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Culture is obviously a core factor in order to make marketing policies. Marketing is the best opportunity to raise your business and attract customers but marketing techniques have differences according to the cultural environment. Good marketing improves the sale of business and also make goodwill. In order to make efficient marketing the organization must know all about the culture of the country or more specifically the culture of that area where you are starting business. Marketing means different ways to attain more customers so if they have good knowledge of values, norms, living style, of that area then it is easy to introduce and promote your product. Culture plays a vital role in design of marketing strategies. Culture is the most effective strategy for any company because with help of culture company made those things which are acceptable or like by the people of those country are this is their religious factor like if any company made jainamaz for Muslim countries it is acceptable and Sale more than from no Muslim country, so we can say that culture is the strategy of marketing. Because according to cultures history the surviving of living of people at any atmosphere is their culture. Cultures explores the theoretical and practical implications of thinking local but acting global. The cultural differences affects international marketing including consumer behavior, market research, product and price policies, channel decisions and marketing communications.
Culture is a problematic issue for many marketers since it is inherently nebulous and often difficult to understand. One may violate the cultural norms of another country without being informed of this, and people from different cultures may feel uncomfortable in each other's presence without knowing exactly why (for example, two speakers may unconsciously continue to attempt to adjust to reach an incompatible preferred interpersonal distance).
We considered several cultural lessons in class; the important thing here is the big picture.
Culture is so pervasive, yet complex that it is difficult to define in short simple
terms. It seems there are as many definitions of culture as there are anthropologists
and social scientists, each defining it to suit his understanding and interpretation. To
some, the term refers to finesse in self comportment. "A cultured person is one who
behaves in a becoming way according to his society's standard of behaviour, a gentleman,
a well brought up lady, one that is so wholistically educated that he is at
home with any given subject of discussion in art, music, literature, politics etc., who
has cultivated taste for what society judges admirable and worthy of the human
spirit" (Umoren, 1996).
To others, culture refers to masquerades, traditional dances, festivals, traditional
marriage etc. In this instance, fierce arguments in defence of polygamy, violence in
masquerades, violence and extraordinary spending in the burial of the dead, etc. are
94 P.P. EKERETE
heard of in the name of "our culture." According to Howard & Sheth (1969), culture
refers to the "collective mental programming which people in a society have. This
means that every individual's activities are directed by his or her own culture.
Culture is also seen as selective man-made way of responding to experience, a set of
behavioural pattern which means that culture influences or affects motives, brand
comprehension, attitudes and intention to use. Thus culture is not only a narrow
view of man's activities, but extend to include all the activities which characterise
the behaviour of particular communities of people-the way they eat, how they talk,
look and general behavioural pattern".
Hawkins et al. (1983) defined culture as that complex whole which includes
knowledge, beliefs, arts, law, morals, customs and any other capabilities and habits
acquired by man as a member of society. To Hawkins et al., term, "acquired by
man" means that culture is socially learnt. The researcher therefore looks at culture
as a total way of life of people living together. Every individual is subject to his or
her culture, that is, the way people live, eat, dance, believe, dress, sing, etc. The general
patterns of behaviour by people accepted by them are influenced by their culture.
Every form of culture is identified in term of language (Umoren, 1996). Language
is a vehicle of culture. In short every language serves as a vehicle of the culture of
the people who speak that language. In Nigeria there are 374 ethnic languages and
groups. Some languages are found in more than one state. For example Yoruba is in
six states, Igbos in four states, and Annang, Efik and Ibibio in two states. Hausa cuts
across all the states in the North.
These languages effects consumer behaviour. To make consumer accept a product,
language is used to promote the product. Advertising, personal selling, sales
promotion and publicity cannot be effectively used without language. The MNC
needs to understand this in going into any nations for any type of business.
