Choices of Foreign Market Strategy Based on Network Commitment Modes in Inter-firm Alliances: Cases from Automobile Industry

Abstract

Many factors lead companies to strengthen ties in a cooperative venture or develop partnerships with domestic businesses in foreign markets. Networking, especially with key actors in a market, is an unavoidable part of doing business, although culture and commitment can affect inter-firm alliances. In this paper, the impact of culture on network commitments are investigated. This study is based on the experiences of seven companies, including two French, a Japanese, a Korean, and three Chinese firms. Data is collected through in-depth interviews by general and R&D managers and the collection of secondary data related to the process entry into foreign markets of chosen cases. Our findings demonstrate that while these firms have experienced different foreign market developments in recent years, their common preference is the direct foreign investment. Nevertheless, this choice greatly depends on the national and organizational culture of the host market, which also influences the network commitment. Therefore, this paper helps business managers to choose the right foreign market strategies. Due to the confidentiality and inability to access financial information and agreements related to each agreement, information presented here are based on conducted interviews.