How do business-level strategies affect multiple market servicing modes in the foreign country?

Abstract

Purpose

There is considerable literature on the firm's market servicing mode (MSM) when it enters the foreign country. However, scant research has been conducted to examine how business-level strategies (BLSs) affect internationalised firms to choose a multiple rather than single post-entry MSM. The purpose of this paper is to test the effect of three BLSs on firms’ selection of multiple MSMs.

Design/methodology/approach

Survey responses of 165 internationalised Greek small- and medium-sized enterprises (SMEs) were collected capturing the types of BLSs they used during 2008-2010 and their number of MSMs in a particular foreign country in 2011. The data were analysed using logistic regression.

Findings

The findings suggest that firms that implement collaborative and differentiation strategies are more likely to use multiple rather than single MSMs. Firms that implement penetration pricing strategies are more likely to use single MSMs, although this effect is marginally significant. Overall, the validity of the strategic choice model regarding the choice of multiple MSMs is confirmed.

Originality/value

Despite its importance, the effect of BLSs influencing MSMs has not seemingly been investigated, especially in the context of internationalised SMEs as opposed to large multinational enterprises; and, for post-entry as opposed to initial modes. The findings underline the BLS significance on internationalised SME adoption of multiple vs single MSMs in the host country.

Citation

Li, N. and Dimitratos, P. (2014), "How do business-level strategies affect multiple market servicing modes in the foreign country?", International Marketing Review, Vol. 31 No. 5, pp. 526-546. https://doi.org/10.1108/IMR-05-2013-0106