The SMEs? Internationalization Strategy --Foreign Market Entry Modes Selection
The SMEs? internationalization strategy?Foreign Market Entry Modes selection Title: 1st of June 2006 Date of the Seminar: Bus 809. Master thesis in international marketing Course: Han xiao Author: Ulf Elg, Associate professor, Lund University, Sweden Advisors: Ying Bin, Associate professor, Zhongnan University of Economics and Law, China. Guest researcher, Lund University, Sweden Internationalization, entry mode, SMEs, foreign market Keywords: The purpose of this study is to understand the internationalization process of the SMEs, and try to define the motives and internal factors impact their foreign market entry mode selection. Thesis purpose: This thesis is based on qualitative method using case study. The primary information sources are the interviews with key-persons in internationalization process of SMEs Methodology: The literature review in this study concerns areas of SMEs? motives for internationalization, foreign market entry mode approaches and influence of internal & external factors. Theoretical perspective: The empirical data consisted of case studies of two Chinese companies active within the packaging industry and located in east and south coast of China. In-depth Interviews were conducted in the semi-structure form. Empirical data: Findings show that the level of demand for SME?s products in foreign market is the major determinant for SMEs to go international. For the SMEs to be able to compete in the foreign market, they should have unique products with flexible pricing strategy. SMEs, due to their small size and limited resources, are more or less forced to use more simple and less costly entry modes, thus, most middle and small sized companies begin their internationalization with various forms of the export mode where less control and fewer resources to move abroad is needed.