Dex One Corporation provides print, online and mobile search marketing via their DexKnows.com website, print yellow pages directories, voice based search platforms and pay-per-click ad networks in the U.S.

Strategies are central to the achievement of sustainable organisational development. Amongst the motivations to strategise are to grow fast ahead of the competitors, grow in the line with the industry or to simply catch up and defend an existing status. Despite the challenges, threats and risks, the orientation of various firms are to expand, to reach and to penetrate new markets segments. As such, market entry decisions are a multi-approach that requires careful consideration of the firm seeking to widen economies of scope and reach. Market entry decisions depend on the resources and the ability to sustain the competitive edge. In this report, different market entry strategies and its drivers, nature and dynamics will be discussed. To wit, this paper aims to determine why conformance to a single market entry strategy is inappropriate.



Hill and Jones (2001) asserted that there are three basic decisions that a firm contemplating foreign expansion should take into account: which markets to enter, when to enter those markets, and on what scale. When choosing foreign market, the choice must be made on the basis of an assessment of their long-run profit potential. As such, the attractiveness of a country as a potential market for an international business depends on balancing the benefits, costs, and risks associated with doing business in that country. Conforming to the philosophy of timing of entry is also important wherein entry is early when an international business enters a foreign market before other foreign firms, and late when it enters after other international businesses have already established themselves. Entering a market on a large scale involves the commitment of significant resources to that venture. Though not all companies have the resources, even some large companies prefer to enter foreign markets on a small scale and then gradually build their presence as they become familiar with the foreign market.



Sundali and Seale (2004) contended that this takes place because of the possibility of aggregate market entry coordination, which when coordinated poorly may result in situations of over-entry or under-entry. Over-entry occurs when firm face significant competitive pressures and lower profits while under-entry takes place in the case that firms face negligible competitions and higher profits but market is served on the former but not in the latter. Because developed and developing countries are opening up their domestic sectors to global competition firms particularly multinational corporations (MNCs) need to be aware of the performance implications of entry timing and mode of entry (Pan, Li and Tse, 1999; Chan, Makino and Isobe, 2006). Action strategies now include first-in, follow-the-leader and last-in strategies. There are economic, pre-emptive, technological, and behavioural factors for these strategies. Economic factors include cost advantages from economies of scale, the experience curve effect, and asymmetries in marketing costs. Pre-emptive factors are those that limit or prevent late entrants from gaining access to suppliers, markets, and customers. Technological factors include the ability of early movers to set industry standards, keep innovations proprietary, and the advantage to lead continually future research and development. With respect to behavioural factors, studies have shown that early movers often enjoy a higher degree of customer preference and loyalty than late entrants (as cited in Pan, Li and Tse, 1999).



Hill and Jones (2001) also noted that there are five options that companies could ponder on. These are exporting, licensing, franchising, joint ventures, and the establishment of a wholly owned subsidiary. Exporting is commonplace in the manufacturing industries to begin their global expansion as it provides manufacturers with two distinct advantages. First, it avoids the costs of having to establish manufacturing operations in the host country and second, exporting is consistent with a pure global strategy. Exporting, however, also disadvents manufacturers where decision should be made appropriate on the basis of lower-cost locations for manufacturing the products abroad. What can make exporting an uneconomical initiative would be high transport costs specifically in the case of bulk products (p. 132).



Licensing provides the advantages of keeping away from development costs and risks associated with opening up a foreign market. Licensing is significant for those industries that are willing to commit financial resources to an unfamiliar or politically volatile foreign market, mostly multinational enterprises (MNEs) which are willing to commit mid- to high-range financial investments. On the other hand, there are drawbacks to licensing which include the fact that it does not give the company tight control of the operations such as marketing, manufacturing and strategic functions especially those in foreign operation which is a requisite when a company is pursuing a pure global or transnational strategy. Because companies licensed technology, it subjects it know-how and expertise on competitors’ scrutiny. Licensing limits the company’s capability to coordinate strategic moves across countries (Hill and Jones, 2001, p. 132).

Franchising is important for those companies who are endowed with strong brand names which franchisees could manipulate through limited rights in return for a lump sum payment and the share of profits. Franchisees therefore shall abide with the strict rules on its business conduct. Primarily, franchising is a strategy pursued by manufacturing companies but service companies such as restaurants and food chains employed such a strategy as well. Like licensing, franchising had an advantage of diffusing costs and risks but the disadvantage is that it requires global strategic coordination which is difficult considering the local requirements of each business. With this said, another disadvantage is that it involves quality control where poor quality not only hurts market share but also market reputation (Hill and Jones, 2002).



Lastly, joint ventures had the advantages of benefiting from the local partner’s knowledge of the host country’s competitive condition as well as culture, language, political systems and business systems. The local partner could also share with the company the risks and costs of setting up the business. Joint venture is particularly significant when the choice of entry mode is hindered by political issues. Two downsides of joint ventures are risk of losing control over technology to venture partner and does not give the company tight control of the subsidiaries which is very important when pursuing a global strategy (Hill and Jones, 2002).
 
