A PARADOXICAL RELATIONSHIP BETWEEN CULTURAL DISTANCE AND FOREIGN MARKET ENTRY STRATEGY: A CASE OF KOREAN COMPANIES

PurposeFew researchers and even fewer practitioners would deny that serendipitous events play a central role in the growth process of firms. However, most international marketing models ignore the role of serendipity in the opportunity discovery process. The authors provide a nuanced view on international opportunities by developing the role of serendipitous opportunities in the foreign market entry process. The authors develop a model integrating the notions of serendipity, entrepreneurial logic, experiential knowledge and network knowledge redundancy. From the study’s model, the authors condense three sets of hypotheses on the relationships among experiential knowledge and entry strategy, network knowledge redundancy, entry strategy and serendipity.Design/methodology/approachThe authors confront the study’s hypotheses with data collected on-site at 168 Swedish firms covering 234 opportunities, and to test the hypotheses, the authors ran ordinary least squares (OLS) regression tests in three steps.FindingsThe results of the study’s analysis reveal that experiential knowledge and network knowledge redundancy both lead to a logic based on rigid planning and systematic search, which in turn reduces the likelihood that serendipitous opportunities will be realized in the foreign market entry process.Originality/valueThis is the first study that develops a measure of opportunities that are the outcome of serendipitous events. In addition, the authors integrate network and learning theories and internationalization theory by establishing antecedents to, and outcomes of, the entry strategy.

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Internationalisation by Business Services: A Methodological Critique of Foreign-Market Entry-Mode Choice

Environment and Planning A Economy and Space ◽

10.1068/a270683 ◽

1995 ◽

Vol 27 (5) ◽

pp. 683-697 ◽

Cited By ~ 23

Author(s):

P N O'Farrell ◽

L Moffat ◽

P A Wood

Keyword(s):

Market Entry ◽

Service Sector ◽

Cultural Distance ◽

Mode Choice ◽

Entry Mode ◽

Foreign Market ◽

Foreign Market Entry ◽

Business Services ◽

Entry Mode Choice ◽

Foreign Market Entry Mode

In this paper the work of geographers, economists, and management scientists in studying interregional and international expansion by service companies is reviewed. A critique is presented of some of the fundamental methodological problems inherent in analysing foreign-market entry-mode choice. These are particularly apparent when studying the process of business service-sector internationalisation. Issues discussed include inconsistencies in the definition of which entry decision to analyse; the level of aggregation to adopt when modelling mode choice; mode choice and cooperative organisational networks; different approaches to measuring cultural distance and country risk; and the methodologies used to develop scales to represent the constructs relevant to internationalisation.

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Acquisitions or Joint Ventures: Foreign Market Entry Strategy of U.S. Advertising Agencies

Journal of Media Economics ◽

10.1207/s15327736me1701_3 ◽

2004 ◽

Vol 17 (1) ◽

pp. 35-50 ◽

Cited By ~ 22

Author(s):

Jaemin Jung

Keyword(s):

Joint Ventures ◽

Market Entry ◽

Foreign Market ◽

Foreign Market Entry ◽

Advertising Agencies ◽

Entry Strategy

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The Effects of Foreign Market Entry Strategies on Financial Performance of Listed Multinational Firms in Kenya

European Journal of Business Management and Research ◽

10.24018/ejbmr.2021.6.3.517 ◽

2021 ◽

Vol 6 (3) ◽

pp. 216-225

Author(s):

C. Smith ◽

M. Ogutu ◽

M. Munjuri ◽

J. Kagwe

Keyword(s):

Financial Performance ◽

Market Entry ◽

Multinational Firms ◽

Foreign Market ◽

Foreign Market Entry ◽

Foreign Firms ◽

Policy Makers ◽

Entry Strategies ◽

Internationalization Theory ◽

Entry Strategy

The objective of this study was to establish the effects of foreign market entry strategies on the financial performance of listed multinational firms in Kenya. Internationalization theory was used as the theoretical foundation of the study. Empirical studies reviewed revealed that several studies had been done on the direct relationship between performance of multinational firms and their modes of entry into foreign firms. However, none of these studies focused on the financial performance of listed multinational firms. The study utilised a cross-sectional descriptive design. Secondary data collected from firms’ annual reports and financial statements for a period of four years (2014 to 2017) was used. The firms’ financial indicators of Sales Growth, Return on Equity, Return on Assets and Return on Capital Employed were employed to measure their performance. Franchising, exporting, wholly owned subsidiary and acquisitions were assessed as the entry strategies used by multinational firms. Data was collected from all the 62 listed multinational companies in Kenya and analysed using quantitative methods. This analysis was most preferred for data collected was quantitative in nature. The relationship between the independent and the dependent variable was tested using simple linear regression. The results show that the performance of multinational firms operating through franchises and as wholly owned subsidiaries as well as acquisitions was lower than the performance of multinationals operating as export companies. The study concludes that the mode of entry into foreign markets chosen by a firm significantly affected its financial performance in the said market. It is therefore recommended that multinational firms wishing to expand their operations globally to come up with long term strategies that have gone through rigorous scrutiny for the benefit of the firm. The study gave a contextual understanding of the internationalization theory. The theory managed to emphasize on reasons why multinational firms should expand their operations beyond their national boundaries. Actual ingredients for policy makers to undertake a well thought through policy formulation to fully understand the importance of choosing the right entry strategy was provided for in the results. Recommendations of the study are that a thorough marketing evaluation of the country of interest should be undertaken to ensure that proper measures are put in place for the selection of an entry strategy that will address the goals and objectives of a firm. The study also recommends that employees of a firm who are at the forefront in the internationalization process should be well informed and trained ahead of the firm’s plans. Policy makers and advisories in countries are advised to streamline the processes of foreign firms’ registration so to attract foreign investors.

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