Sme Foreign Market Entry Mode Research

This thesis focuses on the foreign entry mode selection, mode evolution and innovation of small and medium-sized enterprises. According to cost-benefit analysis method, different entry mode brings different net revenue for the enterprises. Thus, in the static state, the enterprises only need to select the entry mode based on the NPV. However, with more foreign market knowledge and experience, the enterprises will change their strategy. When the original entry mode can not satisfy the enterprises' development, new entry mode will take the place of the original entry mode. Through a typical case, this thesis analyzes the changing trend. During the internationalization, the limited resource of an individual SME restrict its international operation. However, the SMEs can be combined into a specialized market, thus the specialized market integrate the advantageous resource of each individual SME, therefore it possess some internal advantage which the individual SME doesn't possess. The internationalization of the specialized market pushes the internationalization of the individual SME, in turn speed its own growing. In the end, this thesis analyzes the innovation of the foreign entry mode and its developing trend.The frame and corresponding contents are as follows:Chapter One introduces the research background, research route and the main contents of this thesis, then defines three concepts: internationalization, SMEs and entry mode.Chapter Two firstly reviews the main theory of internationalization: Stage Theory and Interaction Theory. Secondly, this chapter reviews the multinational enterprises theory of developing country. Lastly, the chapter reviews the market entry mode selection theory.Chapter Three provides the market selection model according to the factors which influence the market selection. The market selection theory assumes that the decision makers own enough decision making ability and sufficient information, however, this is not true for the decision makers of SMEs. So it is better to select market after confirm client but not the other way round. A case study shows how a company focusing on export selects transaction partner in foreign market.Chapter Four analyzes the internal characteristics of the entry mode and the factors which influence the foreign market entry mode. Also this chapter analyzes the selection order of the entry mode according to the cost-revenue method.Chapter Five analyzes the entry mode combination and evolution. With more resource commitment and more foreign market knowledge, the internal and external environment will change, thus the entry mode will change accordingly. This chapter discusses the changing trends.Chapter Six discusses the entry mode innovation. As a beginner to foreign market,SMEs differ from multinational enterprises from size to internal competence to external environment, so the foreign market entry mode of SMEs differ from those of MNEs. This chapter analyzes the mode innovation background and the internal advantage of the new mode.Chapter Seven draws a conclusion that since the SMEs own limited resource, the way in which SMEs internalize through the internationalization of the specialized market is practical. In the end, this chapter points out the flaw of the article and the further research direction.