Question

Omega, Inc., a U.S.-based maker of personal fitness trackers, is not sure about the attractiveness of entering the country of Mattica. Mattica had recently emerged as a democracy after nearly one hundred years of dictatorship. Which of the following types of entry into Mattica would allow Omega, Inc. to learn about the foreign market while limiting the firm's exposure to that market?

A. early entry
B. small-scale entry
C. large-scale entry
D. late entry
E. rapid entry

Answer 1

The correct answer is B. small-scale entry.

Step-by-step explanation:

Small-scale entry allowing the company to learn about a foreign market while limiting the company's exposure in that market, reducing the risk associated with its international activity. Small-scale entry can be seen as a way to gather information about the market before deciding to invest more resources and increase its presence.

Managers should generally consider six variables when selecting the mode of entry:

1. Company objectives, such as desired performance, market share, or competitive positioning
2. the resources and capabilities of the company (financial, organizational, technological, human, etc.)
3. foreign market conditions, such as the legal, cultural, economic environment, as well as the level of development of local infrastructure
4. the risks inherent in any type of mode of entry in relation to the company's objectives of achieving internationalization
5. the type and degree of competitiveness that exists in the target markets (current and potential)
6. the characteristics of the product or service that you want to introduce in the foreign market.