Modes of Foreign Entry Essay examples

Modes of Foreign Entry Essay examples

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All research fully carried out on Entry nodes on the long run remain limited to large manufacturing firms. The foreign market selection and the choice of its entry modes drastically ascertain the performance of a specific firm. Entry mode can be defined as an arrangement for an organization that is organizing and conducting business in foreign countries like contractual transfers, joint ventures, and wholly owned operations (Anderson, 1997). Internationalization is part of a strategy which is going on for businesses and organizations transfers their operations across the national borders (Melin, 1992). The firm that is planning to have the operations across the border will have to choose the country that they are planning to visit. Anderson (1997) argues that the strategic market entry decisions forms a very important part of an organizational strategy. The decision to go international is part of the internationalization strategy of the firm. Multinational Corporations that desire to have international operations will find the strategy to go international, the mode of entry is very important. Even though there are studies which have shown that the main effect of being pioneers in a market promises superior performance in terms of market share and profitability than the late movers, Luo (1997) and other researchers have found out that the effect of the first mover may be conditional and will depend on the mode of strategy that is used (Isobe, & Montgomery, 2000). There are different strategies that MNCs can use to enter new foreign markets; they include exporting, licensing/franchising, full ownership and joint ventures. The mode of exporting entails a company selling its physical products which are usually manufactured outside the...

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...f national culture on the choice of entry mode. Journal of International Business Studies, 19(3), 411-432.
Luo, Y. (1997), Pioneering in China: Risks and Benefits, Long Range Planning, 30(5), 768 - 776
Melin, L. (1992). Internationalisation as a Strategy Process. Strategic Management Journal. 13, 99-118.
Shane, T. (2004). International strategies for expansion. NY: Cengage Learning.
Tallman, S., & Shenkar, O. (2004). International Cooperative Ventures Strategies: Outward Investment and Small Firms from NICs. Management International Review. Vol. 39 (5), 299-315.
Teece, D. (1986). Transaction Cost Economics and the Multinational Enterprises: An Assessment. Journal of Economic Behaviour and Organisation. 7, 21-45.
Zejan, M. (1990). New ventures or acquisitions: The choice of Swedish multinational enterprise. Journal of Industrial economics, 38(3), 349-355.

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