When the decision has been made to enter a new industry, which entry mode is most...

When the decision has been made to enter a new industry, which entry mode is most commonly used and what issues must managers address with this mode of entry?

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Expert Solution

Usually entry into a new industry is done through partnerships and joint ventures. It would be better if the other partner is either industry leader or has sufficient capabilities in the industry you are looking to enter. Collaborating and strategic alliances will lead to better opportunities for both the partners.

However, there are a few issues that managers must adress like:

Finding a good partner: It is not at all easy to find a suitable partner who is strategically campatible, has complementary skills and resources, is relatively of equal size and is financially capable.
Risk of unequal partnership: If the other partner has more say in various strategic matters or is more powerful, then the partnership is more likely to be problematic and troublesome.
Loss of control is a possible risk which must be addressed
Partners with different goals and objectives will lead to issues in future.
Lack of research and planning before the partnership will lead to detrimental outcomes
Managers must also look at possible conflicts and disputes that might arise in the future and look for ways to avoid these conflicts.

keosha answered 1 year ago

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