Adopting the symbolic theoretical approach, Umoren (1996) treated religion as a
cultural system and defined culture as systems of symbols and meaning. There are
three main religions in Africa: Traditional religion, Christianity and Islam. The
development of man cannot be completed without one type of religion or another. In
Nigeria, Christianity dominates the South, while Islam dominates the North and the
traditional exists in both areas.
Religions affect consumption behaviours and the purchase pattern of the individual.
For instance, Islam in the North does not allow beer parlours and imbibement of
alcohol, whereas in the South beer are sold everywhere. Because of religion some
married women cannot move publicly as they like. All these affect the MNC marketing
performance. They must adapt their product and promotion to suit their area of
According to Busch & Houston (1985), values are enduring beliefs that guide
behaviour in specific situations. A value exists mainly at the individual level, but
when it is substantially shared throughout a society, it becomes a cultural value.
Knowledge of the socio-cultural sector in terms of cultural values is crucial to marketing,
because cultural values influence the behaviours of most individuals in consumption
situations. As cultural values shift, so will motives for buying products,
and so the firm that fails to recognise this will overlook opportunities for new prod-
The Effect of Culture on Marketing Strategies of Multinational Firms 95
ucts or changes necessary in existing ones.
Cultural values are widely held beliefs that affirm what is desirable and have an
impact on activities (Hawkins et al., 1983). These values affect norms, which specify
an acceptable range of responses to specific situations. The beliefs, cultural values
and norm in different countries show great variation. For instance, most
Americans still believe in work, in getting married at appropriate age, in giving
charity and in being honest. Some Nigeria people in the North can marry from the
age of twelve. When products are introduced into one country from another, acceptance
is far more likely if there are similarities between the two cultures.
Connotations associated with body motions, greetings, colors, numbers, shapes,
sizes and symbols vary considerably across cultures (Pride & Ferrell, 1985), and
these cultural differences have marketing implications that pertain to product development,
personal sales, advertising, packaging and pricing.
The home country of the multinational enterprises is usually the base of expansion
and initial development of the firm. It houses the parent office, otherwise called
the headquarters. The host country is where multinationals have their subsidiaries.
According to Berham (1969), the characteristics of multinational firms are that
they attempt to treat the various markets as one, to the extent to which the host
countries government permit. They also respond to the market opportunities around
the world and try to pull together various elements of the enterprises to take maximum
advantage of its managerial know-how, advanced techniques and coordinated
marketing. Finance functions, product differentiation, extensive advertising,
advanced technology and managerial know-how are part to their known characteristics.
Once a firm decides to be involved in international arrangements, management
must decide which operational structure will be employed to implement this international
venture. The structure depends upon whether the foreign arm is intended to
remain as a secondary appendage to the parent body or whether management is
interested eventually in developing a fully integrated world marketing enterprise.
Nwokoye (1981) identified that the choice of a given structure is a function of
both internal and external variables. The internal variables include: financial capacity,
established corporate policies, size and experience in foreign operations. The
external variables may include: economic and marketing information, legal restrictions,
non-tariff barriers and political, social and cultural factors. However, six basic
kinds of structure or involvement include: exporting, licensing, contract manufacturing,
management contracting, joint venture and wholly owned subsidiaries.
McCarthy & Perreault (1984) viewed marketing strategy a "big picture" of what a
firm will do in some market, made up of two inter-related parts-the target market
and the marketing mix. The target market is a fairly homogenous (similar) group of
customers to whom a company must appeal to while the marketing mix is the controllable
variables, which the company puts together to satisfy this target group.
Pride & Ferrell (1985) saw a marketing strategy as that which "encompasses
selecting and analysing a target market (the group whom the organisation wants to
reach) and creating and maintaining an appropriate marketing mix (product, distribution,
promotion and price) that will satisfy those people". In this instance, a marketing
strategy forms the core of a successful marketing plan. It articulates a plan for
96 P.P. EKERETE
the best use of the organisation resources and advantages to meet its objectives.
