POST ENTRY CHANGES: A case study of large Italian MNCs operating in BRIC markets

Abstract: In this paper we aim to identify the most important factors that influence the decisions made by large Western MNCs concerning post entry changes (PEC) in the BRIC markets. Thiss tudy attempts to explain processes and reasons why these changes take place. In addition we make a comparison between strategies followed and the differences between them for each of the BRIC markets.Most academic literature focuses on entry mode theories, however little has been written onPEC. PEC today is a hot topic in the current international business environment. This isevident in the market as many Western MNCs that invested in emerging markets throughJoint Ventures (JV) during the late 1980s and 1990s are now restructuring their strategies in order to further their growth (Luo, 2007).The paper uses a qualitative study to explain and explore PEC strategies in each of the four BRIC markets, using case studies of three Italian large MNCs: Artsana, De Longhi and Luxottica.The study finds that firstly BRIC markets should not be seen as a whole, as academic literature has a tendency to suggest. Secondly, the study finds that country-specific conditions directly affect PEC choices and decisions differently in each market. We have identified a number of variables which influence PEC, of these economic conditions and institutional context pressures were found to be the most important determinants for PEC within the MNCs studied. This study will help management to better choose appropriate PEC and set the most suitable operational mode for each specific environment.