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How a company deals with the external factors depends

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Unformatted text preview: nternational from the outset. Hollensen (1998) states that if a company in the initial stage of its internalization makes a poor selection of entry modes, it can become a threat for its future market entries and expansions. However, there is no entry mode that can be seen as the best choice. The selection of entry mode is different from one company to another and is influenced by a number of factors, both internal and external to the company (ibid). How a company deals with the external factors depends on the internal factors that a company is facing when choosing an entry mode (Root, 1994). It is of great importance for SME’s to find out what factors that was central in the modal choices of other companies. This is in order to improve the SMEs’ strategies and entry mode selection and not make the same mistakes as others have done (Osland, Taylor and Zou, 2001). Deresky (2000) points out that SME’s often use export as an initial entry mode since it is a low-risk alternative, and in addition it does not demand large capital resources or investments and withdrawal is relatively e...
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