Planned Marketing Adaptation and Multinationals’ Choices between Acquisitions and Greenfields

Abstract

International marketing studies have extensively examined the antecedents of firms’ marketing standardization/ adaptation decisions. However, it is unclear whether such decisions, once planned, codetermine the choice between buying and building foreign subsidiaries. Analyzing a sample of 150 foreign entries by Dutch firms, the authors find that the level of marketing adaptation planned for a wholly owned subsidiary is positively related to the likelihood that the subsidiary will be established through an acquisition rather than through a greenfield investment. Moreover, the authors find substantial evidence that this positive relationship is stronger for firms that (1) are establishing relatively larger subsidiaries, (2) have less experience with the industry entered, or (3) are entering less developed countries. The findings show that firms pursuing higher levels of marketing adaptation assign more value to the marketing adaptation advantages of acquisitions over greenfields, especially if the risks associated with implementing the planned adaptation level are high. In addition, firms typically strive for a fit between their international marketing strategy and their mode of foreign establishment.

Barriers to enter in foreign markets: evidence from SMEs in emerging market

“…Slangen and Hennart (2007) provided a detailed literature review on entry mode choice between greenfield and acquisitions. Recently, Slangen and Dikova (2014) examined greenfield and acquisitions from the context of marketing adaption by internationalising firms.…”

The impact of family ownership on establishment and ownership modes in foreign direct investment: The moderating role of corruption in host countries

“…Both these factors can affect an MNE's expected return and risk taking with respect to FDI, thereby influencing its choices related to market entry (Barkema & Vermeulen, 1998;Gomes-Casseres, 1989). We similarly controlled for the respective effects of real GDP and real GDP growth (Barkema & Vermeulen, 1998;Slangen & Dikova, 2014;Zejan, 1990). We gleaned all GDP data from sources provided by the World Bank.…”

Sustainable Export Marketing Strategy Fit and Performance

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