Topic > Foreign Entry Modes - 1603

All research fully carried out on entry nodes in the long run remains limited to large manufacturing enterprises. The selection of the foreign market and the choice of its entry methods drastically determine the performance of a specific company. Entry mode can be defined as an arrangement for an organization to organize and conduct business in foreign countries such as contractual transfers, joint ventures, and wholly owned operations (Anderson, 1997). Internationalization is part of an ongoing strategy for businesses and organizations that move their activities across national borders (Melin, 1992). The company that intends to carry out operations across borders will have to choose the country it intends to visit. Anderson (1997) argues that strategic market entry decisions constitute a very important part of an organizational strategy. The decision to internationalize is part of the company's internationalization strategy. Multinational companies that wish to have international operations will find the strategy to become international, the entry mode is very important. Although there are studies that have shown that the main effect of being a pioneer in a market promises superior performance in terms of market share and profitability compared to late movers, Luo (1997) and other researchers have found that the first mover can be conditional and will depend on the mode of strategy used (Isobe and Montgomery, 2000). There are several strategies that multinationals can use to enter new foreign markets; they include exporting, licensing/franchising, full ownership and joint ventures. The export mode involves a company selling its physical products which are usually manufactured outside… the paper medium… the national culture on the choice of entry mode. Journal of International Business Studies, 19(3), 411-432.Luo, Y. (1997), Pioneers in China: Risks and Benefits, Long-Term Planning, 30(5), 768 - 776Melin, L. (1992) . Internationalization as a strategic process. Strategic Management Journal. 13, 99-118. Shane, T. (2004). International strategies for expansion. NY: Cengage Learning.Tallman, S., & Shenkar, O. (2004). International Cooperative Business Strategies: Outbound Investment and Small Business from New Income Countries. International management review. vol. 39 (5), 299-315. Teece, D. (1986). Transaction cost economics and multinational enterprises: An evaluation. Journal of Economic Behavior and Organization. 7, 21-45. Zejan, M. (1990). New initiatives or acquisitions: the choice of the Swedish multinational. Journal of Industrial Economics, 38(3), 349-355.