The Theory of Temporary Competitive Advantage in Internationalization - Dissertation Example

?Introduction Increasingly competitive markets and the expansion of large organizations have made it important for the firms to look into the new strategic options to expand and lessen the impact of fierce competition on their performance. In order to expand and tap into the new potential resources and markets, entering into the new markets therefore has become one of the viable strategic options for the firms to peruse and explore. However, expanding into the new and foreign markets carry relative higher and more complicated risks which organizations have to mitigate or manage in order to successfully enter and operate into new foreign markets. The overall complexities of entering into the foreign markets therefore require that the international firms must adapt a strategic approach in order to ensure that they successfully enter access and operate into the foreign markets. (Sun,1999) Adapting strategic approach is also necessary in the sense that it allow the international firms to better analyse the markets in which they are going to participate and gain a better understanding of the overall external environment. This is also critical owing to the fact that understanding external environment in strategic manner allows international organizations to minimize the risk and better tap into the available opportunities in order to create more value for their shareholders. What strategic options can be developed in order to enter into the foreign markets therefore is the key question which this research study proposes to explore and analyze. With special reference to the British Telecom (BT) this research study will look into the exploration of the development of different strategic options to access foreign markets for BT. Aims of the Research As discussed above that this research study will look into the overall process of the development of strategic options for accessing the foreign markets with special reference to British Telecom. The overall purpose of the research therefore is to explore and understand as to how the challenges of accessing the international foreign markets can be tackled with the help of prudent strategic management process and how this process can actually help BT to make a successful entry into the market. Since accessing foreign markets require significant amount of investment and risk taking, finding a better strategic approach will always help the organizations to maximize their returns on the investment and achieve better results. This research will therefore focus on understanding as to how BT can develop effective strategic options to enter into foreign markets. Research Questions This research study aims to explore following research questions: 1. Can adapting a strategic approach for accessing foreign markets be helpful for BT? 2. How the different strategic options can be set for accessing the foreign markets? 3. What criteria can be used to successfully access the foreign markets? 4. What can be the most suitable methods or alternatives through which foreign markets can be accessed by BT? Based on the above research questions, the overall focus of the research will therefore be on the exploration of the above mentioned key research questions. Literature Review Globalization has made it essential for the firms to look for the new ways to enter into the markets and sustain themselves among the fierce competition. (Ahokangas, Juho & Haapanen 2010). One of the basic strategic approaches adapted by the firms amid this competition is to look into the opportunities of entering into new and foreign markets in order to increase the market share and tap into cheaper sources of raw material and labor. (Koch, 2001). A closer look at the theories of why the firms will actually look into the options of accessing the foreign markets would suggest that the different theories have emerged over the period of time. The internationalization theory uses the transaction cost analysis to provide viable strategic options in terms of developing the strategic options to access the foreign markets. (Koch, 2001). The eclectic theory has been developed in order to overcome some of the shortcomings of the internationalization theory and attempted to provide a comprehensive answer to the issues such as ownership, location as well as the internationalization advantage. However, this theory fails to provide the answers to the questions such as why the same firms with same strategic capabilities and advantages chose different modes of entry into the foreign markets. (Enderwick,2011). One of the most important strategic options which international firms have to chose or develop is to decide upon the mode of entry into the foreign market. Deciding on the mode of entry is critical due to the fact that the international firms have to actually evaluate the different strategic factors and their relative impact on the firm before adapting or choosing any strategic alternative. What is also however, important to understand that the overall organizational capabilities and competencies are the major deciding factors in terms of developing and evaluating options to access the foreign markets. This argument is based on the resource based view of the organizations suggesting that the strategic choices made by the firms are largely based upon the core competencies of the firms and how the firms can actually utilize them in order to access the new foreign markets. The decision to access the foreign markets can potentially take two forms i.e. high control mode and low control mode. In high control mode, international firms actually tend to access the foreign markets through their own wholly owned subsidiaries or they operate majority owned subsidiaries in the foreign markets of their choice. However, in low control modes, international firms tend to access the foreign markets through other strategic arrangements such as licensing, contracting and exporting etc. The decision to adapt which control mode therefore depends upon the overall strategic objectives of the firm and how they attempt to view their future prospects in the chosen foreign markets.( Chiao, Lo, & Yu, 2010) The high control mode is mostly exercised where the international firms tend to develop some sort of personal relationships and are willing to adapt to the needs and wants of the foreign buyers more closely. The low control mode however, provides strategic options which may be entirely based upon the different strategic choices of the firm. Such strategic choices may include gaining gradual understanding of the new markets without assuming too much risk in the beginning.