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3. Market Entry Strategies

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Market Entry Strategies
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3MarketEntryStrategies3.1AboutStrategyandInternationalizationThe term strategygoes backtoChandler,who defined strategyas the determinationof the basic long-termgoals and objectivesofanenterprise and the adoption ofcourses of action and allocation ofresources necessary for carryingout thesegoals(Chandler, 1962:23). Consequently, strategic management isaset ofmanage-rial decisions and actions thatdetermine the long-run performance ofafirm. There-fore, strategic management emphasizes monitoringand evaluating of external op-portunities and threats in light of an organizationsinternalresource strengths andweaknesses.The strategyofacorporation involves acomprehensive master plan stat-ing how the corporation will achieveits mission and objectivesand maximize itscompetitiveadvantages(Wheelen&Hunger, 2010:53, 67). Theconcept of strategicmanagement is focused primarilyonthe development of long-term corporate suc-cess.Strategies,dueto external or internal circumstances,sometimes cannot be re-alized as planned. In this case, the strategyneeds to be modified. Emergent and de-liberate strategies create the firmsrealized strategy(Mintzberg, Lampel, Quinn, &Ghoshal,2003:5). Strategyindicatesacomplex bundle of planned activities forthe attainment of long-term business objectivesthat alsoshould consider emergentdecision and actionpatterns.Optimal allocation of the firmsentrepreneurial andmanagement capabilities is of vital importance for effective strategyimplementation(Kutschker&Schmid,2006:798).Largerfirms, such as multinational enterprises,usuallyfollow three types ofstrategies thatare hierarchicallylinkedto the firmscorporate level, strategic busi-ness unit(SBU) level, and functional (department) level. On the top managementlevel (corporate level), there are directional strategies thatcan be categorizedasgrowth, stability,andretrenchment strategies.Agrowth strategy, as the term itselfindicates, is launched in order to increase the firmsturnover and profits through ex-pansion.Astability strategyisimplemented after the acquisition of another firm, soorganizational integration of the acquired business activities is required.Aretrench-ment strategyisrealized through the shutdown or outsourcingofbusinesses thatcontinuouslyaccumulate losses, and there is little hope thatthese poorlyperformingbusiness units will recover in the future.In more detail, growth strategies are realized by expandingbusiness activitiesin the current industry through enlargement of the current product portfolio or man-ufacturing depth (horizontal,vertical, backward,orforward integration) in relatedindustries (concentric diversification) or in unrelated industries (conglomerate diver-sification).Portersconcept of competitive strategies,such as cost leadership, differ-entiation, and niche strategies,isfound in the firmsstrategic business units(SBUs)(Porter,1999:3238;Wheelen&Hunger,2010:67).
© 2016 Walter de Gruyter GmbH, Berlin/Munich/Boston

3MarketEntryStrategies3.1AboutStrategyandInternationalizationThe term strategygoes backtoChandler,who defined strategyas the determinationof the basic long-termgoals and objectivesofanenterprise and the adoption ofcourses of action and allocation ofresources necessary for carryingout thesegoals(Chandler, 1962:23). Consequently, strategic management isaset ofmanage-rial decisions and actions thatdetermine the long-run performance ofafirm. There-fore, strategic management emphasizes monitoringand evaluating of external op-portunities and threats in light of an organizationsinternalresource strengths andweaknesses.The strategyofacorporation involves acomprehensive master plan stat-ing how the corporation will achieveits mission and objectivesand maximize itscompetitiveadvantages(Wheelen&Hunger, 2010:53, 67). Theconcept of strategicmanagement is focused primarilyonthe development of long-term corporate suc-cess.Strategies,dueto external or internal circumstances,sometimes cannot be re-alized as planned. In this case, the strategyneeds to be modified. Emergent and de-liberate strategies create the firmsrealized strategy(Mintzberg, Lampel, Quinn, &Ghoshal,2003:5). Strategyindicatesacomplex bundle of planned activities forthe attainment of long-term business objectivesthat alsoshould consider emergentdecision and actionpatterns.Optimal allocation of the firmsentrepreneurial andmanagement capabilities is of vital importance for effective strategyimplementation(Kutschker&Schmid,2006:798).Largerfirms, such as multinational enterprises,usuallyfollow three types ofstrategies thatare hierarchicallylinkedto the firmscorporate level, strategic busi-ness unit(SBU) level, and functional (department) level. On the top managementlevel (corporate level), there are directional strategies thatcan be categorizedasgrowth, stability,andretrenchment strategies.Agrowth strategy, as the term itselfindicates, is launched in order to increase the firmsturnover and profits through ex-pansion.Astability strategyisimplemented after the acquisition of another firm, soorganizational integration of the acquired business activities is required.Aretrench-ment strategyisrealized through the shutdown or outsourcingofbusinesses thatcontinuouslyaccumulate losses, and there is little hope thatthese poorlyperformingbusiness units will recover in the future.In more detail, growth strategies are realized by expandingbusiness activitiesin the current industry through enlargement of the current product portfolio or man-ufacturing depth (horizontal,vertical, backward,orforward integration) in relatedindustries (concentric diversification) or in unrelated industries (conglomerate diver-sification).Portersconcept of competitive strategies,such as cost leadership, differ-entiation, and niche strategies,isfound in the firmsstrategic business units(SBUs)(Porter,1999:3238;Wheelen&Hunger,2010:67).
© 2016 Walter de Gruyter GmbH, Berlin/Munich/Boston
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