When choosing a target market, marketing managers try to evaluate possible markets
to see how entering them would affect the firm's sales, costs and profits. They
also attempt to determine, if the organisation has the resources to produce a marketing
mix that meets the needs of the particular target market and whether satisfying
those needs is consistent with the firms overall objectives. They also analyse the size
and number of competitors who already are selling in the possible target market.
The target market therefore, is a group of persons for whom a firm creates and maintains
a marketing mix that specifically fits the needs and preferences of that group.
For example, within the Muslim tradition, the dog is considered a "dirty animal, so portraying it as "man's best friend in an advertisement is counter-productive. Packaging, seen as a reflection of the quality of the "real product, is considerably more important in Asia than in the U.S., where there is a tendency to focus on the contents which "really count." Many cultures observe significantly greater levels of formality than that typical in the U.S., and Japanese negotiator tend to observe long silent pauses as a speaker's point is considered.
In japans culture there is a CEO office is between all the offices and small but in US culture CEO office big and are in side.
Now I would like to raise few points so that it will be explained more easily
The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products);
The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media);
The behavior of consumers while shopping or making other marketing decisions;
Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome;
How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and
How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.
Marketing Activities Affected By Culture
3 Social and cultural factors
Social and cultural factors influence all aspects of consumer and buyer behavior. The difference between these factors in different parts of the world can be a central consideration in developing and implementing international marketing strategies. Social and cultural forces are often linked together whilst meaningful distinctions between social and cultural factors can be made in many ways by the way the two interact and the distinction between the various factors is not clear cut. Differences in languages can alter the intended meaning of a promotional campaign and differences in the way a culture organizes itself socially may affect the way a product is positioned in the market and the benefits a consumer may seek from that product.
A sewing machine in one culture may be seen as a useful hobby but in another culture a sewing machine may be necessary to the survival of a family.
Kotler (2003 included such things as reference groups, family roles and status within social factors. Whilst this is a useful distinction from the broader forces of culture, social class and social factors are clearly influenced by cultural factors.
If a family which is an important medium of transmitting cultural values. Children learn about their society and culture through many means but the family influence is strong particularly
during the early years of a child's life. Furthermore the way in which family life is arranged varies considerably from one culture to another. In some cultures the family is a large extended group encompassing several generations and including aunts and uncles whilst in other cultures the family is limited more precisely to the immediate family of procreation and even then the unit might not be permanent the father and mother of the children might not remain together for the entirety of the child rearing process.
The firms indicated that cultural various exerted varied influence on marketing
strategies used by the multinational firms, which called for the use of specific strategies
for particular situations and influences.
The firms also indicated that marketing strategies were adopted to purposely overcome
competition for more market shares and improved sales, and to stand the test
of the ever-changing trends as it affected demand and supply. Some of the strategies
included the use of quality products, frequent advertisement in local media, ideal
pricing structure, reward sales promotion and new product innovations.
Finally, all firms had adopted some useful remedies to overcome cultural influences
affecting their operations. These include: product adaptation, promotional
adaptation and new product innovation with the above in use.
The following recommendations are advanced to assist the multinational firms
and meet the dynamic nature of demands.
1. They should hold fast to the marketing concept, which focuses on the identification
of the needs and wants of target customers, and finding means to satisfy
it. By so doing, both current and latent needs will be satisfied.
2. They should concentrate on the production of particular product items that
would be specific to various cultural settings.
3. Their promotion programmes should be culture bound to the targeted indigenous
people and their interest.
Berham, J. 1969. Some Patterns in the Rise of Multinational Enterprises. John Wiley &
Sons, New York.
Hawkins D.I., R.J. Best & K.A. Coney 1983. Consumer Behavior: Implications for
Marketing Strategy. Business Publications, Plano, Texas.
