International market entry modes

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METHDOLOGY

The third section of this research is to revel the specific methodology and method which could be applied in the empirical findings and analysis. The methodology and method design would follow the scientific research methodology design and follow the steep of research philosophy- research approach- research strategy-research method-time horizon-data collection and data analysis. And the research ethics also would be mentioned as the important part of research. Finally the summary of whole methodology would be design in a brief form of table.

Research philosophy

The purpose of the whole research is to identify and examine a pragmatic marketing entry strategy of IKEA in Chinese future market. Therefore, the aim of “practicability” of this research is really important. Because the researcher of this thesis really hopes it could be helpful and useful for IKEA further entry in Chinese market.
Research philosophy is extremely important and could even be regarded as the key point of research (Saunders, Lewis and Thornhill,2012), and this is mainly because research philosophy plays the role of “relates to the development of knowledge and the nature of that knowledge” and “developing knowledge in a particular field ”(ibis). It is obviously viewed on the (Figure 3.1) that type of research philosophy is consisted by positivism, realism, interpretivism and pragmatism (ibis). According to Saunders, Lewis and Thornhill (2012), positivism is a kind of research philosophy in the perspective of natural scientist. Remenyi et al.(1998) also defined the concept of “positivism” as “working with an observable social reality and that the need product of such research and be law-like generalizations similar to those produced by the physical and natural scientists”. Interpretivism is as another type of research philosophy was introduced by Saunders, Lewis and Thornhill (2012) which is based on the understanding of human nature as social actors. Pragmatism is also a type of research philosophy claims the research question is the key factor of research philosophy (ibis).
“Pragmatism argues that the most important determinant of the epistemology, ontology and axiology you adopt is the research question –one may be more appropriate than the other for answering particular questions”
Saunders, Lewis and Thornhill (2012,P.109).
Pragmatism is the choice of core research philosophy of this thesis. The advantage of pragmatism (Tashakkori and Teddlie,1998) is that this way of research philosophy would help to avoid drop into senseless and pointless debates of truth and reality. And the relationship of positivist and interpretivist is continuum rather than contradictions in pragmatism (Tashakkori and Teddlie,1998). These advantages would provide author with a clear and specific research idea and directly focus on the research questions. The issue of research would focus on the reasonable marketing entry strategy of IKEA in Chinese future market. The research would be carried out from the business side, and research question is in three different parts: target market selection (Where should be selected as new target market location of IKEA in China?), entry mode (Which entry mode of IKEA should be applied in the future Chinese market?) and timing of entry (Which factors would influence IKEA timing of entry in Chinese market?). However, these three parts are also divided in different potential influence factors according to the traditional international marketing entry strategy analysis. But may be not all of these factors really does influence in the marketing entry strategy of IKEA in China. Therefore, the pragmatism would help the research to avoid the unmeaning study and efficiently precisely answer the research questions.

Research approach

Also viewed from the research “onion” (Saunders, Lewis and Thornhill, 2012) on the (Figure 3.1) that there are two different research approach-deductive and inductive. Saunders, Lewis and Thornhill (2012) also aimed the mainly difference between these two research approach: deductive firstly make a clearly theory at the beginning of study and then explain and text with the specific theory, however, inductive develops theory with existing literatures into new explanations (ibis). To explain more precisely, inductive is a kind of research approach developing and basing on the existing theories and then to obtain new theory from empirical data collections (ibis).
Choosing an appropriate research approach based on this background, and the author of this thesis would use both deductive and inductive, and this is mainly because that the whole research design would follow the theory of traditional analysis of international marketing entry strategy, therefore, the “deductive” would be referred. However, “inductive approach” has a specific advantage from the perspective of empirical findings and final analysis, because it is necessary to conclude and summarize the data collection, and not all of the theory could be confirmed as a truth in the case study of IKEA marketing entry strategy in China.
The existing literature of marketing entry strategy is in three different parts: target market selection, entry mode and timing of entry, and each part could be divided in different dimension of measurements. These measurements of theory would be tested and explained with empirical data collection of IKEA specific business operation in China. The part of “target market selection” would be analyzed with the theory of “cultural distance” “geographical distance” and “market size”, and the part of “timing of entry” would be measured with the theory of “window of opportunity” “stepwise internationalization” “near market knowledge” and “world-of-mouth” .Therefore, the deduction could be refereed in this research by the way of testing the theory in IKEA business operation analysis. However, the aim of this thesis is to formulate and find specific and appropriate marketing entry strategy of IKEA in future Chinese market. And this would be a kind of knew knowledge, which is corresponded with the aim of inductive approach-“to find something new” (Saunders, Lewis and Thornhill,2012 ). Summarizing and analyzing useful data and the getting the specific knowledge are very corresponding with the purpose of inductive. Therefore, in the view of whole research design, the two research approach would be used.