( Lindstrand, 2011). The resource based view of the firm further suggests that the firm’s evaluation of the different strategic options to access the foreign markets depends upon how well the firm is able to exploit its own core competencies. Exploitation of the core competencies allow the firms to actually look into their internal strengths and how they can actually utilize such internal strengths to take advantage of the external opportunities available in the international market. Methodology Methodology is the process of adapting different research methods in order to further explore the intended research questions. (Biggam. 2008) It allows the researchers to understand as to what is achievable theatrically and how realistic the overall claims for achievements can be. (Cohen, Manion & Morrison 2007) In order to perform this research, the researcher aims to employ a mix of different research methods in order to fully explore the research questions. (Saunder, Lewis,Thornhill,2007). This research study will therefore be formulated mostly by using the desktop research however; the researcher also intends to employ some primary research methods also. To achieve the overall research objectives, the researcher will first explore the possibility of surveying the existing business literature available on the topic to formulate effective theoretical foundation. This will be done with the aim to highlight the underlying themes which have been discussed by the earlier researchers besides gaining an insight into what type of research questions and issues have already been raised. The overall approach towards research At the inception of the research, the common approaches considered by researchers are always based upon whether the research will be qualitative or quantitative. (Dawson,2009). Quantitative methods of research are based upon collecting the statistical data through various means and than subsequently performing the different statistical techniques in order to create a link between one set of information with another.( Fisher, 2007) Qualitative research however, will however, be more focused upon the exploration of the existing research material in order to understand the overall strategic process and how it is adapted when the firms actually contemplate upon making an entry into the foreign market. The overall context of this research study will therefore be largely based upon the qualitative research techniques. Secondary Research The researcher aims to study the different sources of literature review, academic articles, industry journals as well as different text books in order to collect the useful information. The overall aim of conducting the secondary research will be to explore as to how the international telecommunication firms specially, have made entry into the foreign markets and what strategic options were excercised in order to make a successful entry. Primary Research The researcher aims to conduct the primary research also in order to gain a first hand insight into how the overall strategic process is adapted by the telecommunication firms in order to access the foreign markets. In order to achieve this objective, researcher aims to conduct the personal interviews and develop questionnaires to collect the data. The primary research will however, be limited in the sense that the researcher will only focus on very few firms due to the resource and time constraints. Personal Interviews The researcher aims to conduct personal interviews with the managers from British Telecom (BT) operating into the foreign markets. These personal interviews will based upon open ended questions and will explore the overall process of how the firm took the different strategic approaches in order to access the foreign markets. Personal interviews will be based upon open ended questions. Timeline and Research Constraints Due to the overall limited scope of this research, the researcher specially anticipates that due to resource and time constraints, the research may be limited in its scope. Further, due to the inherent limitations of the different statistical methods and techniques to be used in this research, this research may not provide accurate description or results which have been anticipated by the researcher. The researcher also aims to complete this study in different stages and as such the initial phase will be completed with the submission of this research proposal and its subsequent approval. The researcher aims to complete the whole research within the total period of 4 months however, the submission of literature review will be completed by the end of Easter Vacations in April 2011. Ethical Considerations Researcher aims to conduct this research with highest ethical considerations and will adhere to the university guidelines in terms of plagiarism and conducting research in highest ethical manner. References 1. Ahokangas, P, Juho, A, & Haapanen,L (2010), Toward the theory of temporary competitive advantage in internationalization, in (ed.) Enhancing Competences for Competitive Advantage (Advances in Applied Business Strategy, Volume 12), Emerald Group Publishing Limited, pp.121-144 2. Biggam.J(2008) Succeeding with your masters Dissertation-A step by step handbook. McGraw-Hill Education, England 3. Chiao, Y, Lo, F & Yu, C, (2010). Choosing between wholly-owned subsidiaries and joint ventures of MNCs from an emerging market. International Marketing Review, 27 (3), 338-365. 4. Cohen.L, Manion.L, Morrison K(2007) Research Method In Education.6th edition.Routledge Newyork 5. Dawson.C(2009)Introduction To Research Methods:A Practical guide for anyone undertaking a researchproject.4th edition How to Books Ltd,Oxford 6. Enderwick,P, (2011). Acquiring overseas market knowledge: a comparison of strategies of expatriate and immigrant employees. Journal of Asia Business Studies,, 5 (1), 77-97. 7. Fisher .C(2007) Researching and writing a dissertation: A guide book for business students.2nd edition, Pearson Education, Harlow 8. Koch, A, (2001). Factors influencing market and entry mode selection: developing the MEMS model. Marketing Intelligence & Planning, 19 (5), 351-361. 9. Koch, A, (2001). Selecting overseas markets and entry modes: two decision processes or one?. Marketing Intelligence & Planning, 19 (1), 65-75 10. Lindstrand, A, (2011). SMEs' dependency on banks during international expansion. International Journal of Bank Marketing, 29 (1), 65-83. 11. Saunder, M, Lewis P,Thornhill A(2007) Research Method for Business Student 4th edition.Pearson Eucation.Essex 12. Sun, H, (1999). Entry modes of multinational corporations into China’s market: a socioeconomic analysis. International Journal of Social Economics, 26 (5), 642-660. 13. Welch, L, Benito, G & Peterson, B, (2007). Foreign Operation Methods: Theory, Analysis, Strategy. 1st ed. Northampton, MA: Edward Elgar Publishing. Read More