Howard, J.A. & J.N. Sheth 1969. The Theory of Buyer Behavior. John Wiley & Sons, New
Kolde, E.J. 1968. International Business Enterprise Englewood Cliffs, Prentice-Hall New
McCarthy, E.J. & W. E. Perreault, Jr. 1984. Basic Marketing: A Managerial Approach. 8th
Edition. R.D. Irwin, Homewood, Illinois.
Nwokoye, N.C. 1981. Modern Marketing in Nigeria. Macmillan Press, London.
Busch, P.S. & M.J. Houston 1985. Marketing: Strategic Foundations. R.D. Irwin,
Pride, W.M. & O.C. Ferrell 1985. Marketing: Basic Concepts and Decisions. Houghton
Stopford, J.M. & L.T. Wells, Jr. 1972. Managing the Multinational Enterprises. Basic
Books, New York.
Umoren, U.E. 1996. Anthropology Contextualised in Nigerian Peoples and Culture. An
Unpublished Monograph, RSUST, Port Harcourt.
Q # 2 Experience must count in every field of life. Marketing needs a lot of experience because its very difficult to convince anyone and make customers. As we explained above that culture affects a lot in marketing like this there are also other factors which affects marketing. Experienced person can make good decisions at the right time and improve the ways to sell the products. There are different types of market and the marketers have to know about the market. Experienced person can easily focus its customers and can satisfy them whereas inexperienced marketers cannot take the right step on the right time. Culture varies place to place, like the culture of Europe is different from the culture of asia this is the prominent difference but if we talk about those areas where culture don't have many difference but still there will be some aspects which make slight difference in culture of the area. Culture differs due to people, their living style, their taste their requirements. Now the experienced marketers can know the slight difference in the culture but inexperienced marketers cannot know and the flop in this illusion because of similarity in the culture. Forexample if the organization is going to introduce the product in Islamabad they do their best to sell the product and they got success but when they move to Lahore although there is not much difference in the culture of Islamabad and Lahore but there must be slight difference which the inexperienced marketers cannot judge this similarity of illusion. Most of the time there is no difference in the aspect of culture but inexperienced marketers face difficulties in knowing about the different aspects of culture.
Assignment # 02
The evolving world of international business is witnessing the emergence of additional players, including firms from the former Eastern block. These firms are playing a game of catch-up as they attempt to learn the intricacies of doing business in today's global economy. The speed at which this process is occurring varies across nations. Firms in Slovenia, the Czech Republic and Hungary, for example, are rapidly acquiring the skills necessary to compete on the world stage. These firms have adopted both general approaches to marketing as well as targeted actions, which have been influenced by the local environment. This article will discuss the possibility of standardizing marketing programs and the factors influencing the process of cost lessening, as they apply to the case of Slovenian firms.
The literature in this area broadly examines the numerous variables that affect standardization. Both internal and external components impinge upon the decision to standardize the marketing program of product, price, distribution and promotion (Kreutzer, 1988). The magnitude of differences in local physical, economic, social, political and cultural environments, are being invalidated by the globalization of markets. As a result, there may be no differences between domestic and international marketing (Perry, 1990). However, a standardized marketing cannot be set once and for all. Matching firms' resources with environmental requirements, anticipating changes in consumers' needs, and forecasting competitors' behavior (Easton, 1988; Kogut, 1988) are critical business activities for developing effective standardized export marketing initiatives (Akhter and Laczniak, 1989).
The challenges facing MNEs in emerging market
According to Ghauri and Holstius, a company is entering international markets there are dissimilarities in the economic, political, legal and cultural environments that pose incentives for, as well as obstacles to,successful expansion. These differences are especially large in transition economies. This section will focus on the some major challenges that facing by multinational companies in emerging market.
