Tuesday, August 27, 2019

Entry Strategy Essay Example | Topics and Well Written Essays - 2750 words

Entry Strategy - Essay Example The economic and political factors are inter-related and it becomes difficult to identify only the economic or only the political factors separately (Altinay, 2005). The micro-environment is the internal environment which comprises of the corporate goals and objectives, the corporate strengths and weaknesses and the service factors. In addition to these, the location is equally important (Ekeledo & Sivakumar, 1998). Zhao and Decker (2004) contend that size of the firm, the technology transfer if required, the cultural distance, the market size, risks and uncertainties, sectoral barriers, and the international experience also influence the entry strategy. Taking these factors into account, the market entry strategy for ABC in India and Ireland would be recommended.   While market entry is generally through exports, licensing, joint venture or opening of wholly owned subsidiaries, in the hospitality sector the mode of entry is different. In this sector direct ownership or any form of equity partnership is not preferred in countries with high economic or political risks, and of the level of economic development is low (Altinay, 2005). If the risks are high entry modes with low resource commitment is preferred. Franchising and management contracts are the most preferred modes of entry in the hotel sector in international expansion. In both these formats capital-intensive assets and knowledge-based assets can be separated.  Service firms may enter foreign markets using a variety of modes but control is the most vital factor.

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