Title: The entry strategy of retail firms into transition economies
Authors: Gielens, Katrijn ×
Dekimpe, Marnik #
Issue Date: 2007
Publisher: American Marketing Association
Series Title: Journal of marketing vol:71 issue:2 pages:196-212
Abstract: International entries into transition economies occur infrequently and involve considerable uncertainty. This raises
the question whether managers, who have limited own experience, take their competitors’ prior decisions into
account when deciding on their own entry timing and size and whether there is value in doing so. To address these
questions, the authors estimate a sequential hazard/Poisson regression model on the top 75 European grocery
retailers’ decisions to enter the Eastern European market. Indeed, firms pay close attention to prevailing practices
in their industry. Prior entries first serve as legitimation but eventually become a deterring factor. Moreover, rather
than just imitating the most popular or modal decision when determining the own entry timing and size, managers
pay closer attention to the actions of their home competitors, react to prior entries of same-format competitors
differently from those of different-format competitors, and adjust the observed industry practice for the specificity of
their own resources. The authors show that managers are justified in taking the combined industry wisdom into account; deviations from prevailing industry practice, in terms of both timing and size, hurt the efficiency of their
operations in subsequent years. Thus, attempts to develop own, distinct entry rules tend to be dysfunctional.
Moreover, corrective actions are easier to implement along the size than along the time dimension; the detrimental
effects of entering at a different time from the industry norm persist and even become amplified over time, whereas
the negative impact of size deviations is temporary.
ISSN: 0022-2429
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Research Centre for Marketing and Consumer Science, Leuven
× corresponding author
# (joint) last author

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