Political and economic environment
The stability of political and economic environment is the key elements to influence the investors'decisions. At the recent decade, the political situation in emerging markets has favoured foreign investment. Mexico's open door policy of the early 1990s attracted significant inflows of foreign investment. However, in several transition economies, an ongoing problem faced by entrants into emerging market is their political and economic unpredictable. In China, as an example, has been in the process of developing a 'socialist market economy with Chinese characteristics '. The government maintain control and monopoly over the major sectors including railways, post and telecommunications and allowing private in manufacturing and service sector. In practice, this means that the current constitution (of a one party dictatorship and mainly state ownership) and the legal regime (with its lack of transparency) will resist political reform even though economic reform has deepened since 1992. (Roger strange, Hui Tan) These disaccord of political and economic reform have been created many uncertainty for foreign investment, such as changeable economic policy, market protection as a method of local government to support the development of local economies and the most important is the role of inter document playing in economic governance. The unpredictability of the political and unstable economic climate for foreign investors in emerging market poses a significant challenge.
Legal and institution issue
The legal and institutional environment reflects the overall attitude of a host country towards foreign investment. For a long time the legal and institutional environment are poorly developed in emerging market. In particular, in term of competition policy, regulatory policy, corporate taxation, and definition and enforcement of property rights.( Klaus E. Meyer, Saul Estrin) Moreover, even where the necessary law are in place, their implementation and enforcement is weak due to unqualified accountants, bureaucrats and lawyers. The legal framework is often subject to frequent changes, which creates considerable uncertainty for businesses.
The labor standards in MNE affiliates and subcontractors in emerging economies
are a major concern in globalization debates. Some observers fear that the strong
bargaining power of multinational firms vis-à-vis their employees, and vis-à-vis potential
host countries leads to a lowering of standards and wages (Cerny, 1994; Palley, 2002).
Does the downward spiral of rivalry lower labor standards in MNE operations in
developing countries, triggering a "race to the bottom" (Spar and Yoffie, 1999)?
The theoretical arguments concerning impact on social variables resemble those on
environmental impact. On the one hand, concern with global standardization and the firm's
reputation induces many MNE affiliates to pay higher wages and to employ high labor
standards with respect to working hours, sick leave, child labor, unionization etc. (Caves,
1996: 228; Moran, 2002). Since MNE's generally wish to retain their qualified staff, they
have incentives to keep them satisfied, unless they are employing unskilled labor with few
outside job opportunities. On the other hand, lower labor standards and lower wages
present opportunities to reduce production costs. This incentive is generally larger than for
environmental issues, as labor costs often account for a larger share of production costs.
Host countries eager to attract investment are said to compromise their standards under
pressure from MNEs, thus undermining democratic principles (Cerny, 1994; Scherer and
The unease about the "race to the bottom" is of concern in certain industries, such
as textiles, footwear and assembly of electronics. Spar and Yoffie (1999:565) argue that
necessary conditions for a race to the bottom are first mobility of firms and goods across
borders, i.e. free trade, and, second, that "regulation and factor costs are heterogeneous -
and the heterogeneity leaves gaps that can be turned into the firm's competitive
advantage". Moreover lowering of standards is facilitated by
â€¢ Homogeneity of products (or components at certain stages of the value chain), such
that price is a key competitive parameter.
â€¢ Regulatory differentials are important for the cost structure of the industry, such as
labor law for textiles and footwear.
â€¢ MNEs would not incur major transaction costs or sunk costs when relocating a
production plant, i.e. location is not sticky.
Such a race to the bottom would not necessarily be in the business interest.
Generally speaking, most emerging markets lag behind the advanced nation in terms of communication, distribution, and management perceptions. Any one of those factors may threaten the success of international firms. Respecting the communication, in many transition economies are not well functioning as they are in the western part of the world. As one British businessman who had personally been successful in doing business in China commented, 'You can hardly find any yellow pages in China.' The personal contact seems as an effective strategy in Chinese market. As Guo and Akroyd argue that the Chinese communication system is technically oriented rather than commercially oriented. In addition, As far as the distribution sector concerned, it is practically poor, even non-existent in smaller town and countryside. Foreign firms have to set up their own distribution system, supply centres and warehouse. This might force the companies to settle in large cities. For this reason, the market for many western goods is also much closer to saturation there than in the countryside, or in the smaller towns. Furthermore, numbers of infrastructural barriers are also identified including: the difficulties of sourcing raw materials, lack of personnel training, as well as problems with the operation and maintenance of transferred technology. In short the poorly developed infrastructure will enlarge investor's transaction cost.
