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Factors that Influence the Entry Mode Choice of Foreign Apparel Brands in Korea

해외의류브랜드 국내시장 진입방식 결정요인 분석

  • Seo, Yu-Jin (Technology Innovation & Management Graduate Program, Pohang University of Science and Technology) ;
  • Lee, Jae-Ho (Technology Innovation & Management Graduate Program, Pohang University of Science and Technology)
  • 서유진 (포항공과대학교 기술경영대학원) ;
  • 이재호 (포항공과대학교 기술경영대학원)
  • Published : 2009.11.30

Abstract

A firm seeking to enter a foreign market must make an important strategic decision of which market entry mode to use. Because entry modes involve resource commitments, the initial choice by a firm on a particular entry mode is difficult to change without a considerable loss of time and money. Substantial prior research has been undertaken to explain why firms select a particular entry mode into global markets. However, there exists limited research on this area in the field of foreign apparel brands in Korea, although some research has analyzed influential entry mode factors when Korean textile and clothing companies went overseas. This study reviews prior research on the entry mode choice and analyzes the factors that influence the entry mode choice for 510 foreign clothing brands in Korea. Price range, clothing types, distribution strategy, and cultural distance were considered as influential determinants for different entry mode choices. Crosstabs with a chi-square test and logistic regression are used for analysis. This study shows that high-priced brands and luxury brands are associated with the export orientated entry mode in the Korean market. Brands that pursued the strategy of multiple distribution channels showed a preference for a licensing mode or direct investment over other entry modes, and brands from higher-cultural-distance countries entered the Korean clothing market by licensing mode. The findings of this study are appropriate for the strategic planning of foreign apparel intent on entering the Korean market or for Korean apparel firms planning to enter the global market.

Keywords

References

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