Foreign Market Entry Strategy Essay Example | Topics and Well Written Essays - 2000 words

Foreign Market Entry Strategy - Essay Example In today’s highly competitive and complex environment, the firms pursuing a strategy of international market expansion face with a necessity to make a key strategic decision of the choice of market entry mode. Liang et al. (2009) provide a brief overview of the key types of foreign market entry strategies including the following: export, licensing and franchising, acquisitions, greenfield investments, or joint ventures. These market entry strategies very in terms of key variables, including the share of capital ownership, organizational control level, resource requirements, risk exposure and expected future returns (Liang et al. (2009) explain that foreign market entry strategy depends heavily on the company’s strategic orientation and strategic capabilities. In order to get empirical data, the researchers have carried out a study evaluating a sample of 332 foreign market entries of 62 U.S. companies over a period of 6 years (Liang et al., 2009). The results of the stud y have shown that the firms that competed primarily in terms of innovation (prospectors) preferred to select equity-based foreign market entry mode and compared to the firms that focused on brand positioning as their competitive advantage (defenders). Prospectors also made a choice in favor of full-ownership entry modes such as full acquisition and greenfield investment. This empirical study indicates that the firms which make innovation and know-how their strategic capability are ready to face a risk of information leak.