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Successful foreign market entry by comparing business modeling with culture

Albers, Eline (2016) Successful foreign market entry by comparing business modeling with culture.

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Abstract:ESPS from Almelo wants to enter the German market successfully in order to do this they asked me to perform a research about this subject. The objective of this study is to gain insight in the cultural differences that exist between doing business within Germany and doing business within the Netherlands; which actions should a business have to take to successfully enter the German market. Can culture be compared with business modelling theory to explain the successfulness of a foreign market entry of such a business? To answer these questions it is important to find an answer to the research question: “In what way should a business alter its marketing strategy to successfully enter markets abroad, taking into account cultural differences in doing business into account?” Special importance is given towards the literature of foreign market entry, culture, communication, business modelling theory where channels and customer relationships are discussed and at last, the theory of the resource based view, VRIO and preferred customer relationships. Comparing this literature results in an explanatory model which can possible be used by firms when these firms want to enter market abroad. In order to investigate if this model can be validated to use by other businesses there is research conducted in the form of literature research and interviews. This study can be regarded as a qualitative research in which semi structured interviews are held with fifteen respondents. These respondents can be separated within five internal and ten external respondents. Among these ten external respondents were three German companies, two professors, two Dutch companies, one cross border business (umbrella organization) and two students who are added later towards this research to test differences between generations. In order to show the result of the interviews which are taken there is provided a case study considering the change ESPS has to make considering the differences between doing business within Germany and doing business within the Netherlands. After that, the analyses of answers given by the respondents within the interviews will follow. What can be stated when comparing these answers with the already existing literature? Is it possible to use and combine these different subjects in order to create a model which can be used by businesses that wants to enter (foreign) markets? The most important findings from the coupling between the literature and the interview findings are that hierarchy will affect the way business are done within Germany. One should communicate within a formal manner and use formal forms of address to keep distances and be courteous, the right communication channels have to use of new media will differ between cultures, these different channels have to be used within different markets in order to build customer relationships and eventually to get to a preferred customer status which will be dependent for getting a (sustainable) competitive advantage on a foreign market. The question is whether the proposed model can be used by a business that wants to enter a (foreign) market. It can be assumed that this model will be appropriate to use, because often relevant concepts are used. Only in the case of culture there is concept used which is developed many years before, but on the other hand these Hofstede perspectives are one of the most famous definitions regarding culture. Therefore it can be concluded that this model will be relevant to use that provides a solution for firms that want to enter (foreign) markets successfully. Possible limitations of this research can be that interviews are based on perceptions and there will be given answers which can be biased. Considering this research there will only be looked at the right side of the business model, especially towards channels and customer relationship which can be related towards the business modelling theory of Osterwalder and Pigneur (2010), but there can be other differences considering this business model canvas. Differences within regulations about bank guarantees are not done within this research yet. For future research, this could be of particular interest.
Item Type:Essay (Master)
ESPS, Almelo, the Netherlands
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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