Foreign market entry modes for servitization under diverse macroenvironmental conditions: taxonomy and propositions

Arpita Agnihotri, Saurabh Bhattacharya, Natalia Yannopoulou, Alkis Thrassou

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

Purpose: The article explores how servitization influences firms' foreign market entry mode decisions. This relationship is researched under the contingent effect of macroenvironmental factors in the host country, namely, market attractiveness, institutional environment and national culture differences between the home and host country. Design/methodology/approach: The study employs a conceptual framework typology that interrelates, contextualizes and conceptualizes extant knowledge to develop explicit propositions. Findings: Based on the extant literature, using a 2 × 2 matrix, the authors delineate the influence of two dimensions of servitization on entry mode decisions: customer relationship focus and digitalization focus. They conceptualize that relationship management and digitalization-based servitization have an antagonistic effect on the need for entry mode resource commitments, and macroenvironmental factors' favorability moderates this tension. Research limitations/implications: The study extends and incorporates the servitization literature into the context of international marketing by exploring the combined effect of the two most significant dimensions of servitization, i.e. investment in customer relations versus investment in digitalization on entry mode, thus delivering valuable new insights and perspectives, as well as explicit propositions toward empirical testing. Practical implications: The authors’ framework increases foreign market managers' awareness of how servitization drives entry mode decisions of firms in international markets. Also, the framework explicates how the host country's market attractiveness, institutional environment and difference with the home country's national culture tangibly influence the relationship. Originality/value: The study provides novel insights into the implications of servitization on international marketing, particularly regarding foreign market entry mode. The study also elucidates the combined effect of two servitization dimensions, i.e. customer relations and digitalization – a critical research area in which the literature is scant.

Original languageEnglish (US)
Pages (from-to)561-584
Number of pages24
JournalInternational Marketing Review
Volume40
Issue number4
DOIs
StatePublished - Dec 4 2023

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Marketing

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