The business world at the beginning of the 21st century is characterised by a steadily increasing globalisation and the growth of international business operations. The proceeding dynamism of the global markets creates new chances not only for multinational enterprises but also for small- and medium sized companies (SMEs). Particularly, the above-average economic potential of emerging markets, especially in many countries of the Asia-Pacific region, is amongst others the leading incentive for the increasing number of cross-border expansions. In this context, the decision for the appropriate market entry strategy is already one of the most difficult ones within the broad topic of international marketing, whereas the choice of target countries with tremendous cultural differences and the specifics of the industrial goods business respectively, lead to an even higher degree of complexity in the decision for the most suitable form of organisation for the international market entry.
The main task of this thesis was to break down the untargeted theory of the market entry modes to the evaluation of a situational context of a genuine company with the help of abstract focus areas in a step-by-step approach. Starting with a general overview to the topic area of interational marketing and further the alternative market entry modes, the thesis introduces three focus areas with an anticipatory relation to the case study: ‘The Asia-Pacific region, SMEs and the industrial goods business’ stand in the centre of the examination. The core of this thesis represents a feasibility study related to the focused perspective, in which every market entry mode is investigated in its compatibility with the focus areas. The result of the study, in other words the identification of all feasible entry mode alternatives regarding the focus areas, establishes the basis for the implementation of the case study of the German AdPhos Plc., a medium sized company in the industrial goods business and its penetration of new markets in Asia. As the second core part of this thesis follows the evaluation of AdPhos’ market entry decision with means of a scoring model, whereas AdPhos’ decision for a strategic alliance is confronted with all other feasible market entry alternatives. The hereby extracted results deliver information to the suitability of the chosen organisation form regarding the individual situation of the company and finally enable the derivation of appropriate recommendations.
Table of Contents
1. Part 1: General Introduction and Theoretical Context
1.1 Chapter I: The Discussed Topic
1.2 Chapter II: The Framework of the Thesis
1.2.1 Methodical Approach
1.2.2 Content Structure
1.2.3 The Boundaries of this Discourse
1.3 Chapter III: Introduction to the Case Study and the Writer’s Motivation
2. Part 2: Introduction to International Marketing
2.1 Chapter IV: The Trend Towards Internationalisation
2.1.1 Internationalisation of SMEs – Key Players in a Global Economy?
2.2 Chapter V: The Definition of International Marketing
2.3 Chapter VI: The Process of International Marketing
2.3.1 Market Entry Strategies - The Focus of this Thesis
2.3.2 International Marketing and its Link to International Strategy
3. Part 3: International Strategy - Market Entry Modes
3.1 Chapter VII: Incentives to Go Global
3.1.1 Company Internal Factors
3.1.2 Company External Factors
3.2 Chapter VIII: International Corporate-Level Strategy and its Correlation to Market Entry Strategy
3.2.1 Multidomestic Strategy
3.2.2 Global Strategy
3.2.3 Transnational Strategy
3.3 Chapter IX: International Market Entry – Overview
3.3.1 Key Decision 1: Where? – Country Choice
3.3.2 Key Decision 2: When? – Timing Strategy
3.3.3 Key Decision 3: How? – Market Entry Mode
3.4 Chapter X: Three Chosen Focuses
3.4.1 Geographical Focus: The Asia-Pacific Region
3.4.2 Focus on Company Characteristics: SMEs
3.4.3 Focus on the Business Type: Industrial Goods Business
4. Part 4: Feasibility Study of the Market Entry Modes
4.1 Chapter XI: Introduction to the Feasibility Study
4.2 Chapter XII: Feasibility Study of the Market Entry Modes in Consideration of the Three Chosen Focuses
4.2.1 Exporting
4.2.2 Licensing
4.2.3 Franchising
4.2.4 Foreign Contract Manufacturing Agreements
4.2.5 Strategic Alliances
4.2.6 Joint Ventures
4.2.7 Acquisitions
4.2.8 Greenfield Operations
4.3 Chapter XIII: The Result of the Feasibility Study
4.3.1 The Answer to Sub-Question 1 of the Research Problem
4.3.2 Additional Interpretation and Conclusion of the Feasibility Study
5. Part 5: The Asia-Pacific Market Entry of a German SME
5.1 Chapter XIV: The AdPhos Plc.
5.1.1 Corporate History
5.1.2 Company Profile
5.2 Chapter XV: The Asian Coil-Coating Market – A Short Digression
5.2.1 Introduction to the Coil-Coating Industry
5.2.2 Comparison of the Global Coil Coating Markets
5.2.3 Conclusion
5.3 Chapter XVI: AdPhos’ Market Entry Into the Asia-Pacific Region
5.3.1 Incentives to Enter the Asia-Pacific Region
5.3.2 Chronology of the Asia-Pacific Market Entry
5.3.3 Analysis of AdPhos’ Market Entry Strategy
5.4 Chapter XVII: The AdPhos Plc. and Serwik Co., Ltd. in Bangkok, Thailand – A Strategic Alliance
5.4.1 Introduction
5.4.2 Characteristics of the Strategic Alliance
6. Part 6: Outlook, Evaluation and Resume
6.1 Chapter XVIII: Outlook
6.1.1 Future Market Trends in the Asia-Pacific
6.1.2 Future Developments of the Strategic Alliance
6.2 Chapter XIX: Evaluation of AdPhos’ Market Entry Mode Decision
6.2.1 Introduction to the Evaluation Model
6.2.2 The Result of the Scoring Model – Quantified Evaluation
6.2.3 The Answer to Sub-Question 2 of the Research Problem
6.2.4 Additional Interpretation
6.2.5 Derived Recommendations
6.3 Chapter XX: Resume – Final Statement
Objectives and Core Topics
This thesis aims to establish a structured guideline for Small and Medium-sized Enterprises (SMEs) in the industrial goods sector to evaluate appropriate market entry modes for the Asia-Pacific region. The core research question addresses which entry modes are feasible for such companies and how they can be evaluated within a specific situational context using a scoring model.
