China Cosmetic Market Entry Channel Choice For A Foreign- Based Micro-enterprise

Intense globalization of the last few decades made foreign markets more accessible to smaller companies and have provided more opportunities for SMEs to go international. However, due to limitation of resources such important decisions as market entry mode and channel choice are still being made by passively following the opportunities given. Even though in case of SME's internationalization options are limited, the consequences of wrong, market entry mode choice can lead to major financial losses and be quite damaging for the company.The purpose of this study is to develop a method of making market entry channel decision that would be simple enough, but at the same time allow an SME to approach the internationalization rationally.We've analyzed the latest theoretical and empirical research of SME internationalization and decided to choose Dunning eclectic paradigm as theoretical background of our research as it offers the most complete view on different factors, influencing entry mode choice, including firm-dependant and market-dependant determinants. We've decided to go further and use its categories for market entry channel selection.To meet the requirement of simplicity we suggested using quantitative SWOT analysis to find out company-oriented factors, influencing, market entry mode choice and its degree of importance. We assumed, that S and W determinants, named in SWOT analysis matrix will correspond with Ownership and Internationalization advantages that are necessary for making, market channel choice decision in frames of eclectic paradigm concept. It appeared though, that, that even in spite of the fact that our hypothesis was proved to be right and the categories do match in its determinants, that the data, obtained were not enough and did not reflect the Location advantages, needed to complete the analysis. Since Oli paradigm takes into consideration location or market-dependent factors, in chapter 3 of this research we offer target (China in case of the case study company) market analysis in respect with selected Location advantages factors.In conclusion, we can say that quantitative SWOT analysis results, even though they give clear view on company Ownership and Internationalization advantages and complete the location advantage category with some factors, important for the given case company, are still insufficient for making market entry channel decisions in frames of eclectic paradigm theory. For the successful market entry channel choice the target market analysis should also be made. Along with the SWOT results, it gives us complete list of factors that allows making the most appropriate market entry channel choice with respect to target market and company peculiarities.