Market entry strategies in the Turkish automotive industry
Akpinar, Murat (2013)
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Akpinar M., (2013). Market entry strategies in the Turkish automotive industry. , Die Schwarzmeerregion als Wirtschaftsraum: Umfeld, Risiken und Chancen., p. 77 - 103, Fachhochschule des BFI Wien. URN:NBN:fi:amk-2017090614863
Initial and subsequent market entry mode choices of multinational enterprises (MNEs) depend on MNE managers’ perceptions of the potential to capture additional competitiveness by internalizing their unique firm-specific advantages (FSAs), also called ownership (O)-specific advantages, together with the host countries’ country-specific advantages (CSAs) also called location (L)-specific advantages (Dunning 1988; Hennart 2009; Rugman et al. 2012). During the last decade we observe a significant shift of automotive production in Europe from the West to the East, and Turkey has been one of the major beneficiaries of this change. In this paper we analyze the roots of Turkey’s evolving CSAs and try to understand their differing impacts on market entry strategies of MNEs in the automotive industry with the help of the diamond model (Porter 1990). We apply a longitudinal approach in our empirical study and focus on developments in the period between the years 2000 and 2010. We find out that Turkey’s national diamond has improved over the decade led by improving political leadership and stability, as well as institutional reforms and consequent economic stability following the banking crisis in 2001. We also find out that the country’s diamond has strengthened by the implementation of the customs union in 1996 and the beginning of membership negotiations with the European Union (EU) in 2005. Despite the fact that these developments have led to a fast growth of the automotive industry in Turkey, we notice that MNEs have responded differently in their market entry strategies, and these differences rely on the match of their strategic positions and market entry motives with CSAs. Based on our observations we make clear propositions that link market entry choices to generic strategies and market entry motives. We recommend further similar longitudinal research in different countries and industries to test our findings.