File Name: entry mode choice of smes in central and eastern europe map.zip
- How to Perfect Your Market Entry Strategy
- Pathways of SME internationalization: a bibliometric and systematic review
- Strategies That Fit Emerging Markets
The challenge of China market entry has become an increasingly important one of Western companies of all shapes and sizes.
These articles have been peer-reviewed and accepted for publication but are pending final changes, are not yet published and may not appear here in their final order of publication until they are assigned to issues. Therefore, the content conforms to our standards but the presentation e. Additionally, titles, authors, abstracts and keywords may change before publication.
How to Perfect Your Market Entry Strategy
Fast-growing economies often provide poor soil for profits. The cause? A lack of specialized intermediary firms and regulatory systems on which multinational companies depend. Successful businesses look for those institutional voids and work around them. Many firms simply go with what they know—and fall far short of their goals.
These gaps have made it difficult for multinationals to succeed in developing nations; thus, many companies have resisted investing there. That may be a mistake. Corporations also depend on composite indexes for help making decisions. A better approach is to understand institutional variations between countries.
The best way to do this, the authors have found, is by using the five contexts framework. By asking a series of questions that pertain to each of the five areas, executives can map the institutional contexts of any nation.
But first firms should weigh the benefits against the costs. If they find that the risks of adaptation are too great, they should try to change the contexts in which they operate or simply stay away. Developing countries. Yet many companies shy away from doing business in these nations. CEOs are all too aware that such countries lack the market institutions needed to do business successfully—such as consumer-data experts, end-to-end logistics providers, and talent search firms.
How to mitigate the risks? Create new market infrastructures for example, your own in-country supply chain? Or stay away because adapting your business model would be impractical or uneconomical? Dell Computer chose to adapt its business model to enter China. In the U. So, with help from its joint venture partner, it identified farmers it could work with and advanced them money so they could invest in seeds and equipment.
And it sent Russian managers to Canada for training. It avoids countries with weak logistics systems and poorly developed capital markets, where it would have difficulty using its inventory management system and may not be able to use employee stock ownership. CEOs and top management teams of large corporations, particularly in North America, Europe, and Japan, acknowledge that globalization is the most critical challenge they face today.
They are also keenly aware that it has become tougher during the past decade to identify internationalization strategies and to choose which countries to do business with. As a result, many multinational corporations are struggling to develop successful strategies in emerging markets.
But that infrastructure is often underdeveloped or absent in emerging markets. Few end-to-end logistics providers, which allow manufacturers to reduce costs, are available to transport raw materials and finished products.
Because of all those institutional voids, many multinational companies have fared poorly in developing countries. All the anecdotal evidence we have gathered suggests that since the s, American corporations have performed better in their home environments than they have in foreign countries, especially in emerging markets. Not surprisingly, many CEOs are wary of emerging markets and prefer to invest in developed nations instead. By the end of —according to the Bureau of Economic Analysis, an agency of the U.
In fact, although U. Many companies shied away from emerging markets when they should have engaged with them more closely.
Since the early s, developing countries have been the fastest-growing market in the world for most products and services. Companies can lower costs by setting up manufacturing facilities and service centers in those areas, where skilled labor and trained managers are relatively inexpensive. Western companies that want to develop counterstrategies must push deeper into emerging markets, which foster a different genre of innovations than mature markets do.
In general, advanced economies have large pools of seasoned market intermediaries and effective contract-enforcing mechanisms, whereas less-developed economies have unskilled intermediaries and less-effective legal systems. Successful companies develop strategies for doing business in emerging markets that are different from those they use at home and often find novel ways of implementing them, too. We have learned that successful companies work around institutional voids.
They develop strategies for doing business in emerging markets that are different from those they use at home and often find novel ways of implementing them, too. As we will show, firms that take the trouble to understand the institutional differences between countries are likely to choose the best markets to enter, select optimal strategies, and make the most out of operating in emerging markets. Others follow key customers or rivals into emerging markets; the herd instinct is strong among multinationals.
For instance, the reason U. Isaacs pointed out that partly as a result of the work missionaries and scholars did in China in the s, Americans became more familiar with China than with India. Companies that choose new markets systematically often use tools like country portfolio analysis and political risk assessment, which chiefly focus on the potential profits from doing business in developing countries but leave out essential information about the soft infrastructures there.
