CHAPTER thirteen


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CHAPTER THIRTEEN: MARKET ENTRY MODES FOR THE INTERNATIONALIZING FIRM Chapter 13 shows how firms go through the process of internationalization. We explore the question of why firms internationalize, how they first do it (how they first enter foreign host markets), and how they eventually solidify their internationalization with direct investment (FDI). Key to the process of internationalization are the initial modes of entry firms initially use to enter international markets. This is strategy, structure and environmental "FIT" in action. Firms operating in a particular set of environments must have a strategy and structure that not only fit each other, but fit the environments as well. This is complex and there are no guarantees any particular firm will be successful with any particular strategy/structure competitive mix for a particular set of environments. To enhance chances for success,
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however, knowledge has to be maximized. To craft a strategy, create a structural form to support it, and make it all "fit" the various relevant environments, firms must deeply understand their environments: They must "know" as much as they can about them. This is done by keeping in tune with the environments, by "environmental scanning". ..a process for learning what is needed to make structure fit strategy and for both to fit well with the kind of environment the firm faces. For example, if a firm's product is a commodity, the value-to-weight ratio is high, and the regulatory environment permissive, a global strategy an d
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This note was uploaded on 09/08/2011 for the course IBUS 330 taught by Professor Nicholson during the Spring '07 term at S.F. State.

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