Institutions failing to ensure efficient functioning of markets are widespread in emerging
economies. Formal institutions such as the legal code may be less sophisticated, and, just
as important, law enforcement may be inefficient. Local firms may thus rely on network
based coordination mechanisms to overcome various forms of market failure (Peng 2000).
Yet how does this institutional heterogeneity interact with FDI? On the one hand, foreign
investors may influence the institutional development, but at the same time they adjust to
local institutions. Moreover, institutions moderate interactions with local firms and
The literature has analyzed the issues largely separate: strategy scholars analyze
how FDI strategies are adjusted to local contexts, and institutions in particular (Peng,
2000; Henisz, 2000; Meyer, 2001), while development scholars analyze how FDI
influences the local context. However, FDI strategies and the local environment in
emerging economies are mutually interdependent. Informal institutions may be influenced
by the living example of businesses based on different values and norms, and even formal
institutions may be influenced by governments changing legislation in view of attracting
FDI, possibly even under direct negotiations or lobbying by MNEs. On the other hand, the
local environment, in particular the institutional framework, influences MNEs' entry and
Moreover, institutions moderate many of the afore discussed relationships between
foreign and local firms, for instance:
â€¢ Labor market institutions moderate the mobility of people between local and FDI
firms, and thus the diffusion of knowledge, but also local firms' loss of employees to
foreign competitors. Labor laws and their enforcement regulate minimum wages and
â€¢ Capital market institutions moderate the ease of local sourcing of capital, but also the
possible crowding out of local investment.
â€¢ Environmental regulation and enforcement influence the potential negative effects on
the local environment.
â€¢ Competition and industry regulation influence foreign investors ability to extract
monopoly rents or otherwise benefit from market power.
â€¢ Education systems enhance the availability of skilled labor and the absorptive capacity.
â€¢ Special economic zones may attract more FDI, but at the same time limit the
interaction with indigenous industry and thus spillovers.
Corporate strategies, institutional change and the development of local resources
and capabilities are thus mutually interdependent. This suggests two directions for future
research. Firstly, institutions are important moderating variables to be included in many
studies of FDI impact. Secondly, scholars should build on recent research on the coevolution
of corporate strategies and institutions (Lewin and Kim, 2003) and apply this
line of thought to emerging economies (Meyer and Nguyen, 2003). This should lead to
clearer empirical evidence on long run processes of institutional and corporate change.
The wide gap between rich and poor in emerging markets is a principal cause of social tension. Other social issues include ethnic tensions, such as those that have exploded disastrously in Central Europe. Also in accordance with Helms, in former socialist countries, the socialist legacy is other obstacles leading to the foreign invest flow in. As he argued that owning to the state controlled industries in the past, the alcoholism and absenteeism has been high, which have affected the work habits of today. Further he claimed that handling workers with this attitude can be very difficult.
It is not only the culture and language problems, also the awareness of society setting the barriers for investor.
For small ambitious firms in emerging economies, access to such production
networks is of increasing importance, yet the long term-nature of supplier relationships and
the global reach of incumbents raise entry barriers. Incumbents benefit from their longstanding
relationship, their reputation and their customer-specific know-how. Also, large
firms are better able to guarantee quality and just-in-time delivery. Thus attaining access to
an international value chain is a major challenge for small firms in emerging economies.
