The relationship between timing of entry into a foreign market, entry mode decision and market selection

Abstract

Companies that decide to internationalize have to respond to some basic questions, such as where and how to carry out their strategy. Classic literature regarding the internationalization process has focused on entry mode and market selection decisions. However, the recent international entrepreneurship perspective considers a new dimension: timing of entry. This new approach has opened up a new line of research, arguing that time is a dimension that must be explicitly considered in order to develop a proper understanding of the internationalization process of firms. However, very few papers have looked at all these questions from this perspective in an integrative manner. This article puts forward a proposal about the relationship that exists between the timing of entry into foreign markets, the entry mode decision, and market/country selection. Starting with a review of the variables that have traditionally been used to explain timing of entry and then looking at the different forms of internationalization, the aim of this article is to propose a link between these important questions in order to increase our understanding of a company’s internationalization process.

Drivers of export entrepreneurship

“…In the export activity context, some studies reflect that the prevailing conditions within the sector -called mimicry -tend to condition the behaviors and results of export firms (Gallego et al, 2009). Specifically, competitive intensity tends to be reflected in a greater degree of adaptation of the marketing-mix program with the aim of satisfying the needs and desires of foreign consumers (Navarro, Arenas, & Rondá n, 2014;Powers & Loyka, 2010).…”

Understanding site selection of for-profit educational management organization charter schools

“…Therefore, the examination of market conditions affecting site selection has been critical to the business and industry sectors, and can offer substantial information about what promotes or hinders the evolution of markets. In order to demonstrate circumstances in which organization founders define market opportunities, several scholars have explored the difference in organizational behaviors among incumbents and late entrants by focusing on timing of market entry (Gallego, Hidalgo, Acedo, Casillas, & Moreno, 2009;Lilien & Yoon, 1990;Sinha & Noble, 2005). Exploiting the advantage that a judgment of where to locate is explicitly observable, previous studies have commonly emphasized that location strategies are closely tied to market densities obtained from the evaluation of competitors, as well as consumer features and needs (Bresnahan, Reiss, Willig, & Stigler, 1987;Gentry, Dalziel, & Jamison, 2013;Haveman, 1994;Kumar & Subramanian, 1997).…”

Born Global Firm Internationalisation: The Influence of Industry Factors

“…According to several authors (Andersen, 1993(Andersen, , 1997Gallego et al, 2009), the fundamental strategic decisions in connection with a firm's internationalisation are associated with market selection and the choice of entry mode. Traditionally, internationalising firms choose an internationalisation pathway so that they can gain market knowledge while minimising the risks associated with internationalisation (Knight & Cavusgil, 1996).…”

“…Research further highlights that born global firms are unlikely to undertake foreign direct investment (FDI) because of the additional risk often associated with FDI (Kuivailenen et al, 2007;Rialp et al, 2005). The entry mode of born global firms is not a definitional stipulation; however, it remains significant to their internationalisation process (Gallego et al, 2009;Hashai, 2011;Kuivalainen et al, 2007;Melén & Nordman, 2009). As the entry mode for born global firms is largely overlooked within the literature, it is important that it be emphasised as a major strategic decision in born global firms' internationalisation (Hashai, 2011;Knight & Cavusgil, 2004).…”