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Marketing entry strategies by industrial services firms

Striekwold, N.J.B. (2009) Marketing entry strategies by industrial services firms.

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Abstract:The industrial services firm SPIT elektromechanica wants to expand its activities to the international market. Prior to international market entry, it is important to take a look at whether the industrial services firm even has the resources and capabilities necessary for international market entry, and whether the external environment of that foreign market is sufficiently attractive. Because the internationalization of industrial services firms has been given little attention in international management literature, a foreign market entry strategy model for this type of firm is proposed here. The research problem of this research is defined as follows: What factors are important for the internationalization of industrial services firms? The answer to the research problem was obtained through interviews held with industrial services firms already active on the international market. Research of international management literature was done and two industrial services firms were interviewed. This research concluded that the two dependent variables “industrial services characteristics” and the “nature of the supplier-client interaction” have an influence on the two independent variables “entry mode choice” and “services marketing plan”. For one firm this is portrayed in the transfer of employees, while the other firm prefers to cooperate with local agents and representatives, or establish a foreign service workshop (either through a joint venture or a sole ownership). The industrial services characteristics require the firm to be closely situated to the foreign client. Both industrial services firms became internationally active through home country clients’ requests to follow them overseas, to perform assignments in foreign markets for them. The advice for SPIT elektromechanica is to focus on the relationship with its home country clients. Through these clients it will be able to obtain assignments in the foreign market. An easier foreign market entry might also done through the use of an agent and representative, who knows the local language and culture. Opening up a service workshop might also be a good idea, enabling the firm to responds quickly to customers’ demands. This paper gives industrial services firms an idea what factors should be taken into account before international market entry. It stresses the importance of the nature of supplier-client interaction as an important factor to analyze. For international management research purposes this questions the relevance of general foreign market entry strategy models for industrial services firms and adds reasons that it requires the analysis of additional factors to be included. It shows that an additional entry mode should be added: the transfer of employees to foreign countries. Limitations of this research are that it is based on two case studies only. Future research should therefore include more industrial services firms that have international experience.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/59971
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