| In many current business situations, market entry decisions are taking on increased significance. As product life cycles shrink and competitive advantages are diminished through aggressive imitation by competitors, decisions about entry become critical. This research addresses one such decision: entry mode choice.; In this research, a model is built to predict when internal development, acquisition, and alliances modes of entry are used. A set of hypotheses are developed predicting how relatedness, centrality, strength, breadth, and availability of the firm's resources and capabilities, and the uncertainty and munificence of the new market environment influence entry mode choice, based on the risk, potential rewards, and range of capabilities of each entry mode.; In order to implement this research, a sample of entry events in multiple industries was developed, and primary and secondary data are collected about each entry event. Multinomial logistic regression analysis was used to test for the significant overall differences among the three entry modes of internal development, acquisition, and alliance, based on the independent variables, and the relative importance of each independent variable in predicting entry mode choice.; The findings in this research suggest that the firm's resource profile influences entry mode choice. Finns with a narrow range of resources and capabilities choose different entry modes depending on the relatedness of their resource profile to that required in the new market, for example. In addition, firms that have developed resources and capabilities by entering new markets through particular modes are more likely to enter through the same mode in subsequent entries The availability of internal funds leads firms to enter through internal development or acquisition, rather than alliance.; This research also explored how the role of the external environment influences entry mode choice, and it offers some provocative contradictions to previous research on alliances. Specifically, this research found that environmental uncertainty does not necessarily lead firms to choose alliances. The evidence suggests that firms may buffer the uncertainty in the new market by acquiring firms that have already demonstrated their ability to succeed in the new market. |