Research strategy

According to Yin (2003) there are many different kinds of research, which could be used in the exploratory of research. And also viewed from the research “onion” (Saunders, Lewis and Thornhill,2012 ) on the (Figure 3.1) that research strategy could be in the form of experiment, survey, action research, grounded theory, ethnography, archival research ,case study, and case study is the last but not least (ibis).
“Case study is a strategy for doing research which involves an empirical investigation of a particular contemporary phenomenon within its real life context using multiple source of evidence” Robson (2002,P.178)
The case study usually has these characteristics according to different researches. Yin (2003) aimed that the context and the phenomenon being used doesn’t have evident boundaries in the case study research strategy. And corresponding with this viewpoint, Morris and Wood (1991) also aimed that case study usually contains gaining understandings in the research process. The most important is that “case study” research strategy is usually used in the exploratory researches (Saunders, Lewis and Thornhill, 2012). And this is mainly because that, case study strategy has a certain ability of formulating questions of “Why”, “How” and “What” (ibis). The data collection technique in case study research strategy is in the form of combination, which usually includes “interview, observation, documentary analysis and questionnaires” (ibis,P.146).
Case study research usually depends on the desire of understanding the complicated social phenomenon. The author would select “case study” as the research strategy of this thesis, and this is mainly because the whole thesis is going in the form of exploratory and it is a research of single enterprise – IKEA. And usually the case study tends to develop the research in-depth, and marketing entry strategy of IKEA in China could be developed from the traditional international marketing entry theory and mode which have already concerned in the theory part above. And also according to the “pragmatism” as the research philosophy, which has already chosen in the first part, that the research should clearly and directly answer the research questions, and these research questions are mainly concerned with the questions of “What” and “How”. Then the traditional marketing entry strategy is in three different dimensions: target market selection, entry mode and timing of entry, and these dimensions would be analyzed with different kind of data collection in a combination form. Finally, this research of IKEA very conforms to that case study usually contains the gaining understanding- the specific marketing entry strategy of IKEA in China.

Research method

There are three research method choice: mono method, mixed methods and multi method (Saunders, Lewis and Thornhill,2012 ) which is also viewed form (Figure 3.1). According to the research philosophy research approach and the research strategy, which have already referred above, that the thesis would be implemented traditional “marketing entry strategy” (Kim,1992; Woodcock and Beamish ,1994; Gaba,pan,2002; Gallego,2009) in three parts to analyze the particular “marketing entry strategy” of IKEA in China. However, each part is also analyzed with different factors. In the part of “target market selection” of IKEA in China, the research would deeply analyze with the measurement of “cultural distance”, “geographical distance” and “market size”. International market entry mode is referred in this thesis with two different forms “wholly owned subsidiary” and “joint venture”. Timing of entry is also in four different kinds of dimensions: “window of opportunity”, “stepwise internationalization”, “near market knowledge” and “world of mouth”. And also as mentioned that the research is going as an exploratory, and the data collection could be in the form of combination. Multi method could be used with both qualitative and quantitative data collection (Saunders, Lewis and Thornhill,2012 ) in order to answer different research questions in this thesis. This is mainly according to Saunders, Lewis and Thornhill (2012) that the strategy of case study usually prefers to use “multi method” to answer questions. Quantitative data collection is used to analyze the “market size” to conclude quantitative data with GDP index in the first research questions. And other research questions would be analyzed with qualitative data collection in the form of interviews and observation.

