Facing Foreign Market Turbulence: Three Swedish Multinationals in                     Iran

While foreign market entry and expansion has attracted much international business research, few have studied the contraction of foreign market operations and exit from foreign markets when MNCs face market turbulence and decline. This article uses a process perspective to examine the responses of three Swedish MNCs to the dramatic changes in the Iranian market during the turbulent period 1975 - 1992. It bases a view of foreign market contraction and exit on the theory of the internationalization process of the firm, and asks whether this can help us understand the firm's behavior in the face of a turbulent foreign market environment.

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Internationalization Process Perspective

The Oxford Handbook of International Business Strategy ◽

10.1093/oxfordhb/9780198868378.013.7 ◽

2020 ◽

pp. 132-152

Author(s):

Grazia D. Santangelo

Keyword(s):

Foreign Market ◽

Foreign Market Entry ◽

Internationalization Process ◽

Uppsala Model ◽

Strategic Assets ◽

Process Perspective ◽

National Boundaries ◽

First Time ◽

Gain Access ◽

Cross National

To manage the increasing competition in their home markets, firms need to go international and seek new markets, improve their efficiency, acquire natural resources, and (or) gain access to strategic assets. Irrespective of the motivations driving the decision to cross national boundaries, firms face the challenge to plan their internationalization process (IP) effectively. This chapter offers an overview of the IP perspective starting from the original formulation of the IP—or Uppsala— model (Johanson & Vahlne, 1977) to its latest revision (Vahlne & Johanson, 2017) and the open-ended debate that this revision continues to stimulate. It then discusses how firms acquire market knowledge for the first-time versus subsequent internationalization, and why they may change their market commitment after the initial foreign market entry.

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Effectuation and foreign market entry of entrepreneurial firms

European Journal of Marketing ◽

10.1108/ejm-11-2013-0630 ◽

2015 ◽

Vol 49 (9/10) ◽

pp. 1436-1459 ◽

Cited By ~ 53

Author(s):

Sylvie Chetty ◽

Arto Ojala ◽

Tanja Leppäaho

Keyword(s):

Decision Making ◽

Market Entry ◽

Foreign Market ◽

Foreign Market Entry ◽

Decision Making Process ◽

Entrepreneurial Firms ◽

Internationalization Process ◽

Foreign Markets ◽

Content Type ◽

Original Field

Purpose – The purpose of this study is to examine the decision-making process for entrepreneurial firms when entering foreign markets and how and why they entered those markets. Design/methodology/approach – A nascent theory in entrepreneurship called effectuation is combined with internationalization process theory as the conceptual framework to study decision-making under uncertainty. The central concept in both these theories is relationships and how they can be used to gain knowledge and thus reduce uncertainty and in the case of effectuation to co-create opportunities to enter foreign markets. The research design involves a multiple case study of software firms from Finland and New Zealand. Findings – It was found that entrepreneurs differentiate between foreign market selection and foreign market entry during their internationalization process, potentially using different decision-making processes in them. They tend to interweave effectuation and causation logics as substitutes in their decision-making. Uncertainty during foreign market entry is not always a barrier because it can provide opportunities depending on the logic used. In addition, there is evidence that entrepreneurs who have existing relationships in foreign markets tend to use effectuation to select and enter foreign markets. Originality/value – This paper transposes effectuation from its original field of entrepreneurship research to the context of internationalizing entrepreneurial firms. Consequently, it contributes toward understanding the decision-making process for selecting and entering foreign markets.

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Understanding incubation during foreign market entry: lessons learnt from an illustrative Danish case study

Journal of Business and Industrial Marketing ◽

10.1108/jbim-05-2019-0198 ◽

2020 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Susanne Gretzinger ◽

Anna Marie Dyhr Ulrich ◽

Svend Hollensen ◽

Birgit Leick

Keyword(s):

International Business ◽

Foreign Market ◽

Foreign Market Entry ◽

Business Incubation ◽

Foreign Markets ◽

Content Type ◽

Bric Countries ◽

Market Expansion ◽

Business Networking

Purpose This paper aims to discuss business incubation to enter foreign markets in Brazil, Russia, India and China (BRIC) countries through the lens of an “international business incubator” (IBI). International market expansion offers huge opportunities for companies to increase their revenue, but there are also challenging tasks such as the establishment of a business company and the occupation of a strategic position abroad. Practitioners consider this process as the act of incubation, but the theoretical discussion lags behind the practice-led debate. Design/methodology/approach An illustrative, and theory-led, case study is presented that describes market expansion to BRIC countries through a network-based IBI. The empirical case is an illustrative Danish company with international operations in BRIC countries both with and without an IBI. Findings International business incubation represents a process, which can be influenced through an IBI, and business networking during foreign market entry is shaped by IBI brokerage (bridging, bonding and protecting) in different phases. IBI activities that are embedded in business networking support a company’s endeavours in getting a foothold and acquiring a strategic position in BRIC markets and facilitates the market penetration. Research limitations/implications The IBI’s activities to enter foreign markets should be thoroughly managed. Further studies should be conducted with cross-case comparisons and larger samples to reflect on the propositions established. Originality/value By linking the business networking theory with the practice-led understanding of business incubation, the study explores an under-conceptualised topic for international business and entrepreneurship scholars. The paper offers an initial understanding of how brokerage interacts with incubation during the entry of new markets.

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