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Sustainable Market Entry Strategy under a Supply Chain Environment

Yanjie Wu () and Sujuan Wang ()
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Yanjie Wu: School of Economics and Management, Shanxi University, Taiyuan 030006, China
Sujuan Wang: Research Center for Management and Decision Making, Shanxi University, Taiyuan 030006, China

Sustainability, 2021, vol. 13, issue 6, 1-15

Abstract: Firms routinely face the challenging decision of whether and how to enter a new market. Inspired by the practice of Chinese household appliance firms sustainably entering the rural market from the urban market, Tesla and Topshop entered the Chinese market from their own. We model a supply chain system composed of a manufacturer and a retailer to investigate entry strategies for facing a new market. These sustainable entry processes can help enterprises better achieve their own promotion and increase profits. The equilibrium solutions indicate that (1) the manufacturer’s exclusive entry mode is “market development” entry, while the retailer’s exclusive entry or joint entry mode can achieve “dual benefit” entry under certain conditions; and (2) both the manufacturer and the retailer prefer the joint entry mode. It is the only Nash equilibrium. Monopoly firms dominating the new market may not be profitable all the time. Appropriate competition can bring about a win-win situation. These results provide theoretical proof for the preference and rationality of the rural market entry mode in the Chinese household appliance industry and of the overseas market entry mode for international enterprises.

Keywords: supply chain; market entry; entry mode; exclusive entry; joint entry (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2021
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