Time horizon

Cross-sectional is different from longitudinal from time aspect (Saunders, Lewis and Thornhill,2012). However, they are all time horizons for the research design (Figure 3.1). It is difficult to do a quality longitudinal study in limited time schedule, and this is mainly because Saunders, Lewis and Thornhill (2012) aimed that the data collection from “longitudinal” study could be taken into the research at least for one year as a research period. Cross- sectional is chosen as the time horizon of this thesis. All of the interviews and observations were collected from March to April 2017, this is mainly because that “cross-sectional” study also has a time limitation, and the data collection should be current. However, quantitative data collection part, in which is used to analyze “market size” of IKEA international market selection in China, and this part would use the data of GDP of China in 2016. This is because that the real official and authoritative data of GDP from Chinese State Statistics Bureau (NBS) could just be published the year before. This means that the most up to date official GDP data collection could be viewed in this year-2017 is the data of 2016.

Data collection and Data analysis

Data collection

Primary data and secondary data could be collected in order to answer the research questions (Saunders, Lewis and Thornhill,2012). And Saunders, Lewis and Thornhill (2012) defined the primary data as a new data which was collected by the researchers themselves for the research. Secondary data would be the data which has already existed, but was collected by other researchers and concluded by the specific researcher again (ibis). However, Saunders, Lewis and Thornhill (2012) also aimed that the most reasonable and scientific way of collecting data is in two steps: first step is to review the existing data which is related to the research topic from other existing researches or website and then make them as secondary data, and second step is to collect the primary data which is corresponding to the research topic by the researchers them own-selves from the interviews or other form of collections. This research will also follow these two steps at the empirical analysis part with the combination data of secondary and primary.

Secondary data collection

Saunders, Lewis and Thornhill (2012) also aimed that “secondary data includes both raw data and published summaries”(P.256), which was collected and concluded by organizations and enterprises from their own operations, and “Government departments undertake surveys and publish official statistics covering social, demographic and economic topics” (P.256)also included in the secondary data collection.
View essential information of IKEA in China
Therefore, the secondary data collection could be viewed and acquired from these different channels. First, on the official website of IKEA in China the author of this research could view some essential information of the enterprise, such as specific production information, operation principle and distribution of IKEA retail stores in China
Collect GDP data from Chinese NBS of 2016
Second, the official and authoritative GDP data from Chinese State Statistics Bureau (NBS) in 2016 of each IKEA retail store’s distributed province also would be collected in order to do the quantitative data analysis. Firstly, the GDP ranking of each province in China of 2016 would be presented to observe whether the provinces ranked by front have located IKEA retail stores. Secondly, the average GDP per person in China would be compared with GDP per person in each province which has already distributed IKEA retail store.

Primary data collection

Primary data could be collected from observation, interviews and questionnaires (Saunders, Lewis and Thornhill,2012). In the consideration of research questions which should be corresponded with research philosophy in pragmatism research (ibis) this research will make interviews and do the observation deeply connected with research questions.
Do observation on IKEA strategy map
The method of observation will be used at the part of “geographical distance in target market selection”, because it would be obvious on IKEA strategic map (retail stores distribution) to observe geography distance between the retail stores of IKEA in China and the home country-Sweden.
Make interviews from managers of IKEA in China
According to the secondary data collection the author of this research learned about some basic information of IKEA in China, there are totally 21 retail stores which are distributed in different cities and different provinces in China. The specific interviews would be conducted with different perspectives: the Chief Executive Officer (CEO) of IKEA China- Ms. Zhu and the sales managers of each retail store of IKEA in China. This is mainly because the research is in different part and different dimensions, and some deep of level questions could not get any answer from the sales managers with such relative lower position. However, the specific information of sales or operation in details also could not be explained very clearly by the senior manager. Therefore, the different perspective of interviews would be conducted to do the qualitative data analysis.

