The internationlization of sport industry: a study of Thailand sport equipment firms

Abstract

Entering international markets is one of many key strategies to ensure high and sustainable growth of the firm. It refers to how firms want to do business activities and their engagement in foreign markets. Many studies on the international market have been focused on entry mode strategies which is one of the most critical decisions in a firm’s internationalization strategy. This research aimed to examine which factors influenced the entry mode decisions to enter foreign markets for sports equipment firms. A qualitative approach and multiple case study technique were used in this research. Important theories related to entry mode, such as, resource-based theory, transaction cost theory, institutional theory, and special characteristics of sports, were integrated to identify which factors influenced a sports equipment firm’s entry mode choice. From the literature review, many factors had been identified to influence entry mode choice. However, in this research, eight factors were identified from the theoretical perspectives and special characteristics of sport which are asset specificity, brand equity, international experience, cultural difference, market attractiveness, environmental uncertainty, legal environment and winning performance. Propositions were developed to use as a connection between the theories and the exploration of sports equipment firm’s entry mode decisions. Four case studies of Thailand sports equipment firms were used to demonstrate and discuss the applicability of the developed propositions and theoretical perspectives. The findings showed that asset specificity, brand equity and legal environment were found not to have any relationship with entry mode choice in sports equipment firms. High international experience and market attractiveness were found to play a key role and influenced firms to select higher control entry mode. Culture differences were found to have a small influence on entry mode choice while high environment uncertainty appeared to slow down the process of internationalization, but it did not influence sports equipment firms to change the initial entry mode level. Winning performance influenced the firm to gain more control and established the distributor in the market. Moreover, this research gives an insight into the internationalization of sports equipment firms with a beneficial source of data for those sport equipment firms considering the choice of market entry mode to enter the foreign markets.