Market Entry Strategies And Their Applicability To Smes The Winding Road To Foreign Business

Research Paper (undergraduate) from the year 2003 in the subject Business economics - Offline Marketing and Online Marketing, grade: 1,9 (B+), Heidenheim University of Cooperative Education (Economic - International Commerce), course: International Commerce, language: English, abstract: “There will be hunters and hunted, winners and losers. What counts in global competition is the right strategy and success.” Heinrich von Pierer1 In business planning the globalization of the world market and the limits of domestic growth raise the question to what extent a foreign commitment should be considered if at all.2 In Germany these considerations are particularly underlined by the strong integration into the world economy. German enterprises obtain a third of their total revenue in foreign business, 25 % of all jobs depend on foreign trade.3 Contrary to expectations, going global is no longer subject only to large multinational companies. Due to saturation tendencies in the domestic market, global competition and the dependency on international key-account customers small and medium-sized enterprises (SMEs) have been faced with the need for international activities. 4 Considering the fact that SMEs account for 97,3 % of all German enterprises, generating almost 45 % of the total revenue per year, the importance of future growth potential becomes evident.5 In general, SMEs are referred to as the “backbone” of German economy and many of them, the so called “hidden champions” have successfully faced the challenge of entering foreign markets.6 Others have been afraid to take this step. For these, the need for adaptation remains and their continuity will depend on the competitiveness in the world market. In general, entering new markets is connected with a multiplicity of chances and risks. SMEs especially, tend to underestimate the importance of profound information and the need for a realistic estimation of own capabilities.7 Accordingly, it becomes necessary to focus on a SME specific approach which considers major evaluation criteria for carefully developing market entry strategies. 1 Dr. Heinrich von Pierer, President and Chief Excecutive Officer of Siemens AG: Quotation cp. ‘TheGlobalist’ (2000) 2 cp. Hoppen (1999:144) 3 cp. Statistisches Bundesamt (2001:1.6) 4 Due to the IFM in Bonn (2000) SMEs intend to increase their foreign sales from an actual average of 30 % to 50 % in 2020 5 cp. IMF Bonn (2000) 6 cp. Hibbert (2000:1) 7 cp. Brenner (1999:2 et sqq.)

Seminar paper from the year 2019 in the subject Business economics - Business Management, Corporate Governance, grade: 1,7, University of applied sciences Frankfurt a. M., course: Strategic Management, language: English, abstract: This paper focuses on different internationalization strategies for small business. The current term paper should explain the basics by defining the essential terms. Subsequently, reasons and motives for internationalization strategies listed for small business. As a result, conceivable market entry forms are to be set out with their advantages and disadvantages. Based on the strategy forms, the opportunities and risks that could arise for small and medium-sized enterprises (SMEs) in an international market entry strategy are then highlighted. Finally, in the last chapter, a conclusion is drawn and daring a look into the future for the small business. Internationalization has undergone a dynamic development in the past three decades. The main driving force were the political changes in the world. This political opening also led to a disproportionate growth in the world trade. These changes also affect small and medium-sized companies and are a current challenge, that should be raised, which is also reflected in the close ties, between the Term middle class and foreign trade shows. The globalization of the economy is forcing medium-sized companies to rethink and restructure their business processes and value chains. However, SMEs lack specific prerequisites for carrying out international business activities. Not just capital and management but also the knowledge of internationalization is a significant success factor. Nevertheless, SMEs can develop opportunities and successfully translate them into an international activity that, especially because of its niche strategy, aims to meet the special needs of international clients that can not satisfied by large companies A niche production or export, however, is not enough to assert oneself against international competitors in the long term. That is why influences like use of technical advances, short product cycles and fast and active presence abroad to internationalize the value chain of the company. For a successful and targeted internationalization strategy for small business, it should be necessary to create a concept that includes motives, market entry forms, possible potentials and conceivable obstacles.

