eThesis - School of Business electronic theses

Objectives of the Research

The purpose of this research is to study the entry mode strategies of Japanese electronics manufacturers entering the Russian market and how the entry mode strategy influences the distribution strategy and the transportation route selection. Additionally the objective is to examine what other factors influence the choice of transportation route to Russia, and what are the benefits of using one route over the other. In the study three routes of the Baltic Sea are compared: Finland, the Baltic countries and St. Petersburg.

Methodology

The research is a qualitative single case study. Structured interviews were used for data collection, as well as other materials provided by the company and found on the company web pages. Data collection and analysis were done around the themes of market entry modes, distribution strategy and transport route selection.

Findings and Conclusions

The main findings of this thesis suggest that the entry mode strategies of companies operating in Russia have developed over time from non-equity to equity entry modes. Companies are finding the environment more suitable for FDI and are therefore establishing sales subsidiaries in the country. The institutional environment of Russia affects the entry modes as the factors affecting the strategies may not be the same as in the western countries. The distribution strategy closely follows the entry mode strategy, and needs to be developed as the entry mode strategy changes. Both of these strategies are guided by the tradeoffs between costs and services as well as efficiency and responsiveness. As the companies decide on an appropriate strategy, the transportation route is selected to support this strategy. Routes that offer better lead times can present companies a change to have better customer service, however reliability needs to be also considered to ensure product availability. On top of these, the costs are also important factors companies consider when selecting the most suitable transportation route.

Key words Entry mode strategy, distribution strategy, transit traffic, gateway, Russia, transportation route.