Dex One Corporation provides print, online and mobile search marketing via their DexKnows.com website, print yellow pages directories, voice based search platforms and pay-per-click ad networks in the U.S.

Strategies are central to the achievement of sustainable organisational development. Amongst the motivations to strategise are to grow fast ahead of the competitors, grow in the line with the industry or to simply catch up and defend an existing status. Despite the challenges, threats and risks, the orientation of various firms are to expand, to reach and to penetrate new markets segments. As such, market entry decisions are a multi-approach that requires careful consideration of the firm seeking to widen economies of scope and reach. Market entry decisions depend on the resources and the ability to sustain the competitive edge. In this report, different market entry strategies and its drivers, nature and dynamics will be discussed. To wit, this paper aims to determine why conformance to a single market entry strategy is inappropriate.



Hill and Jones (2001) asserted that there are three basic decisions that a firm contemplating foreign expansion should take into account: which markets to enter, when to enter those markets, and on what scale. When choosing foreign market, the choice must be made on the basis of an assessment of their long-run profit potential. As such, the attractiveness of a country as a potential market for an international business depends on balancing the benefits, costs, and risks associated with doing business in that country. Conforming to the philosophy of timing of entry is also important wherein entry is early when an international business enters a foreign market before other foreign firms, and late when it enters after other international businesses have already established themselves. Entering a market on a large scale involves the commitment of significant resources to that venture. Though not all companies have the resources, even some large companies prefer to enter foreign markets on a small scale and then gradually build their presence as they become familiar with the foreign market.



Sundali and Seale (2004) contended that this takes place because of the possibility of aggregate market entry coordination, which when coordinated poorly may result in situations of over-entry or under-entry. Over-entry occurs when firm face significant competitive pressures and lower profits while under-entry takes place in the case that firms face negligible competitions and higher profits but market is served on the former but not in the latter. Because developed and developing countries are opening up their domestic sectors to global competition firms particularly multinational corporations (MNCs) need to be aware of the performance implications of entry timing and mode of entry (Pan, Li and Tse, 1999; Chan, Makino and Isobe, 2006). Action strategies now include first-in, follow-the-leader and last-in strategies. There are economic, pre-emptive, technological, and behavioural factors for these strategies. Economic factors include cost advantages from economies of scale, the experience curve effect, and asymmetries in marketing costs. Pre-emptive factors are those that limit or prevent late entrants from gaining access to suppliers, markets, and customers. Technological factors include the ability of early movers to set industry standards, keep innovations proprietary, and the advantage to lead continually future research and development. With respect to behavioural factors, studies have shown that early movers often enjoy a higher degree of customer preference and loyalty than late entrants (as cited in Pan, Li and Tse, 1999).



Hill and Jones (2001) also noted that there are five options that companies could ponder on. These are exporting, licensing, franchising, joint ventures, and the establishment of a wholly owned subsidiary. Exporting is commonplace in the manufacturing industries to begin their global expansion as it provides manufacturers with two distinct advantages. First, it avoids the costs of having to establish manufacturing operations in the host country and second, exporting is consistent with a pure global strategy. Exporting, however, also disadvents manufacturers where decision should be made appropriate on the basis of lower-cost locations for manufacturing the products abroad. What can make exporting an uneconomical initiative would be high transport costs specifically in the case of bulk products (p. 132).



Licensing provides the advantages of keeping away from development costs and risks associated with opening up a foreign market. Licensing is significant for those industries that are willing to commit financial resources to an unfamiliar or politically volatile foreign market, mostly multinational enterprises (MNEs) which are willing to commit mid- to high-range financial investments. On the other hand, there are drawbacks to licensing which include the fact that it does not give the company tight control of the operations such as marketing, manufacturing and strategic functions especially those in foreign operation which is a requisite when a company is pursuing a pure global or transnational strategy. Because companies licensed technology, it subjects it know-how and expertise on competitors’ scrutiny. Licensing limits the company’s capability to coordinate strategic moves across countries (Hill and Jones, 2001, p. 132).

Franchising is important for those companies who are endowed with strong brand names which franchisees could manipulate through limited rights in return for a lump sum payment and the share of profits. Franchisees therefore shall abide with the strict rules on its business conduct. Primarily, franchising is a strategy pursued by manufacturing companies but service companies such as restaurants and food chains employed such a strategy as well. Like licensing, franchising had an advantage of diffusing costs and risks but the disadvantage is that it requires global strategic coordination which is difficult considering the local requirements of each business. With this said, another disadvantage is that it involves quality control where poor quality not only hurts market share but also market reputation (Hill and Jones, 2002).



Lastly, joint ventures had the advantages of benefiting from the local partner’s knowledge of the host country’s competitive condition as well as culture, language, political systems and business systems. The local partner could also share with the company the risks and costs of setting up the business. Joint venture is particularly significant when the choice of entry mode is hindered by political issues. Two downsides of joint ventures are risk of losing control over technology to venture partner and does not give the company tight control of the subsidiaries which is very important when pursuing a global strategy (Hill and Jones, 2002).

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