Diploma Thesis from the year 2006 in the subject Business economics - Supply, Production, Logistics, grade: Sehr Gut, FH Oberösterreich - Campus Steyr (Produktion und Management (PMT)), language: English, abstract: The business world at the beginning of the 21st century is characterised by a steadily increasing globalisation and the growth of international business operations. The proceeding dynamism of the global markets creates new chances not only for multinational enterprises but also for small- and medium sized companies (SMEs). Particularly, the above-average economic potential of emerging markets, especially in many countries of the Asia-Pacific region, is amongst others the leading incentive for the increasing number of cross-border expansions. In this context, the decision for the appropriate market entry strategy is already one of the most difficult ones within the broad topic of international marketing, whereas the choice of target countries with tremendous cultural differences and the specifics of the industrial goods business respectively, lead to an even higher degree of complexity in the decision for the most suitable form of organisation for the international market entry. The main task of this thesis was to break down the untargeted theory of the market entry modes to the evaluation of a situational context of a genuine company with the help of abstract focus areas in a step-by-step approach. Starting with a general overview to the topic area of interational marketing and further the alternative market entry modes, the thesis introduces three focus areas with an anticipatory relation to the case study: ‘The Asia-Pacific region, SMEs and the industrial goods business’ stand in the centre of the examination. The core of this thesis represents a feasibility study related to the focused perspective, in which every market entry mode is investigated in its compatibility with the focus areas. The result of the study, in other words the identification of all feasible entry mode alternatives regarding the focus areas, establishes the basis for the implementation of the case study of the German AdPhos Plc., a medium sized company in the industrial goods business and its penetration of new markets in Asia. As the second core part of this thesis follows the evaluation of AdPhos’ market entry decision with means of a scoring model, whereas AdPhos’ decision for a strategic alliance is confronted with all other feasible market entry alternatives. The hereby extracted results deliver information to the suitability of the chosen organisation form regarding the individual situation of the company and finally enable the derivation of appropriate recommendations.

Bachelor Thesis from the year 2006 in the subject Business economics - Business Management, Corporate Governance, grade: 1,6, University of Applied Sciences Essen, 119 entries in the bibliography, language: English, abstract: The introduction of this paper as well as the summary and the scope of work are drawn in the first chapter. Chapter 2 deals with the definition and relevance of the problem and outlines the research methods that are applied in this work. The third chapter is composed of the theoretical background for the subsequent case. For this reason chapter 3.1 gives an overview of the relevant market entry strategies. Afterwards an analysis of the selected market entry strategy that is relevant for the case - the joint venture - is given in chapter 3.2. This analysis is subdivided in three areas: a definition (3.2.1), the explanation of different variations of this market strategy (3.2.2.) and finally a critical comment in chapter 3.2.3 which includes a comparison of its advantages and disadvantages. In chapter 3.3 relevant theories for market entry barriers will be introduced. Porters Industry analysis will be described in chapter 3.3.1. Afterwards, the SWOTanalysis, its origin and elements will be explained generally in chapter 3.3.2 and Hofstedes cultural value dimensions will be outlined in chapter 3.3.3. Out of these theories the selected elements for the case part will be illustrated in chapter 3.4. First, the SWOT analysis will be explained in detail in chapter 3.4.1. For this reason the selected market entry barrier elements will be outlined. Again this chapter is sectioned into three parts: a detailed definition of the SWOT elements weaknesses (3.4.1.1) and threats (3.4.1.2) is given, its use is clarified afterwards (3.4.1.3) and a critical comment is drawn finally (3.4.1.4). The elements of Hofstedes cultural value dimension are analysed the same way as the theoretical elements of the market entry strategy and elements of the SWOT analysis. First, all selected dimensions will be defined. Chapter 3.4.2.1 is concerned with Power Distance, followed by the dimensions of Uncertainty avoidance (3.4.2.2) and Individualism versus Collectivism (3.4.2.3.). This definition will be closed with the last dimension: Long-Term orientation in chapter 3.4.2.4. In the following there will given be a critical comment on Hofstedes theory in chapter 3.4.2.5. After the theoretical background is outlined in chapter 3, chapter 4 is concentrated on the case part and the application of the discussed theories and methodologies into a practical environment. [...]

