When trying to reach does distant markets the

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Unformatted text preview: s. The companies avoid additional cost to the company by having their production in their domestic market, in case one, and adjust their prizing to cover the additional cost, in case two. The companies can therefore use a single market entry mode even though the target country factors vary greatly between different markets. Target country production factors can be overcome through effective implementation, of well thought strategic plans, without affecting the companies’ choice of market entry mode. In addition, we found that the geographic distance is of great importance in the initial stage of the companies’ internationalization. However, the importance tends to decrease with time due to the companies increasing resources and knowledge. This together with the globalization of the business environment enables the companies to reach markets farther from their domestic market. When trying to reach does distant markets the companies also have to accept the increase in “psychic distance”. The increase of the geographic/”psychic” distance will influence the choice of market entry mode, as the companies will be forced to adapt their way o...
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This document was uploaded on 03/22/2014.

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