Therefore a high commitment company regardless of its

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Unformatted text preview: y mode options. Conversely, a company with limited resources is constrained to use entry modes that call for only a small resource commitment. Hence company size is frequently a critical factor in the choice of an entry mode. Resources must be joined with a willingness to commit to foreign market development. A high degree of commitment means that managers will select the entry mode for a target country from a wider range of alternative modes than managers with low commitment. Therefore, a high-commitment company, regardless of its size, is more likely to choose equity entry modes. External Factors Target country Market factors Target country Environmental factors Target country Production factors Foreign market entry mode decision Country product factors Company resource / commitment factors Internal Factors Figure 2.2: Factors in the entry mode decision Source: Adapted from Root (1994), p.9 12 Home country factors LITERATURE REVIEW 2.1.5 Theory by Bruhno and Schilt (2001) Bruhno and Schilt (2001) have developed a model in which the authors present internal and external fac...
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