A STUDY ON ENTRY MODES IN AN OLIGOPOLISTIC MARKET SITUATION

University essay from Linnéuniversitetet/Ekonomihögskolan, ELNU; Linnéuniversitetet/Ekonomihögskolan, ELNU;

Abstract: Background: One of the main distinguishing factors that we have identified between thedifferent market structures is the level of barriers to entry. Market entry barriers are relevantwhen considering new market entry. The main barriers to entry include Cost advantages ofincumbents, Product differentiation of incumbents, Capital requirements, Customer switchingcosts, Access to distribution channels and Government policy. Purpose: The purpsoe of this paper is to identify factors that may influence entry modedecisions in an oligopolistic market situation. Method: Our thesis is based on a single case study of a Danish company in Sweden. We havechosen to do a qualitative research method. We have gathered our empirical data by doing emails and face-face interviews. Conclusions: We answered our research questions such as, “What factors affect entry modedecisions?” These factors could be both internal and external but we concentrated on factorsrelated to external environment within the new market because they are decisive in the choice ofentry modes strategy within a new market since the firm usually has little or no control overthem. For this study, external factors that affected Strandmöllen AB’s choice of entry modes intothe Swedish market are: business environment, cultural distance, market barriers and competitionintensity. Our second research question is, ‘Which entry modes can a firm use to enter anoligopolistic market situation?’ Strandmöllen AB is a wholly owned subsidiary of StrandmöllenAS. The entry mode strategy was by acquisition of ScanGas, a small Swedish gas supplier. Suggestions for further research: This subject area (oligopolistic) is quite rare. We could notfind much material on entry modes in an oligopolistic situation. Authors think that with moreresources and more time, this could be an interesting area to expand academic research on.

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