In-depth interview and Semi-Structure interviews

As mentioned above that the specific interviews would be conducted with different perspectives: the Chief Executive Officer (CEO) of IKEA and the sales managers of each retail store of IKEA in China. And according to Saunders, Lewis and Thornhill (2012) that there could be more than one type of interview in an interview design-to use multiple methods, and the semi-structure interviews and in-depth interviews are available to be used together in the exploratory research. All of the interviews are trying the best to use the format of Face-to-Face interview, although most of them via the modern media communication. Face-to-Face interviews could make interviewer and the interviewees better understand each other with facial expression and body language……However , some of the interviewees were busy with their own world and didn’t have time to give an
interview more than 20 minutes, and these interviewees received the interview questions in the written form via Email. Although the answers of interview questions are not as high-quality as the answer which was gotten from the Face-to-Face interview, some valuable interview answers are still existing.
In-depth interview
The in-depth interview was adopted with the Chief Executive Officer (CEO) of IKEA China. This is mainly because that in the exploratory research, in-depth interviews could help to formulate new insights towards the research questions (Robson,2002). Interview with the manager who has a necessary experience and high level of perspective could provide the in-depth interview with high-quality and useful information. And the in-depth interview with the Chief Executive Officer (CEO) of IKEA China is conducted towards the topic of this research: IKEA marketing entry strategy in China.

Data analysis

The frame of reference would be connected with empirical findings within the data analysis. In this research the data analysis was conducted with the multi-method: quantitative and qualitative, and this is mainly because the frame of reference is also in different part. And according to the classical international marketing entry strategy in which usually includes three different parts: market selection, entry mode and timing of entry(Kim,1992; Woodcock and Beamish ,1994; Gaba,pan,2002; Gallego,2009).
The quantitative method would be used in the part of analysis “market size” in “market selection” of IKEA in China. And others part of research data analysis will be selected qualitative. According to Saunders, Lewis and Thornhill(2012) that the quantitative data is always in a “raw form”(P.414) before was analyzed, therefore, these “raw data” really pass very limited information to researchers. So, the processing of data is really required in the quantitative data analysis in order to be useful and meaningful (ibis). And this processing could be regarded as the transformation between the “raw data” to “useful information” in the quantitative data analysis (ibis, P.414). And these “processing” usually include the techniques of “graphs, chart and statistics” to help the exploratory (ibis, P.414).
In the first part of analysis “market size” in “market selection” the GDP index of all Chinese provinces and GDP per capita in 2016 of each province which has already distributed IKEA retail stores would be collected. And two different data table would be made to help with the analysis. First data table would be made as a ranking of GDP index of each province in China in order to analyze whether the GDP will influence IKEA market selection in China. Second data table would be a comparison of GDP per capital of China and GDP per capital of each province which IKEA retail store have already distributed. And this is in order to observe whether the GDP per capital of these provinces are higher than the GDP per capital in China, thus to analyze whether the GDP per capital will influence IKEA market selection in China.
Also according to Saunders, Lewis and Thornhill (2012) that the analysis process of qualitative data includes summarizing, categorization and structuring of meanings using narrative or a mix of these process. According to Saunders, Lewis and Thornhill (2012) the summarizing would be the key point of the activities which were taken by researchers, such as interviews, observation, and written notes…… And the summarizing is the process to make long statement to the short brief and meaningful statement (Kvale, 1996).
As mentioned above that the observation on IKEA strategy map in China and interviews from IKEA managers in China would be collected as the qualitative data collection and the process of these data collection are also very important for the data analyze. By observing the IKEA strategy map in China (distribution of IKEA retail store in China) could help to analyze and summarize the “geography distance” in first part target “market selection”-whether IKEA tend to select the target market with low distance between the existing target market(or retail store location) and home country(Sweden).
And also as mentioned above that the interviews would be conducted with different perspectives: the Chief Executive Officer (CEO) of IKEA is an in-depth interview and the interviews from sales managers of each retail store of IKEA in China are semi-structure interviews. Summarizing and categorization are especially important in “in-depth interview”. The in-depth interview with the Chief Executive Officer (CEO) of IKEA China was conducted towards the big topic of: IKEA marketing entry strategy in China, therefore, the summarizing the useful information for the research analysis is very necessary. The qualitative data of in-depth interview with CEO of IKEA China would be summarized to analyze the “cultural distance” in first part “market selection” and the second part “entry mode” and the third part “timing of entry”. Among the three parts, the “entry mode” part would be completely analyzed from the in-depth interview with CEO of IKEA China. As for the “cultural distance” in first part and the third par “timing of entry” would be summarized with both “in-depth interview” and “semi-structured interview” which was conducted from different IKEA sales managers in different retail store in China to do the analysis. After analyzed each influence factor in each part, a summarized holistic reasonable marketing entry strategy of IKEA would be presented.

