Importance of networks for international new ventures entry to Russian and Ukrainian steel industry market
1University of Oulu, Oulu Business School, Department of Management and International Business, International Business
|Online Access:||PDF Full Text (PDF, 1 MB)|
|Persistent link:|| http://urn.fi/URN:NBN:fi:oulu-201405211435
|Publish Date:|| 2014-06-02
|Thesis type:||Master's thesis
Networks and their role in internationalization process of International New Ventures (INVs) are believed to be of high importance. Entry to emerging markets, where network ties are considered to be a great success factor, enhances the significance of network ties, especially for young firms.
The purpose of this Master’s Thesis was to study establishment of network relationships and securing right position for International New Ventures in existing networks of Russian and Ukrainian emerging markets. Particularly, steel industry in Russia and Ukraine was selected as a context of the study.
Qualitative approach was chosen for this research and empirical study was carried out through semi-structured interviews. Themes for the interview were indicated in relation to covered literature and theoretical constructs. Representatives of eight companies within Russian and Ukrainian steel industry network were interviewed. Selected sample consisted of companies that vary in specialization and size, which allowed to collect responses from different perspectives. Data, obtained through interviews, was first analyzed separately in relation to outlined themes. Then, conclusions were drawn by aligning theoretical constructs with empirical findings.
The results indicated that while network ties indeed play an important role in partnership establishment and securing position on target emerging market, they do not serve as a guarantee of desired spot in desired network. Presence of newly internationalizing firm in right network undoubtedly helps to operate in the emerging market and obtain customer base faster, however factors like quality and favorability of products, price, warranty conditions and time of delivery were found to be of greater importance to successful market entry. Penetration to target network requires combination of proactive and reactive measures of internationalizing firms, including exploitation of different channels.
Based on the findings of the study, propositions for INVs management were given at the end of the thesis. Main contribution of the study is combination of network theory and INVs internationalization in relation to emerging markets. It was concluded that internationalizing firm should rely on the product and value it has to offer for target market. Being entrepreneurial in its nature firms can benefit from flexibility and seek for arising opportunities in desired networks, while maintaining the existing ties.
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