Diploma Thesis from the year 2006 in the subject Business economics - Supply, Production, Logistics, grade: Sehr Gut, FH Oberösterreich - Campus Steyr (Produktion und Management (PMT)), language: English, abstract: The business world at the beginning of the 21st century is characterised by a steadily increasing globalisation and the growth of international business operations. The proceeding dynamism of the global markets creates new chances not only for multinational enterprises but also for small- and medium sized companies (SMEs). Particularly, the above-average economic potential of emerging markets, especially in many countries of the Asia-Pacific region, is amongst others the leading incentive for the increasing number of cross-border expansions. In this context, the decision for the appropriate market entry strategy is already one of the most difficult ones within the broad topic of international marketing, whereas the choice of target countries with tremendous cultural differences and the specifics of the industrial goods business respectively, lead to an even higher degree of complexity in the decision for the most suitable form of organisation for the international market entry. The main task of this thesis was to break down the untargeted theory of the market entry modes to the evaluation of a situational context of a genuine company with the help of abstract focus areas in a step-by-step approach. Starting with a general overview to the topic area of interational marketing and further the alternative market entry modes, the thesis introduces three focus areas with an anticipatory relation to the case study: 'The Asia-Pacific region, SMEs and the industrial goods business' stand in the centre of the examination. The core of this thesis represents a feasibility study related to the focused perspective, in which every market entry mode is investigated in its compatibility with the focus areas. The result of the study, in other words the identification of al

Seminar paper from the year 2020 in the subject Communications - Public Relations, Advertising, Marketing, Social Media, grade: 4.5, , course: Management Sciences // Marketing, language: English, abstract: This paper examined issues surrounding foreign entry decisions. Essentially, the paper determined why and how a company makes a decision to enter a foreign market. The study was descriptive and data were sourced from various books, trade journals, publications and internet sites etc. The study revealed that foreign market entry strategy is an important strategic decision for international business units. The choice of foreign market entry strategy is to be made very cautiously as it has long-term implications, and it cannot be easily reversed. The study found that the future growth of international business unit depends upon the right mode of entry into foreign market. As revealed in the study there are three main modes of entry into foreign market namely: Trade mode, investment mode and contractual entry mode. In trade route, the entry in foreign market is made through exports. In investment mode, the subsidiary units are set up in the foreign market. This mode is also called foreign direct investment mode. In contractual entry mode, technological collaboration agreements are made with the business units of host nation. In this mode, technical skills/managerial skills are provided by business unit in parent country to business units in host country. Besides these three main strategies for entry into foreign markets. The choice of the appropriate strategy depends upon various factors like availability of resources, level of risk, tariff and non-tariff barriers imposed by other nations, transportation cost, infrastructure facilities, vision of management, restrictions on inflow/outflow of foreign investment. A key conclusion in the study is that there are different motives for an entry on a foreign market. The different motives that are stated in the study have common denominator which is that they can all lead to increased profit in the long run. The study suggests that in order to make an effective foreign market entry decision, firms and international business practitioners should apply the foreign-market-entry-model. They should also highlight those factors that have been found to be of most importance while entering a foreign market.

Master's Thesis from the year 2022 in the subject Economics - International Economic Relations, grade: 1,0, New Bulgarian University (Economics), course: International Business, language: English, abstract: This master's thesis will deal with the different market entry strategies of German companies in Bulgaria. More specifically, I will focus on small and medium-sized enterprises (SMEs), since they do not have the financial strength and confidence of large enterprises and corporations, and it would be interesting to examine their behaviour when entering a foreign market. An overview of the micro- and large enterprises will also be presented in order to further support the statements made about SMEs. Through an empirical and comparative analysis of a report of the German-Bulgarian chamber of industry and commerce, I will give an answer to the question, whether is this even worth it and if so, what strategy would be most successful for them and what factors influence the most. The analysis will begin with a more global overview of international business and especially internationalization. The definition of internationalization, its meaning and its relation to entering foreign markets will be presented. In the third chapter, the term market entry will be introduced, as well as the different possible strategies and variations for this. The fourth chapter will focus on small and medium-sized enterprises - what exactly they are in general, in Bulgaria and in Germany, what are the main differences between them and the large ones and why they are important. After that, a legal framework of the situation in Bulgaria will be presented - the economic development of the country, its business environment, corporate law, forms and taxes. All this will be considered in order to get to the heart of this thesis in the sixth chapter - the empirical and comparative analysis and the results drawn from them. Concrete samples with German companies in Bulgaria will be used in the study. Several variables will play a role in my research such as location, type of the enterprise, market entry method, industry and market participation. Based on it, specific problems will be discussed and finally conclusions will be drawn on the determining factors of market entry behaviour of German companies on the Bulgarian market. The master thesis will end with a summary of the main conclusions.