Foreign Market Entry Modes

Why does a company enter the overseas market? The company may want to increase profit and sales. They can accomplish this by creating new markets abroad, or they can increase sales on the domestic market earlier than the domestic market. Companies also go abroad to protect their markets. Challenging competitors in their own markets prevents competitors from challenging enterprises in their own markets. Thirdly, companies may go abroad to reduce production costs and seek safe supply of raw materials.

Implementation of the international market diversification strategy includes comprehensive product / market planning including selection of overseas market entry model (Root, 1987). Foreign market entry patterns are defined as institutional arrangements that allow companies to exchange their own products and services in the country (Calof, 1993). Entry models differ in the degree of control over tangible and intangible resources that are managed by the company, and transaction costs related to resource commitment (Anderson & Gatignon, 1986; Domke-Damonte, 2000) 20. As regards the impact of internationalization, regardless of the model, the view that entry into a foreign market significantly increases sales and asset revenue is supported (Daniels & Braker, 1989).

The decision making process is an important strategic process in the process of entering overseas markets. Different entry modes may be more appropriate under different conditions and entry mode is an important aspect of project success. In various entry modes, foreign direct investment is a model suitable for entering the Thai market of former Changji. Green Field Investment is an appropriate form of foreign direct investment to acquire and maintain the position in the Thai market.