choice

Factors influencing foreign market entry choice by Aileen Kennedy Download PDF EPUB FB2

This paper concentrates on secondary sources of research regarding the internationalisation of businesses. According to the previous literature, scholars have already found out some of determinants. The most crucial decision that an MNC has to make when entering a foreign market is the choice of the most optimal mode of entry as it will have a bearing on the company’s success.

A firm must assess a number of internal and external factors while. In the associated paper “Selecting overseas markets and entry modes: two decision processes or one?”, it was proposed that market selection and market entry mode selection be looked upon as two aspects of one decision process.

Examines a wide spectrum of factor categories to be included in the proposed MEMS model and argues that an inclusive spectrum of analysis would make Cited by: Resource/commitment factors: The more abundant a company’s resources in management, capital, technology, production skills, and marketing skills the more numerous its entry mode options.

Conversely a company with limited resources is constrained to use entry modes that call for. According to Hollensen (), there are following external factors influencing company’s choice of foreign entry mode:  Socio-cultural distance  Country risk and demand uncertainty  Market size. The majority of past studies on the foreign market mode of entry have focused on manufacturing industries.

Although some studies have explored the entry mode decisions of the banking industry, most of them have adopted the case study method, and systematic studies have been relatively few.

Foreign market entry mode choice plays an important role in global business and is widely researched without reaching a consensus. The challenge continues as to rationalisation of foreign market entry mode choice.

Various models have been used to explain the factors that affect foreign market entry mode choice. Firms interested in servicing foreign markets face a difficult decision with regards to the choice of an entry mode.

The options available to a firm include exporting, licensing, joint venture and sole venture. Several factors that determine the choice of a specific foreign market entry mode have been identified in previous literature. These factors can be classified into three categories. Start studying Factors Affecting Market Entry Mode.

Learn vocabulary, terms, and more with flashcards, games, and other study tools. that promote preference for one product over another may allow a firm to absorb the higher costs of being in a foreign market How PESTL affects choice.

Abstract This paper investigates the factors that influence the choice of market entry modes in the African mobile telephony industry - currently, a popular international investment destination.

Using the survey methodology, the study focuses on six key enterprises, which account for over 60% of the cell phones in Africa. There will be a number of factors that will influence your choice of strategy, including, but not limited to, tariff rates, the degree of adaptation of your product required, marketing and transportation costs.

While these factors may well increase your costs it is expected the increase in sales will offset these costs. difficult decision with regards to the choice of an entry mode.

The options available to a firm include exporting, licensing, joint venture and sole venture. Several factors that determine the choice of a specific foreign market entry mode have been identified in previous literature.

These factors can be classified into three. A number of cultural differences can cause marketers problems in attempting to market their products overseas. These include: (a) language, (b) color, (c) customs and taboos, (d) values, (e) aesthetics, (f) time, (g) business norms, (h) religion, and (i) social structures.

One common factor in exporting is the need to translate something about a product or service into the language of the target country. This requirement may be driven by local regulations or by the company’s wish to market the product or service in a locally friendly fashion.

There are a lot of factors internal to companies which play a vital role in deciding the entry strategy choice. Some of these factors are psychic or cultural distance, centralization of decision-making, organizational culture, firm size, international experience and characteristics of the decision maker.

Chapter 5: Multiple choice questions. Instructions. internal and external factors that influence a firm's decision to initiate, develop, a firm's initial choice of international location and its mode of entry into foreign markets. Ravelomanana, F., Yan, L., Mahazomanana, C. and Miarisoa, L.

() The External and Internal Factors That Influence the Choice of Foreign Entry Modes at Wuhan Iron and Steel Corporation. Open Journal of Business and Management, 3, doi: /ojbm Internal Factors Influencing Choice of Foreign Entry Modes.

According to Brassington & Pettitt () [3], when the company decided which markets to enter, it must then decide how to enter them. A number of factors influence the choice of foreign market entry mode: ü Speed. ü Costs. ü Payback. ü Long-term objectives. This paper examines factors associated with international franchising firms’ entry modes when they enter the Chinese market.

To this end, a survey was conducted to investigate the linkage between entry modes and characteristics of franchising firms. The logit model and regression analysis were used to test the hypotheses. Findings reveal four factors that significantly influence.

One of the most critical decisions faced by multinational enterprises (MNEs) intending to undertake foreign direct investment (FDI) is the choice of foreign market entry mode. A large number of studies analyze the determinants of entry mode choice within the transaction cost framework proposed by Anderson and Gatignon ().

Findings – Three groups of factors were identified that influence entry mode choice in the fashion retail market: firm‐specific factors of asset specificity, brand equity, financial capacity, and international experience; country‐specific factors of country risk, cultural distance, and government restrictions; and market‐specific factors of market potential and market competition.

Nine. Assessment of Factors Influence Entry Mode Choice of Companies (Foreign Companies in Ethiopia) In today’s globalized world companies enter international market in different ways.

They face difficult decision with regards to the choice of entry mode since their choice of entry mode is influenced by different factors. Abstract The effect of some external and internal environmental and internal faectors on service firms' choice pf foreign market entry modes is investigated.

Hypotheses are developed their international oprations. These hyphothese are emperically tested using logistic regression with data collected from United State service firms. According to Aman (), the external factors consists of the international nature and attractiveness of the product category, turnarounds of periods between local and international market, the general potential of the chosen international market, government regulations and trade barriers and assistance presented by governments and other external stake holders in both the domestic and international markets.

foreign entry, such as: economic factors, political risk, legal factors, cultural factor, international experience, etc. A model can be outlined from the theoretical viewpoints about the advantages and disadvantage of each foreign market entry strategy discussed. One of the fundamental steps that need to be taken prior to beginning.

• Factors that affect the company’s choice to enter a foreign market but are independent of management’s decisions are called external factors. • External factors fall under two categories: – target country factors and – domestic country factors.

• Target country factors that should be considered when choosing a mode of entry include. Entry modes Factors influencing the entry mode decision Entry modes and culture Culture`s impact on market entry The learning perspective.

Negotiating styles. Market entry in China – the case of German firms General facts Cultural differences Problems when negotiating with the Chinese Obstacles for. The choice of entry mode into the Chinese market for Icebreaker has a major impact on the success of a firm's international operations.

Not only the company will explore a huge potential in China, but also require a big input from Icebreaker, such as finance, human capital, and all other resources. This paper presents a set of empirical findings about the factors influencing the entry mode choices of an international hotel company.

A case study approach was chosen for this study to investigate these issues and the data was collected utilising interviews, observations and secondary resources regarding the hotel organisation. influence individual factors might exert on entry mode decision making. For example, existing theories suggest that international experience is positively related to entry mode choice, i.e., the more international experience a company has, the higher its propensity to adopt a high equity entry mode (Davidson.

CLASS ACTIVITY #2 Glossary Quiz Match the keywords from today's presentation to their definitions. Differences Amongst Sectors CLASS ACTIVITY #1 Learning Objectives Case - South Africa Gaps in the Literature Factors Influencing Foreign Market Entry into a Developing Economy 1.

Be.The three factors that have a major impact in the marketing environment are given below − Global factors. The global factors that are outside of the control of individual organizations, but that can affect the way that businesses operate can be considered as the global factors affecting the international marketing environment.Market Size • Market size is a key factor when selecting a foreign market to enter.

• Countries with a large market size, in terms of population, per capital income and potential demand for your product or service, can justify those modes of entry with long-term commitment, requiring a higher level of investment, such as wholly-owned subsidiaries or equity participation.