Entry Modes for Manufacturers’ International After-Sales Service: Analysis of Transaction-specific, Firm-specific and Country-specific Determinants

Dirk Morschett, Hanna Schramm-Klein and Bernhard Swoboda
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Dirk Morschett: University of Fribourg
Hanna Schramm-Klein: Saarland University
Bernhard Swoboda: University of Trier

Management International Review, 2008, vol. 48, issue 5, No 2, 525-550

Abstract: Abstract and Key Results This paper investigates which criteria influence a company’s entry mode choice for its after-sales service in a foreign country. With a focus on the decision between integrative and cooperative entry modes, an empirical study of 80 foreign entry mode decisions by German manufacturing companies identified determinants of particular importance for after-sales service. Country-specific variables exert a dominant influence on entry mode choice. Country risk, fluctuations in demand, and the availability of suitable service partners increase the probability of choosing a cooperative entry mode. Cultural distance from the host country leads to integrative modes. As transaction-specific variables, a difficult service quality evaluation is shown to increase the likelihood of establishing wholly-owned subsidiaries, as are high resource requirements. Service as competitive advantage also leads to the internalization of the service-function. The companies surveyed are highly satisfied with the entry mode chosen for their after-sales service in foreign markets, which implies that managerial implications can be drawn from the results.

Keywords: Entry Modes; After-Sales Service; Services Internationalization; Competitive Strategy; Transaction Costs (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s11575-008-0035-7

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