Executives usually analyze its GDP and per capita income growth rates, its population composition and growth rates, and its exchange rates and purchasing power parity indices past, present, and projected. Such composite indices are no doubt useful, but companies should use them as the basis for drawing up strategies only when their home bases and target countries have comparable institutional contexts.
For example, the United States and the United Kingdom have similar product, capital, and labor markets, with networks of skilled intermediaries and strong regulatory systems. The two nations share an Anglo-Saxon legal system as well. American companies can enter Britain comfortable in the knowledge that they will find competent market research firms, that they can count on English law to enforce agreements they sign with potential partners, and that retailers will be able to distribute products all over the country.
Those are dangerous assumptions to make in an emerging market, where skilled intermediaries or contract-enforcing mechanisms are unlikely to be found. In fact, composite index—based analyses of developing countries conceal more than they reveal. For instance, in China and Russia, multinational retail chains and local retailers have expanded into the urban and semi-urban areas, whereas in Brazil, only a few global chains have set up shop in key urban centers.
And in India, the government prohibited foreign direct investment in the retailing and real estate industries until February , so mom-and-pop retailers dominate. Brazil, Russia, India, and China may all be big markets for multinational consumer product makers, but executives have to design unique distribution strategies for each market. Those differences may make it more attractive for some businesses to enter, say, Brazil than India.
Companies often base their globalization strategies on country rankings, but on most lists, it is impossible to tell developing countries apart. According to the six indices below, Brazil, India, and China share similar markets while Russia, though an outlier on many parameters, is comparable to the other nations. Contrary to what these rankings suggest, however, the market infrastructure in each of these countries varies widely, and companies need to deploy very different strategies to succeed.
As we helped companies think through their globalization strategies, we came up with a simple conceptual device—the five contexts framework—that lets executives map the institutional contexts of any country.
Economics tells us that companies buy inputs in the product, labor, and capital markets and sell their outputs in the products raw materials and finished goods or services market. This will help them understand the differences between home markets and those in developing countries. The five contexts framework places a superstructure of key markets on a base of sociopolitical choices. Many multinational corporations look at either the macro factors the degree of openness and the sociopolitical atmosphere or some of the market factors, but few pay attention to both.
Managers can identify the institutional voids in any country by asking a series of questions. Are there strong political groups that oppose the ruling party?
Do elections take place regularly? Are the roles of the legislative, executive, and judiciary clearly defined? What is the distribution of power between the central, state, and city governments? Is the judiciary independent? Do the courts adjudicate disputes and enforce contracts in a timely and impartial manner? How effective are the quasi-judicial regulatory institutions that set and enforce rules for business activities? Do religious, linguistic, regional, and ethnic groups coexist peacefully, or are there tensions between them?
How vibrant and independent is the media? Are newspapers and magazines neutral, or do they represent sectar-ian interests?
Are nongovernmental organizations, civil rights groups, and environmental groups active in the country? Do citizens trust companies and individuals from some parts of the world more than others? What restrictions does the government place on foreign investment?
Are those restrictions in place to facilitate the growth of domestic companies, to protect state monopolies, or because people are suspicious of multinationals? Can a company make greenfield investments and acquire local companies, or can it only break into the market by entering into joint ventures? Will that company be free to choose partners based purely on economic considerations? Does the country allow the presence of foreign intermediaries such as market research and advertising firms, retailers, media companies, banks, insurance companies, venture capital firms, auditing firms, management consulting firms, and educational institutions?
How long does it take to start a new venture in the country? Are there restrictions on portfolio investments by overseas companies or on dividend repatriation by multinationals? Does the market drive exchange rates, or does the government control them? Can a company set up its business anywhere in the country?
Has the country signed free-trade agreements with other nations? If so, do those agreements favor investments by companies from some parts of the world over others? Does the government allow foreign executives to enter and leave the country freely? How difficult is it to get work permits for managers and engineers? Does the country allow its citizens to travel abroad freely? Can ideas flow into the country unrestricted? Are people permitted to debate and accept those ideas?
Can companies easily obtain reliable data on customer tastes and purchase behaviors? Are there cultural barriers to market research? Do world-class market research firms operate in the country? Can consumers easily obtain unbiased information on the quality of the goods and services they want to buy?
