Interesting Results

Bigger Isn’t Always Better

Many large companies are seeking out new opportunities in large and fast growing markets; however, recently published research examining the success of foreign entrants into China and India showed that there was actually a negative association between firm size and entry success (larger companies were not as successful as smaller companies).

The same research also showed the mode of entry was important. Companies that retained a lot of control, for example, by entering the Chinese or Indian market via a wholly owned subsidiary, were more successful than those who entered through a means that gave them less control (e.g., a licensing agreement).

Overall, companies had greater success entering the Chinese market than the Indian market.

¹ Johnson, Joseph and Gerard J. Tellis (2008), “Drivers of Success for Market Entry into China and India”, Journal of Marketing, 72(3), 1-13.