Market entry strategies in transition countries

Abstract: It is becoming more and more important for companies to internationalise in
order to survive the tough competition and/or grow. Since many markets are
almost saturated, companies are forced to seek and exploit new
opportunities, and these opportunities are often found in transition
economies. Transition countries have a huge potential for future growth.
However, they can be difficult to function in due to for example
non-westernised business practices. For this reason, the mode of entry
strategy has to be carefully evaluated and selected.

This thesis covers the highly interesting area of mode of entry strategies
used when Swedish firms enter transition countries, which also is the
purpose of this thesis. The focus is on motives to enter transition
countries, the strategies used to enter transition countries, the factors
influencing the decision of entry strategy, and finally problems facing
companies entering transition markets. In order to reach this purpose, we
have conducted a case study of a Swedish company within the subject area,
through an interview.

Our main findings are that the most significant motive to enter transition
countries is potential growth of the market, the most suitable entry mode
strategy is joint venture, the most significant factor influencing the
entry mode decision is the legal framework, and the largest problem facing
companies entering transition countries is the socialist legacy.