Entry mode decision for Swedish business-to-business firms internationalizing to India

Abstract: AbstractTitleEntry mode decision for Swedish business-to-business firms internationalizing to India. AuthorsJesper Mårtensson, Joep van den BrinkSubjectMaster Thesis in International Marketing KeywordsInternationalization, Entry Mode, BRIC-markets, Internal & External Factors, Effectuation & Causation. Question(s)How do internal and external factors influence the entry mode decision for Swedish business-to-businessfirms internationalizing to India?How can the entry mode decision process be characterized for Swedish business-to-businessfirms when internationalizing to India?How does the entry mode, used by Swedish business-to-business firms in India, follows the Transaction Cost Approach to entry modes and the Resource Based Approach to entry modes?PurposeThe purpose of this study is to get a deeper understanding of how internal and external factors influence the entry mode decision forSwedish business-to-business firms that internationalize to India. Furthermore, the study aims at bringing in a process-based view of the entry mode decision literature.The study also aims to investigate entry modes used in India to see how it followsthe recommendations of the transaction cost and the Resource Based explanation to entry mode choice. MethodQualitative multiple case study consisting of three cases. The data was collected through personal interviews. The cases have been analyzed using a within-case analysis and a cross-case analysis.ConclusionThe findings of our study show that firms evaluate just a few internal and external factors when internationalizing to India. As can be derived from our study, the product has an importantinfluence on the entry mode decision for the investigated firms. The more standardized a product is, the easier it is to penetrate the Indian market using low-control entry modes. The higher the complexity of the product, the more knowledge is required from the firm and thus, the higher the likelihood for a firm to internationalize to the Indian market using high-control entry modes. It is also shown that firms tend to rely on earlier experiences when internationalizing to India, whereas this could limit the firms for choosing the right entry mode. Furthermore, the specific market barriers for the Indian market have an influence on the entry mode decision as well. It is also found that firms that have a causational approach to foreign entry mode will not allow for a rapid switch in the level of foreign involvement before they have reliable information as a base for the decision. The firms with an effectual approach made their entry mode decision based on selecting an entry mode with low resource commitment, seeing their achieved turnovers in India as a bonus.