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Entry Modes for Manufacturers’ International After-Sales Service: Analysis of Transaction-specific, Firm-specific and Country-specific Determinants

Author

Listed:
  • Dirk Morschett

    (University of Fribourg)

  • Hanna Schramm-Klein

    (Saarland University)

  • Bernhard Swoboda

    (University of Trier)

Abstract

and Key Results This paper investigates which criteria influence a company’s entry mode choice for its after-sales service in a foreign country. With a focus on the decision between integrative and cooperative entry modes, an empirical study of 80 foreign entry mode decisions by German manufacturing companies identified determinants of particular importance for after-sales service. Country-specific variables exert a dominant influence on entry mode choice. Country risk, fluctuations in demand, and the availability of suitable service partners increase the probability of choosing a cooperative entry mode. Cultural distance from the host country leads to integrative modes. As transaction-specific variables, a difficult service quality evaluation is shown to increase the likelihood of establishing wholly-owned subsidiaries, as are high resource requirements. Service as competitive advantage also leads to the internalization of the service-function. The companies surveyed are highly satisfied with the entry mode chosen for their after-sales service in foreign markets, which implies that managerial implications can be drawn from the results.

Suggested Citation

  • Dirk Morschett & Hanna Schramm-Klein & Bernhard Swoboda, 2008. "Entry Modes for Manufacturers’ International After-Sales Service: Analysis of Transaction-specific, Firm-specific and Country-specific Determinants," Management International Review, Springer, vol. 48(5), pages 525-550, November.
    • Handle: RePEc:spr:manint:v:48:y:2008:i:5:d:10.1007_s11575-008-0035-7
    DOI: 10.1007/s11575-008-0035-7
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    2. Mukherjee Subhasree & Dhayanithy Deepak, 2017. "Effect of Inter-organizational Network on TMT – Entry Mode Choice relationship," Working papers 246, Indian Institute of Management Kozhikode.
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    5. Zhi Shen & Francisco Puig & Justin Paul, 2017. "Foreign Market Entry Mode Research: A Review and Research Agenda," The International Trade Journal, Taylor & Francis Journals, vol. 31(5), pages 429-456, October.

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