The Modes of Entry Preferred By Indian IT (Software) Companies to Enter South Africa

Abstract

Context and Problem Statement: Since globalization has influenced many firms to look for potential markets away from their home country, the modes of entry decision has gained importance. The choice of entry mode has a significant influence on the success of the firm’s operations thus it is a critical decision to make. However, existing literature on service firm’s entry mode decision and its influencing factors are limited, especially those from emerging economies. This study was thus aimed at investigating the modes of entry that were preferred by Indian IT firms entering South Africa. Method: Three firms were included in the study. Qualitative methodology was used to collect (openend interview) and analyze (content analysis) the data. Four top management people were interviewed from three participant firms. The recorded interviews were then transcribed into text data which was then analyzed using constant comparison method. The empirical indicators from data were compared with each other during analysis. Results: The results suggest that the choice of entry mode is influenced by the interplay of various factors. This study shows that the factors that influenced the Indian IT service firms are similar to those of manufacturing firms, but may differ in their degree of influence. The study also finds “time of entry” to be a major category/factor that may play a vital role in influencing the entry mode decision.