Analyzing Factors influencing Market Entry by Foreign Service Firms into developing Markets

Abstract

The purpose of this research is to analyze factors impacting the market entry of international service companies operating in Cambodia. Eight international service firms operating in the service sector in Cambodia have been selected to be the target of the study. Finally a firm, Manulife Cambodia, one of the world‟s leading insurance firms has become a single case study for the research. A qualitative method was used for this study and the CEO and General Manager of the firm was a valuable source of information. This research was specifically aimed at finding the answer to the given research questions: 1) Why do MNCs enter developing countries? And, 2) What influences the international service firm to enter the developing market of Cambodia? The results indicate that nine propositions were existed from the study. Five of the six propositions that had been posed were confirmed, while four new factors were discovered through this study. One factor, CEO characteristics was discarded. Customer familiarity with new product/service, host government‟s ownership policy, firm‟s commitment to certain geographical region, and customers‟ adaptation to technology are new factors found from this study, while cultural distance, governance quality, political risk, economic growth, and a firm‟s geographical experience were confirmed. The results of this study could add to the current literature about the internationalization of foreign firms operating in the service industry of host countries. This study is open for further development since the research used one interviewee and one firm as the sample of the study. Both qualitative method and quantitative method could be applied.