This paper examined issues surrounding foreign entry decisions. Essentially, the paper determined why and how a company makes a decision to enter a foreign market. The study was descriptive and data were sourced from various books, trade journals, publications and internet sites etc. The study revealed that foreign market entry strategy is an important strategic decision for international business units. The choice of foreign market entry strategy is to be made very cautiously as it has long-term implications, and it cannot be easily reversed. The study found that the future growth of international business unit depends upon the right mode of entry into foreign market.
As revealed in the study there are three main modes of entry into foreign market namely: Trade mode, investment mode and contractual entry mode. In trade route, the entry in foreign market is made through exports. In investment mode, the subsidiary units are set up in the foreign market. This mode is also called foreign direct investment mode. In contractual entry mode, technological collaboration agreements are made with the business units of host nation. In this mode, technical skills/managerial skills are provided by business unit in parent country to business units in host country. Besides these three main strategies for entry into foreign markets. The choice of the appropriate strategy depends upon various factors like availability of resources, level of risk, tariff and non-tariff barriers imposed by other nations, transportation cost, infrastructure facilities, vision of management, restrictions on inflow/outflow of foreign investment.
A key conclusion in the study is that there are different motives for an entry on a foreign market. The different motives that are stated in the study have common denominator which is that they can all lead to increased profit in the long run. The study suggests that in order to make an effective foreign market entry decision, firms and international business practitioners should apply the foreign-market-entry-model. They should also highlight those factors that have been found to be of most importance while entering a foreign market.
Table of Contents
- Introduction
- Literature Review
- Timing and Scale
Objectives and Key Themes
This paper aims to examine the factors influencing foreign market entry decisions by companies. It explores the "why" and "how" of international expansion, analyzing various entry modes and their associated risks and rewards.
- Foreign market entry strategies
- The impact of timing and scale of entry
- Analysis of different entry modes (trade, investment, contractual)
- Factors influencing the choice of entry mode (resources, risk, barriers, etc.)
- Long-term profit potential in foreign markets
Chapter Summaries
Introduction: This introductory chapter sets the stage for the study by highlighting the increasing popularity of foreign market entry and its importance in global business. It emphasizes the crucial role of selecting an appropriate entry mode and briefly touches upon the key decisions involved in foreign market expansion, such as market selection, timing, scale, and mode of entry. The chapter establishes the context for the subsequent exploration of various aspects of foreign market entry strategies and their implications for international business units.
Literature Review: This chapter delves into existing research and literature on foreign market entry decisions. It lays the groundwork for the study by summarizing key findings and perspectives from various scholars and publications regarding different aspects of international business expansion. The review will likely address topics such as the benefits and drawbacks of early versus late entry, the impact of scale, and the diverse range of entry modes available to multinational firms. This section provides a framework for understanding the complexities of foreign market entry and serves as a basis for the subsequent analysis.
Timing and Scale: This chapter focuses on two critical decisions in foreign market entry: timing and scale. It examines the trade-offs between early and late entry, highlighting the first-mover advantages of early entry such as brand establishment and market share acquisition, but also acknowledging the potential pioneering costs and risks involved. The chapter further explores the strategic implications of large-scale versus small-scale entry, weighing the benefits of rapid market penetration against the reduced risk and flexibility of a gradual approach. The discussion likely considers how these choices impact competitiveness and long-term success in the foreign market.
Keywords
Foreign Entry Decision, Foreign market, International Business, Mode of Entry, Timing, Scale, Profit Potential, Risk, Resources, Barriers.
Frequently Asked Questions: Comprehensive Language Preview
What is the purpose of this document?
This document provides a comprehensive preview of a paper examining factors influencing foreign market entry decisions by companies. It includes a table of contents, objectives and key themes, chapter summaries, and keywords.
What topics are covered in the "Objectives and Key Themes" section?
This section outlines the paper's aim to analyze foreign market entry decisions, exploring entry modes, associated risks and rewards, the impact of timing and scale, and factors influencing mode selection (resources, risk, barriers). It also addresses the long-term profit potential in foreign markets.
What are the main chapters and their respective focuses?
The paper consists of an Introduction setting the context of foreign market entry and its importance; a Literature Review summarizing existing research on foreign market entry decisions; and a chapter on Timing and Scale, analyzing the strategic implications of early vs. late entry and large-scale vs. small-scale entry.
What are the key themes explored in the "Introduction" chapter?
The introduction highlights the growing importance of foreign market entry in global business, emphasizing the crucial role of selecting an appropriate entry mode and the key decisions involved (market selection, timing, scale, and mode of entry).
What does the "Literature Review" chapter cover?
This chapter summarizes key findings and perspectives from existing research on various aspects of international business expansion, including the benefits and drawbacks of early versus late entry, the impact of scale, and the range of entry modes available to multinational firms.
What are the main points discussed in the "Timing and Scale" chapter?
This chapter examines the trade-offs between early and late entry, considering first-mover advantages versus pioneering costs and risks. It also analyzes the strategic implications of large-scale versus small-scale entry, weighing rapid market penetration against reduced risk and flexibility.
What are the key words associated with this paper?
Key words include: Foreign Entry Decision, Foreign market, International Business, Mode of Entry, Timing, Scale, Profit Potential, Risk, Resources, Barriers.
What type of audience is this preview intended for?
This preview is intended for an academic audience interested in learning about the themes and structure of the research paper on foreign market entry strategies.
What is the overall goal of the research paper?
The research paper aims to provide a comprehensive analysis of the factors influencing companies' decisions regarding foreign market entry, offering insights into strategic choices and their consequences.
Where can I find more information about this research?
Further details regarding the research paper would be found within the full publication of the paper itself.
- Citar trabajo
- Dr. Newman Enyioko (Autor), 2020, Foreign Entry Decision And Global Export Business. Foreing Market Decisions, Múnich, GRIN Verlag, https://www.grin.com/document/978328
