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Research Article

A Case Analysis of Foreign Market Entry Modes of Korean System Integration (SI) Companies

Kim, Bowon1 · Kim, Hyeonchan2 · Lee, Yunseok1

1 KAIST, 2 Samsung SDS

Published: January 2001 · Vol. 30, No. 1 · pp. 233-269
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Abstract

This study investigated cases of overseas market entry by Korean system integration (SI) firms to identify the factors associated with their modes of foreign market entry. Building on prior research regarding foreign market entry modes of both manufacturing and service firms, the study examined the relationship between SI firms' foreign market entry modes and three dimensions: service characteristics, firm characteristics, and environmental characteristics. An analysis of 25 overseas market entry cases from Korea's five largest SI firms yielded the following results. In terms of service characteristics, higher levels of service inseparability and asset specificity were associated with entry modes involving a greater degree of control. Regarding firm characteristics, stronger strategic motivations for overseas expansion were associated with entry modes involving a higher degree of resource commitment, and when the entry situation involved client-following, independent entry was predominant, whereas market-seeking situations were characterized by joint entry. As for cultural distance, an environmental characteristic, no particular pattern in entry mode was discernible when entering culturally very proximate countries, but entry into culturally very distant countries was associated with entry modes involving a relatively high degree of resource commitment.
Keywords: 기업경영학시스템통합si기업해외시장김현찬이윤석