- International market entry strategies for SMEs
- Economic and structural characteristics of the Asia-Pacific region
- Industrial goods and project business marketing requirements
- Feasibility assessment of various market entry modes (exporting, licensing, strategic alliances, etc.)
- Quantified decision-making models for market entry evaluation
Excerpt from the Book
3.4.3 Focus on the Business Type: Industrial Goods Business
The third chosen focus points out the industrial goods business. So called capital goods and investment goods respectively, are usually associated with all goods bought by organisations rather than by individual consumers. In order to differentiate capital goods from regular consumer goods it is necessary to distinguish between who actually buys the product and whether this is an organisation (e.g. an industrial firm) or the end consumer. However, a more precise definition is important, as for example the American term of Business-to-Business (B2B) marketing is defined in broader terms and also includes the transaction of goods to trading companies which redistribute the goods to the end consumers. Hence, the herein chosen focus is rather orientated towards the self-contained marketing discipline of Industrial Marketing; excluding the marketing of goods to pure trading organisations. Consequently, industrial goods are defined as products purchased by organisations to produce further products which are not being distributed to the end customer. In all further discussions, the word industrial goods rather than capital or investment goods will be used according to the explanation above.
Accordingly, customer orientation in the industrial goods business means dealing with whole organisations as procurement carriers rather than with individual consumers. Organisations often come to a purchasing decision with the activation of multiple managers, or even multiple organisations, involved in the purchasing process. This leads to a change of the involved marketing processes. In comparison to the marketing of consumer goods, a range of specific challenges must be considered in industrial marketing. In the following list a selection of characteristics of the purchasing process of industrial goods is summarised:
Summary of Chapters
Part 1: General Introduction and Theoretical Context: Provides an introduction to the research topic, defines the framework and research question, and introduces the case study of AdPhos Plc.
Part 2: Introduction to International Marketing: Examines global trends in internationalisation and defines the core principles and processes of international marketing.
Part 3: International Strategy - Market Entry Modes: Discusses the incentives for globalization, international corporate strategies, and provides a systematic overview of market entry modes.
Part 4: Feasibility Study of the Market Entry Modes: Implements a detailed feasibility study evaluating different entry modes based on the three identified focuses: Asia-Pacific region, SMEs, and industrial goods business.
Part 5: The Asia-Pacific Market Entry of a German SME: Applies the theoretical and feasibility findings to the practical case study of AdPhos Plc. and its strategic alliance with Serwik Co., Ltd. in Thailand.
Part 6: Outlook, Evaluation and Resume: Concludes the thesis by evaluating AdPhos' entry decision using a scoring model and providing recommendations for future development.
Keywords
International Marketing, Market Entry Modes, Asia-Pacific Region, SMEs, Industrial Goods Business, Feasibility Study, Strategic Alliances, Joint Ventures, Greenfield Operations, Scoring Model, Exporting, International Strategy, AdPhos Plc., Market Entry Barriers, Coil-Coating Industry
Frequently Asked Questions
What is the primary focus of this thesis?
The thesis focuses on evaluating appropriate market entry strategies for German Small and Medium-sized Enterprises (SMEs) within the industrial goods sector that intend to enter the Asia-Pacific region.
What are the core research questions?
The research is guided by two sub-questions: which market entry modes are feasible for SMEs in the industrial goods business entering the Asia-Pacific region, and how can these modes be evaluated within a specific situational context?
Which scientific methodology is applied?
The author uses a structured, step-by-step approach: first, a general theoretical analysis of market entry modes, followed by a feasibility study filtering these modes against three specific focus areas, and finally a case-based evaluation using a scoring model.
What defines the industrial goods business in this context?
The thesis defines industrial goods as products purchased by organizations to produce further products which are not distributed directly to end consumers, characterized by complex purchasing processes and high-technology needs.
Why are SMEs the primary focus?
SMEs are identified as key players in national economies that often face specific challenges in internationalization, such as limited financial resources and a lack of market knowledge, necessitating a more focused, step-by-step approach to market entry.
Which case study is utilized?
The study centers on the German SME "AdPhos Plc.," a high-tech specialist in infrared technologies, and its strategic alliance with the Thai company "Serwik Co., Ltd."
What are the key results of the feasibility study?
The study concludes that strategic alliances are highly compatible, while indirect export modes or licensing are often less feasible for the specific requirements of the industrial project business in the Asia-Pacific region.
How does the evaluation model work?
It uses a scoring model where various objectives (e.g., control, flexibility, risk minimization) are weighted by the company’s management and applied to different market entry modes to determine the most suitable strategy for their specific situation.
- Citation du texte
- Dipl.Ing.(FH) MSc. Thomas Andexer (Auteur), 2006, Analysis and Evaluation of Market Entry Modes into the Asia-Pacific Region, Munich, GRIN Verlag, https://www.grin.com/document/114088
