Making Switches: Key Strategic Decisions When Moving From a Local, Independent Operator to a Wholly Owned Subsidiary

Author:

Petersen Bent1ORCID,Benito Gabriel R. G.2ORCID

Affiliation:

1. Department of Business Humanities and Law Copenhagen Business School Frederiksberg Denmark

2. Department of Strategy and Entrepreneurship BI Norwegian Business School Oslo Norway

Abstract

ABSTRACTEntering a foreign market entails making the important mode decision of how to operate there. But the initial mode choice is not always forever and may be reassessed as business circumstances change. The mode shifting processthat is, how switches from one mode to another unfold—has scarcely been described, so we lack a systematic outline of this process. In this article, we take a first step toward such an outline. Adopting the established distinction between the formation and implementation phases of strategy making and execution, we describe the critical strategic decisions managers need to make about how to carry out a mode switch. Regarding the formation phases, we discuss the identification and consideration of entry mode switches as viable options, and whether companies plan or not for such shifts. Regarding the implementation phases, we differentiate between the integrating and collaborating decisions that define the type of switches made by companies.

Publisher

Wiley

Reference73 articles.

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4. Foreign entry mode

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