Pathways of SME internationalization: a bibliometric and systematic review
This chapter pulls together all the information about choosing to expand internationally and possible ways to make that choice. Section 8. A wide variety of internationalization moves are available after choosing to expand. Moreover, some flatteners make global moves easier, while some make them more difficult. Indeed, even importing and outsourcing can be considered stealth, or at least early, steps in internationalization, because they involve doing business across borders.
The capital and most populous city is Algiers , located in the far north of the country on the Mediterranean coast. Algeria is bordered to the northeast by Tunisia , to the east by Libya , to the southeast by Niger , to the southwest by Mali , Mauritania , and the Western Saharan territory, to the west by Morocco , and to the north by the Mediterranean Sea. The country has a semi-arid geography, with most of the population living in the fertile north and the Sahara dominating the geography of the south. This arid geography makes the country very vulnerable to climate change. Most of the population is Arab-Berber , practicing Islam and using the official languages of Arabic and Berber. However, French serves as an administrative and education language in some contexts, and Algerian Arabic is the main spoken language. Algeria has a semi-presidential republic , with local constituencies consisting of 58 provinces and 1, communes.
Strategies That Fit Emerging Markets
Fast-growing economies often provide poor soil for profits. The cause? A lack of specialized intermediary firms and regulatory systems on which multinational companies depend.
The Journal of Innovation and Knowledge JIK focuses on how we gain knowledge through innovation and how knowledge encourages new forms of innovation.
Subscribe to our newsletter
Business is dynamic and rapidly changing. Global markets were previously the playing field of multinational corporations MNCs , while small and medium enterprises SMEs were local; however, the removal of imposed barriers and recent technological advances in manufacturing, transportation, and communications have indorsed SMEs and international entrepreneurs IEs global access. This review systematically examines comparative SME and IE research, analyzing after fine-tuning articles published in leading journals from to September Our bibliometric and systematic review classifies SME and IE research findings into three echelons: i subjects, ii theories, and iii methods. Thus, SMEs represent the backbone of national economic systems, but it is relatively recent that SMEs and multinational corporations MNCs share the same competitive space; less than two decades ago, Etemad et al. Similarly, the rapid development of technology has made internationalization strategies more accessible to SMEs.
Он был известен среди сотрудников, он пользовался репутацией патриота и идеалиста… честного человека в мире, сотканном из лжи. За годы, прошедшие после появления в АНБ Сьюзан, Стратмор поднялся с поста начальника Отдела развития криптографии до второй по важности позиции во всем агентстве. Теперь только один человек в АНБ был по должности выше коммандера Стратмора - директор Лиланд Фонтейн, мифический правитель Дворца головоломок, которого никто никогда не видел, лишь изредка слышал, но перед которым все дрожали от страха. Он редко встречался со Стратмором с глазу на глаз, но когда такое случалось, это можно было сравнить с битвой титанов. Фонтейн был гигантом из гигантов, но Стратмора это как будто не касалось. Он отстаивал перед директором свои идеи со спокойствием невозмутимого боксера-профессионала. Даже президент Соединенных Штатов не решался бросать вызов Фонтейну, что не раз позволял себе Стратмор.
Пока этого, по-видимому, не случилось: цифра 16 в окне отсчета часов заставила бы его завопить от изумления. Сьюзан допивала уже третью чашку чая, когда это наконец произошло: компьютер пискнул. Пульс ее участился. На мониторе появилось символическое изображение конверта - это значило, что пришло сообщение по электронной почте. Сьюзан бросила быстрый взгляд на Хейла, но тот был всецело поглощен своим компьютером. Затаив дыхание, Сьюзан дважды щелкнула по конверту.
Она поймала себя на мысли, что глаза ее смотрят в пустоту. Прижавшись лицом к стеклу, Мидж вдруг почувствовала страх - безотчетный, как в раннем детстве. За окном не было ничего, кроме беспросветного мрака. Шифровалка исчезла. ГЛАВА 57 В туалетных комнатах шифровалки не было окон, и Сьюзан Флетчер оказалась в полной темноте.
Единственный исполнитель. Сьюзан пронзила ужасная мысль. Этой своей мнимой перепиской Танкадо мог убедить Стратмора в чем угодно. Она вспомнила свою первую реакцию на рассказ Стратмора об алгоритме, не поддающемся взлому. Сьюзан была убеждена, что это невозможно.