Market entry mode

Question 1

Distinguish entry mod typology

Answer 1

Equity or non-equity

Question 2

Distinquish Equity and non-equity modes.

Answer 2

1. non-equity modes: (exports) low control, low risk, high flexibility;
2. intermediate modes (contractual modes): shared control and risk, split ownership;
3. Equity FDI modes (investment modes): high control, high risk, low flexibility.

Question 3

The market entry mode is about …

Answer 3

‘How to go there’

Question 4

Mention the three theoretical perspectives on entry mode:

Answer 4

Naive rule: One size fits all. Same entry mode for all foreign markets.

Pracgmatic rule: Custumized apparoach

Strategic rule: Systtematic assesment of potential entry modes

Question 5

Define international market entry:

Answer 5

an institutional arrangement necessary for the entry
of a company‘s products, technology, and human capital into a foreign country/market.
(Hollensen, 2012; p. 216

Question 6

How should the firm make a market entry?

Answer 6

Depends on the four theoretical perspectives on internationalization;

Question 7

How to enter acc. to the learning perspective:

Answer 7

Internal factors (firm size, international experience)

Transaction-specfici behavior (risk averse, control, flexibility)

Question 8

How to enter acc. to the inst.economic perspective:

Answer 8

Core concept: Cost-effectiveness

External factors
(Distance and country risk)
Tranaction-specific behavior:
(Tacit nature, oppotunistic behvioir, transaction csots)

Question 9

How is the value-chain perspective linked to the entry mode?

Answer 9

Adresses which funtion in the host market;

R&D, Production, Marketing, Sales & Services

Question 10

What is the value chain about?

Answer 10

A categorization of the firm’s activities providing value for the customers and profit for the company. The value chain includes both cost and value drivers.