Selection of Applicable Entry Strategies

Choosing a foreign market entry mode in accordance with barriers that follow each of them is a common practice for companies that make a decision on the way of internationalization its operations. Barriers for entering the market of healthcare services of Russian Federation can be political, legislative, economical, social, time, etc. Each and every entry option varies with the strength of barriers that arise during its implementation.

Licensing and Franchising entry modes will not be considered as entry options further, due to the fact that there is no technology and trademark which can really cause interest among Russian healthcare market entrepreneurs. Moreover, the extent of participation and potential returns by the HSC is unsatisfactory low, even though barriers for entry are significantly lower, than for any other mode.

Management Contract is considered as an additional support to the Wholly Owned Subsidiary option, therefore those two entry modes are further considered as a single one. Due to the previous analysis, forming Strategic Alliance with a local medical organization is an initial step, which is inevitable for a further Joint Venture or Merger and Acquisition implementation. Thus, Strategic Alliance is further considered as a sort of “umbrella” for JV and M&A, but not as a separate entry option for HSC’s case.

Analyzing the barriers of Joint Venture and Merger & Acquisition has shown that those modes have no significant differences. These strategies have no distinct legislative obstacles examined, some administrative activities are obviously required, but today there is a wide variety of companies offering administrative services in forming any type of agreements and licenses for foreign companies. Apparently, large initial financial investments necessity is a highest barrier for implementation of both modes. After deep analysis of Joint Venture and Mergers & Acquisition applicability for the case, it has been revealed that both options have a lot of similarities in its characteristics and underlying activities, thus, those entry modes are further united into one - M&A.

There are barriers that are common for all the options. Instability of political situation in Russian Federation brings a certain extent or risk to any entry option. There are also many institutional and administrative barriers to enter the Russian market. Those can include “the biasness or discrimination towards business licensing and registration of the firms, limited and sometimes blocked access to distribution channels, uncertain political and governmental system, corruption and bribery, difficulty in finding suitable place for business setup and less transparent legal system to operate in the market.” Frequent and unpredictable changes often occur in legislation, which makes it hard to comply by foreign enterprises. (Albertini et al. 2011.)

Due to all previously stated delimitations, there are two entry modes, which possess the highest potential for the HSC’s case. Forming Merger or Acquisition with a private St. Petersburg medical organization and creating a Wholly Owned Subsidiary are the strategies, followed by totally different extent of risk, timing, financial investments and so on. Both are challenging and advantageous at the same time, so finding the one that brings the highest opportunities for the HSC is the next step of the research. Undoubtedly, besides the deep analysis of both strategies, there is a need for a real-life expert evaluation. Therefore, the demand for empirical research is now constructed.

Дата добавления: 2015-11-30