The influence of culture on the selection process of international market and entry mode

Abstract: Title: The influence of culture on the selection process of international market and entry mode. Level: Master Thesis in Business Management Authors: Samed Zaatra & Nabil Al-Taji Supervisor: Professor Ehsanul Huda Chowdhry, Ph.D. Examiner: Professor Maria Fregidou-Malama, Ph.D. Date: June 2017 Aim: The study aims to investigate the influence of cultural similarities when business entities decide to expand their business and enter a new market and it also focuses on the selecting process of the entry modes in regard to the cultural similarity. Methodology: Qualitative case study conducting semi-structured interviews as a main source for the primary data and support it with the pervious and current theoretical framework as the secondary data collection.  Findings: Many factors have an influence on the selection process of entry mode, and they are all connected to each other in some way. The main important factors are the level of risk and level of commitment. The cultural differences and similarities have an influence on the selection process of entry mode, which the more similarities, the lower risk, and vice versa. Contribution: This Study provides better understanding of the effect of culture similarity & entry modes. This study also contributes to the general business environment by which, all companies despite the fact of the size or the product line they have, they all should be aware of many opportunities and threats surrounding them when deciding to enter a new market. The study generates a viewpoint of using the similarity as a motivation for starting a business in a similar market.    Result & Conclusions:  We figured out in this research that the culture similarity has no influence on the motive behind expanding and entering new markets since the motive for companies to expand is the growth of market share, sales, and profit. On the other hand, cultural similarities and low physical distance along with an opportunity in the market is a significant motive that pushes companies toward expanding, and it will increase the companies’ experiences and the possibility of success in the culturally different market and a market with a high physical distance. Limitations: This study approach is qualitative, i.e. a limited number of companies are investigated. On the other hand, the small amount of the secondary data that was available in regards the topic was rear. Also, regarding the geographical distance between the country that we conducted the study at ‘Sweden’ and ‘Egypt’ where the headquarter of Dawlia21 is, also we only Skype interviews, it would be more reliable if it were face to face interviews. Suggestions for future research: Cultural similarity would be the main topic to consider in the field of investigation as long as there are not too many academic articles about it, so we suggest for more focus on the area of cultural similarities. The second part that would be an interesting to study would be the African market as a general and each country as accurate because we believe as researchers that the time will come, and this market will improve and get better on the economic and business levels.