eThesis - School of Business electronic theses

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Objectives of the study:

Finland and Mexico share a long and stable relationship since 1936, when they signed a friendship agreement. However, despite the long and stable relationship between the two countries, trade between Finland and Mexico could be described as limited. However, the amount of Finnish companies operating in Mexico is slowly growing. This study aims to recognize the key determinants influencing the market entry of Finnish companies to Mexico. The second key objective is to point out the key determinants influencing the market entry mode of Finnish companies in Mexico. Finally, the study aims to construct a market entry model for Finnish companies considering market entry to Mexico and offer managerial implications and key considerations upon market entry.

Academic background and methodology:

There is an abundance of data available on the business environment of Mexico; however, the data on trade relations between Finland and Mexico and Finnish companies operating in Mexico is quite restricted. The literature review builds on the extensive amount of literature available on the Mexican business environment, Finnish and Mexican relations, market entry modes and strategies and foreign trade in Mexico. In addition, the Mexican market and business environment was compared to Brazil, the largest economy in Latin America. The empirical findings were retrieved via an exploratory case study, which included two interview groups: the case company representatives and experts, authorities and researchers in relation to the Finnish and Mexican relations and the Mexican business environment. The existing literature and empirical findings were combined to form an adapted market entry model for Finnish companies to Mexico in addition to managerial implications upon market entry.

Findings and conclusions:

The empirical findings offered various key takeaways on the market entry determinants to Mexico for Finnish companies. The three most important determinants concerning the market entry to Mexico were the following: 1. Market factors, 2. Competition, and 3. Inputs (labor, natural resources and land), while the three most important determinants on the choice of market entry and operation mode were the following: 1. Global strategy of the entrant firm, 2. Tax factors, and 3. Control of operations in the target market. Based on the key determinants upon market entry and market entry mode choice to Mexico, the study offers concrete suggestions for the potential Finnish market entrants for all the important determinants, emphasizing the timing of market entry and the prevailing market conditions.