Research ethics and Trustworthy

According to Preissle (2008), the issue of ethical should always be taken into the consideration of whole research. And this master thesis also paid a highly attention to ethical principles. And the following ethical principles was aimed by Saunders, Lewis and Thornhill (2012,P. 185-186). Firstly, the participants are voluntaries and no one adopt the measurement of force, and each participant has the right of realize the purpose of research. Secondly, every participant has the right of removing anytime to avoid the awkward questions and the privacy which is unwilling to be touched. Finally, the interviews are anonymous, and the most of participant retail store managers of IKEA China are unwilling to refer to their name in the research. However, considering the validity and authority of this research and the agreement of the Chief Executive Officer (CEO) of IKEA China- Ms. Zhu Changlai herself, the name of her would be mentioned in the thesis. And the ethics of this point also follow the ethical principle of respect the right of participant.
As for the research trustworthy which also could viewed from the research ethics that the participants are voluntaries and no one adopt the measurement of force, and each participant has the right of realize the purpose of research, therefore, the research couldn’t rule out the possibility of being told lies and facing the silence. And another factor which really influenced the data quality is because of the misunderstanding of “localism”, because some of the sales managers of IKEA retail stores are from the cities which speak very serious localism, but not nandarin. And the researcher really missed some information.

Summary of methodology

In order to present a clear and brief important content of methodology, the summary of methodology is designed as a form of table (Table 3.8).

TABLE OF CONTENTS
1 INTRODUCTION
1.1 Background
1.2 Problem Discussion
1.3 Research Purpose
1.4 Delimitation
2 FRAME OF REFERENCE
2.1 International market selection
2.2 International market entry modes
2.3 Timing of entry
2.4 Conceptual Framework
3 METHDOLOGY
3.1 Research philosophy
3.2 Research approach
3.3 Research strategy
3.4 Research method
3.5 Time horizon
3.6 Data collection and Data analysis
3.7 Research ethics and Trustworthy
3.8 Summary of methodology
4 EMPIRICAL FINDINGS
4.1 Market selection of IKEA in China
4.2 Entry mode of IKEA in China
4.3 Timing of entry influence factors of IKEA in China
5 ANALYSIS
5.1 Where should be selected as new target market location of IKEA in China
5.2 “Wholly owned subsidiary” as IKEA entry mode in Chinese future market
5.3 Which factors would influence IKEA timing of entry in Chinese market
6 Conclusion
6.1 Discussion
6.2 Conclusion
6.3Limitation
6.4 Managerial implication
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