Foreign Retail Entry Strategy: Empirical Support for the Use of the Independent Entry Strategy in an Uncertain Developing Market Environment

Abstract

Developing markets have been shown to
have institutional frameworks that differ from that in
developed economies and greatly affects the
transaction costs in the market which favours the use
of the collaborative mode of entry. This study argues
conditions exist in unstable developing markets that
support the use of the wholly owned subsidiary. It
discusses these conditions from empirical analysis of
the conditions in the Nigerian market and introduces
the need for research to focus on a wider perspective
on entry mode research suggesting a look at not just
cost minimization measures, but also value creation
and the notion of strategic flexibility under
uncertainty as advocated by the real options theory.