Markets, Strategies, and Rivalries
- New Horizons in International Business series
Edited by Jens Gammelgaard and Christoph Dörrenbächer
Chapter 6: Carlsberg in India: entry strategy in global oligopolistic industries
Firms’ internationalization behaviour and foreign market entry strategy, most notably entry mode choice, is typically studied at the firm level and/or the country level using a variety of well-established theoretical perspectives, such as transaction cost economics (Puck et al. 2009), internalization theory (Agarwal and Ramaswami 1992), internationalization process models (Johanson and Vahlne 2009) or resource-and knowledge-based perspectives (Kogut and Zander 1993; Sharma and Erramilli 2004). Scarce attention, however, is paid to the industry level perspective of foreign market entry (Buckley and Casson 1998; Graham 1992). While early foreign direct investment (FDI) literature emphasized oligopolistic industry structure and competition in the home market as a driver of internationalization (Flowers 1976; Graham 1978; Hymer 1976; Knickerbocker 1973), this notion has virtually disappeared from the contemporary international business (IB) literature. These early studies inform our extended view of foreign market entry strategy that takes global industry level characteristics into account. Understanding the industry context is important for a more insightful study of firm internationalization as global oligopolies are becoming more common (Carr and Collis 2011; Scherer and Ross 2009). They are spreading in industries such as the brewery industry, but also in media, cement, stainless steel, home appliances, pharmaceuticals and agricultural seeds. Specifically, global oligopolistic industries that are dominated by only a handful of key players worldwide are characterized by high transparency, that is to say, the key players are well known.
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