A process of internationalization and foreign market entry mode selection in service industry ‘Case study of Via SMS Group Company’

Abstract: Title: A process of internationalization and foreign market entry mode selection in service industry ‘Case study of Via SMS Group Company’ Level: Final assignment for Master Degree in Business Administration Authors: Olegs Semasko, Aluko Abolade Supervisor: Pär Vilhelmson Date: 2012 May AIM: The aim of this study is to investigate the causes that stimulate service companies to cross boundaries of its home country and open new subsidiaries in other countries. In addition we also examine what type of foreign market entry mode the service company selects when it enters another market. The topic of market entry strategy is of current interest among researchers and has been widely discussed for a long period of time, but there is still limited number of studies about the service industry. Therefore it might be interesting to look into why the companies in service industry strive to internationalize its operations and what mode of entry do they prefer in terms of choosing foreign market entering strategy. METHOD: We used a qualitative research approach to explore the internationalization process procedure of our case company and we adopted a case study method. Both secondary (textbooks, scientific articles and the website of our case company) and primary data (interviews with two branch managers of the case company) were used in order to fulfill the purpose of this study. CONCLUSION: Our study shows that the firm’s reason of internationalization depends on the motives such as: to increase the number of clients, to improve customer loyalty and to get additional profit. We also understand that the company’s executives prioritized wholly owned subsidiary entry mode among others. From our empirical findings we concluded that the firms’ decision about going abroad requires a preparation and implementation of well developed strategies, in order to succeed in foreign markets and to achieve company’s goals and objectives CONTRIBUTION OF THE STUDY: Taking into consideration limited number of researches in this area for the financial service sector, this study can be perceived as valuable complement to the existing researches in this field. Moreover the companies in service industry, that have plans for entering other countries, might consider this study as useful and beneficial for them in terms of getting relevant information. Undoubtedly the research may increase awareness about new financial service products, provided by the Via SMS Group. KEY WORDS: Globalization, process of internationalization, entry mode, short-term loan, IT platform.