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The history of attempted expansion into Finland by the Guggenheim Foundation is an example of an unsuccessful market entry. Although not a traditional business company, Guggenheim faced the same obstacles and challenges that prevent other companies from successfully penetrating a new market. The foundation operates art museums that attract visitors in different countries. When it attempted to expand into Finland, a strategic partnership with Helsinki authorities was supposed to facilitate the expansion.
The reason why Guggenheim failed lay in the stigmatization of the company on the basis of its American agenda. The prevalence of local social beliefs regarding the profit-oriented goals of the non-profit organization was so high that the foundation had no choice but to end its unsuccessful venture (Ritvala et al., 2021). Essentially, the company failed to consider local cultural specifics. Had it followed the gradual escalation of commitment outlined by the Uppsala model of internationalization, it might have recognized the prevalence of cultural barriers and refrained from investing time and resources into an unwelcoming region (Asgary, 2020). The lesson for other organizations is that cultural dimension of internationalization should receive the same attention as other spheres in managerial decision-making.
The expansion of the Danish logistics company Leman into China constitutes an example of a successful post-pandemic market entry. The entry transpired within the context of a larger Chinese recovery from the pandemic recession, which witnessed the increase in international business operations (CGTN America, 2021). Leman’s mode of entry was through establishing a subsidiary, which became known as Leman China (LEMAN enters China, 2021). The internationalization process was a success because the company correctly identified its ownership and location advantages presented by the Dunning’s OLI paradigm (Asgary, 2020). The mistake that might turn out to be a major problem for Leman is the failure to consider the possibility of new quarantine measures implemented in China. The subsequent lesson is that companies should also take into consideration local health environment and plan for sudden lockdowns when planning internationalization.
References
Asgary, N.H. (2020). Global business: An Economic, Social, and Environmental perspective. Information Age Publishing.
CGTN America. (2021). Entering global markets while in pandemic recovery [Video]. YouTube. Web.
LEMAN enters China with 5 new branches. (2021). Web.
Ritvala, T., Granqvist, N., & Piekkari, R. (2021). A processual view of organizational stigmatization in foreign market entry: The failure of Guggenheim Helsinki. Journal of International Business Studies, 52(2), 282-305. Web.
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