This key role of clusters for economic development, and the potentially central role
of MNEs in clusters, raises many research questions. First, how convincing is the
empirical evidence for spillovers to occur at sub-national level? On aggregate level, it is
not very strong. Aitken and Harrison (1999) and Smarzynska (2002) test for the spillovers
pertaining to a "local" region smaller than the host economy, but they find no evidence to
support this claim in respectively Venezuela and Lithuania. However, Zhang (2001) finds
positive evidence of spillovers at regional level within China, as does Sjöholm (1999b) in
Indonesia. More favorable evidence comes from case research, showing how FDI can
facilitate cluster development. For instance, Patibandla and Petersen (2002) argue that the
early investment by Texas Instruments in Bangalore was instrumental in developing the
Indian software cluster. Similar case evidence shows contributions of FDI during the
inception phase of industrial clusters, such as the textile industry in Bangla Desh and
Mauritius (Rhee and Belot, 1990), and the electronics industry in Penang, Malaysia
(Altenburg, 2000). Yet are these typical? Under which conditions do they emerge? To
assess the questions beyond the case study approach, future research needs better ways to
delineate clusters to capture intra-cluster spillover effects.
Secondly, how do MNEs contribute to cluster evolution? The contribution of the
foreign investor may lie in both transfer of knowledge to local partners, possibly in
exchange for other knowledge, and in their role as intermediaries in the international crossfertilization
of knowledge clusters. By establishing operations within a cluster, MNEs can
both contribute to and benefit from the knowledge exchange within the cluster.
Longitudinal case studies have followed global industry evolution over several
years or even decades to observe both winners and losers, tracing the emergence of new
clusters in a dynamic context and recording not only entries, but also exits (McKendrick,
Doner and Haggard, 2001; Murtha, Lenway and Hart, 2001). Research on industrial
clusters needs more such longitudinal studies. This qualitative research may then stimulate
theoretical development applying for instance theories of organizational learning,
knowledge creation and evolutionary economics, as well as focused empirical tests.
All in all, it is widely believed that Foreign Direct Investment made a major contribution to the economic development of emerging markets. Meanwhile; emerging markets play a vital role in the global strategies of many multinational enterprises (MNEs), notably those with ambitious growth targets. However, due to the political and economic uncertain, poorly developed the legal and institution framework and the lack of market information and communication system and so on. Such factors posed significant challenges and threaten for investors in accessing the emerging market. Therefore, in order to reduce the risk and transaction cost, the several entering model have been provided. Each model has their own characteristics, choosing the proper one can certainly eliminate the risks and reduce the transaction cost. Of these, joint venture is preferred entry model despite the apparent disadvantages of shared control JV offers the opportunity to establish a business operation in a foreign country when establishment of a Greenfield site is not feasible or too expensive. (Buckley and Casson 1976, 1998, Hennart 1988, 2001). Moreover it provides the foreign company with a local partner, which helps the investors easily access to local market. That especially benefit for pioneering without much local knowledge. However, by sharing control with local partner can lead to coordination conflicts, especially if their objectives are not compatible or cultural barriers inhibit communication. A Greenfield site gives the opportunity to create an entirely new operation but it is most risky entry model since the regulatory framework in transition countries is complex. An acquisition facilitates quick entry and immediate access to local resources. Acquisitions internalize certain markets, and bring together complementary resources, but these resources need to be integrated effectively (e.g. Haspeslagh and Jemison 1991). It is suitable entry strategy if acquired companies function in a westernized manner, and have local knowledge and contacts. A Brownfield, as a hybrid mode of entry, can substitute for either acquisition or Greenfield if they are not feasible or too costly. (Klaus Meyer, 2003) Brownfield projects can utilize more sources of resources enabling projects that neither the foreign investor nor the local firm could implement themselves. Through the Brownfield foreign investors can overcome obstacles arising from the limited availability of certain assets or from high transaction costs in specific markets by considering a wider choice of potential target firms. However, Brownfield typically incur high integration costs because the investor engages in deep restructuring and in major resource transfer.