3. Market Entry Strategies

Mario Glowik

Chapter

Requires Authentication

3. Market Entry Strategies

Mario Glowik
Mario Glowik

Search for this author in:

De Gruyter De Gruyter Brill | Google Scholar

or

Purchase Chapter PDF

$42.00

Published by

Become an author with De Gruyter Brill

Explore this Subject How to publish with us

This chapter is in the book Market Entry Strategies

3 Market Entry Strategies3.1 About Strategy and InternationalizationThe term ‘strategy’ goes back to Chandler, who defined strategy ‘as the determination of the basic long-term goals and objectives of an enterprise and the adoption of courses of action and allocation of resourcesnecessary for carrying out these goals’ (Chandler 1962: 23). Consequently, strategic management is a set ofmanagerial decisions and actions that determine the long-run performance of a firm. Therefore, strategicmanagement emphasizes monitoring and evaluating of external opportunities and threats in light of an or-ganization’s internal resource strengths and weaknesses. The strategy of a corporation involves a compre-hensive master plan stating how the corporation will achieve its mission and objectives and maximize itscompetitive advantages (Wheelen & Hunger 2010). The concept of strategic management is focused primar-ily on the development of long-term corporate success. Strategies, due to external or internal circumstances,sometimes cannot be realized as planned. In this case, the strategy needs to be modified. Emergent and de-liberate strategies create the firm’s realized strategy (Mintzberg, Lampel, Quinn, & Ghoshal 2003). Strategyindicates a complex bundle of planned activities for the attainment of long-term business objectives thatalso should consider emergent decision and action patterns. Optimal allocation of the firm’s entrepreneur-ial and management capabilities is of vital importance for effective strategy implementation (Kutschker &Schmid 2006).Larger firms, such as multinational enterprises, usually follow three types of strategies that are hierarchicallylinked to the firm’s corporate level, strategic business unit (SBU) level, and functional (department) level. Onthe top management level (corporate level), there are directional strategies (where we should compete?) thatcan be categorized as growth, stability and retrenchment strategies. A growth strategy, as the term itself indi-cates, islaunched in order to increasethe firm’sturnover and profits through expansion. Astability strategy isimplemented, for example, after the acquisitionof another firm, so organizational integration of the acquiredbusiness activities is required. A retrenchment strategy is realized through the shutdown or outsourcing ofbusinesses that continuously accumulate losses, and there is little hope that these poorly performing busi-ness units will recover in the future (Wheelen & Hunger 2010).Directional StrategyDiversificationRelated DiversificationConglomerate DiversificationConcentrationHorizontalVerticalBackwardForwardFig. 3.1:Modes of Diversification and of Concentration Strategieshttps://doi.org/10.1515/9783110653113-003

You are currently not able to access this content.

Not sure if you should have access? Please log in using an institutional account to see if you have access to view or download this content.

Purchase Chapter PDF

$42.00

3 Market Entry Strategies3.1 About Strategy and InternationalizationThe term ‘strategy’ goes back to Chandler, who defined strategy ‘as the determination of the basic long-term goals and objectives of an enterprise and the adoption of courses of action and allocation of resourcesnecessary for carrying out these goals’ (Chandler 1962: 23). Consequently, strategic management is a set ofmanagerial decisions and actions that determine the long-run performance of a firm. Therefore, strategicmanagement emphasizes monitoring and evaluating of external opportunities and threats in light of an or-ganization’s internal resource strengths and weaknesses. The strategy of a corporation involves a compre-hensive master plan stating how the corporation will achieve its mission and objectives and maximize itscompetitive advantages (Wheelen & Hunger 2010). The concept of strategic management is focused primar-ily on the development of long-term corporate success. Strategies, due to external or internal circumstances,sometimes cannot be realized as planned. In this case, the strategy needs to be modified. Emergent and de-liberate strategies create the firm’s realized strategy (Mintzberg, Lampel, Quinn, & Ghoshal 2003). Strategyindicates a complex bundle of planned activities for the attainment of long-term business objectives thatalso should consider emergent decision and action patterns. Optimal allocation of the firm’s entrepreneur-ial and management capabilities is of vital importance for effective strategy implementation (Kutschker &Schmid 2006).Larger firms, such as multinational enterprises, usually follow three types of strategies that are hierarchicallylinked to the firm’s corporate level, strategic business unit (SBU) level, and functional (department) level. Onthe top management level (corporate level), there are directional strategies (where we should compete?) thatcan be categorized as growth, stability and retrenchment strategies. A growth strategy, as the term itself indi-cates, islaunched in order to increasethe firm’sturnover and profits through expansion. Astability strategy isimplemented, for example, after the acquisitionof another firm, so organizational integration of the acquiredbusiness activities is required. A retrenchment strategy is realized through the shutdown or outsourcing ofbusinesses that continuously accumulate losses, and there is little hope that these poorly performing busi-ness units will recover in the future (Wheelen & Hunger 2010).Directional StrategyDiversificationRelated DiversificationConglomerate DiversificationConcentrationHorizontalVerticalBackwardForwardFig. 3.1:Modes of Diversification and of Concentration Strategieshttps://doi.org/10.1515/9783110653113-003

You are currently not able to access this content.

Not sure if you should have access? Please log in using an institutional account to see if you have access to view or download this content.

Purchase Chapter PDF

$42.00