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Based on face to face interviews with decision makers of 16 German firms Michael Klug analyses the applied strategy and the motivation for market entry. He investigates different strategy theories for their suitability to explain the firms' strategy abroad and discusses the operational design including forms of market presence and marketing mix to realise a chosen strategy.
There are many reasons why firms decide to extend their business operations by entering foreign markets. Whether it is a defensive step aimed at avoiding the consequences of saturating domestic markets or an offensive strategy based on the expectations of unusual profits, the most common market entry drivers are widely discussed and understood. What remains open is the most intriguing question of the selection of a particular market entry mode and the factors determining the right choice. On a theoretical ground the problem may be reduced to the issue of how many links of the Value Chain should be moved abroad in the process of international expansion. In practical terms the choice of a market-entry mode means a set of decisions taken in each particular case of a firm going international. The complexity of the task involves many different areas like the amount of risk, the scope of control, the level of capital involvement and financial efficiency. This is one of the reasons why there is no universal theory explaining the optimal way of making a successful market entry. The multitude of views on this subject does not make the question easier.
There are many reasons why firms decide to extend their business operations by entering foreign markets. Whether it is a defensive step aimed at avoiding the consequences of saturating domestic markets or an offensive strategy based on the expectations of unusual profits, the most common market entry drivers are widely discussed and understood. What remains open is the most intriguing question of the selection of a particular market entry mode and the factors determining the right choice. On a theoretical ground the problem may be reduced to the issue of how many links of the Value Chain should be moved abroad in the process of international expansion. In practical terms the choice of a market-entry mode means a set of decisions taken in each particular case of a firm going international. The complexity of the task involves many different areas like the amount of risk, the scope of control, the level of capital involvement and financial efficiency. This is one of the reasons why there is no universal theory explaining the optimal way of making a successful market entry. The multitude of views on this subject does not make the question easier.