University of Oulu

Khan, H., Zahoor, N., Arslan, A. and Khan, Z. (2023), "Market exit and re-entry in a volatile emerging economy: a case study of Yamaha motorcycles in Pakistan", Multinational Business Review, Vol. 31 No. 2, pp. 290-312.

Market exit and re-entry in a volatile emerging economy : a case study of Yamaha motorcycles in Pakistan

Saved in:
Author: Khan, Huda1; Zahoor, Nadia2; Arslan, Ahmad3;
Organizations: 1Business School, University of Aberdeen, Aberdeen, UK
2Department of Business and Society, School of Business and Management, Queen Mary University of London, London, UK
3Department of Marketing, Management and IB, University of Oulu, Oulu, Finland
4Business School, University of Aberdeen, Aberdeen, UK and Innolab, University of Vaasa, Vaasa, Finland
Format: article
Version: accepted version
Access: open
Online Access: PDF Full Text (PDF, 0.4 MB)
Persistent link:
Language: English
Published: Emerald, 2023
Publish Date: 2023-05-09


Purpose: This study aims to understand the dynamics underpinning the exit and re-entry strategies adopted by multinational enterprises (MNEs) in an emerging market, Pakistan.

Design/methodology/approach: This study undertook an in-depth historical case study of Yamaha Motorcycles, which had initially entered Pakistan as a joint venture but had then exited and re-entered as a wholly owned subsidiary.

Findings: This study found that, despite its status as a market leader and one of the older players in the Pakistani market, changing market dynamics in the 2000s — especially the increased competition brought by more affordable (inexpensive) Chinese motorcycles and the weak enforcement of industrial policies — had pushed Yamaha Motorcycles to exit. Another factor that had contributed to its exit were differences in risk perception and strategies with its local joint venture partner (a Pakistani business group). Hence, both firm-level and institutional factors had played significant roles in Yamaha’s market exit. This study further found that re-entering in a wholly owned subsidiary operation mode had been beneficial for the firm, as it gained a significant market share due to its focus on innovation and on capturing a market niche, which had earlier not been its main focus. The findings also suggest that opportunity logics and multiple forms of learning can be important for a firm’s re-entry into a host market — such as experiential (i.e. learning from experience) and vicarious learning (i.e. learning from other organizations, including suppliers and competitors) in an emerging market context, in which institutions evolve amid political and policy uncertainty. Finally, this study found that exit and re-entry timing is an important factor for the development of competitive advantage in a host market.

Originality/value: This study is among the few to have investigated the exit and re-entry strategies of MNEs in emerging markets. The relatively short time during which Yamaha Motorcycles had been out of the market had benefited it on its re-entry, as the firm had been able to capitalize on its prior learning and ties to suppliers’ networks.

see all

Series: Multinational business review
ISSN: 1525-383X
ISSN-E: 2054-1686
ISSN-L: 1525-383X
Volume: 31
Issue: 2
Pages: 290 - 312
DOI: 10.1108/MBR-09-2022-0132
Type of Publication: A1 Journal article – refereed
Field of Science: 512 Business and management
Copyright information: © Emerald Publishing Limited.