The impact of German culture on the decision making process of market entry strategies – a case study of pet care companies from Germany

Strobell, H.W. (2021) The impact of German culture on the decision making process of market entry strategies – a case study of pet care companies from Germany. DBA thesis, University of Worcester.

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Abstract

This research explores the impact of German culture on the decision making process of foreign market entries, utilizing the example of German pet care companies. The aim is to establish the extent to which German culture affects the decision making process of market entry decisions within the pet care industry. Previous studies of market entry strategies and cultural factors (e.g. Agarwel et al., 1992; Brouthers and Brouthers, 2001; Shenkar, 2001; Blomstermo et al., 2006; Martinez and Lopez, 2009; Chang et al., 2012; Gollnhofer and Turkina, 2013; Kraus et al., 2015) focused on practical implementation, interacting cultural factors, or cultural distance. This research extends this to analyse the stage of the decision making process for internationalizing to foreign markets. The researcher identified a gap in the current literature about the influence of German culture on the decision making process of market entry strategies. To close this research gap and fulfil the research aim, three research questions were developed:

1. How can German pet care companies’ decision-making process (DMP) for entering foreign markets be described?
2. What is the impact of German culture on the DMP of German pet care companies?
3. What are the success factors for foreign market entries, and how does German culture affect them?

Knowledge about the impact of cultural factors is a clear advantage in international business. Concerning the German pet care industry, this research shows that German companies are well presented within Europe, but they may be failing to realize the huge international potential of other markets like the Americas and Asia. Emerging markets in South America (e.g. Brazil and Peru) could be interesting areas for expansion by German pet care companies. German pet care company internationalization remains an ongoing process, and specific research such as this is important.

The author used an interpretivist, inductive, and qualitative approach, conducting 11 semi-structured interviews with decision makers (owners or managers) of German pet care companies, in order to gather new knowledge about the influence of German culture on the decision making process.
The researcher developed a model to describe the decision making process of entering foreign markets and identified 11 sub-issues: preparation for foreign market entries, gut-feeling decisions, randomness, loyalty, market entry modes, perception of German culture, risks, discovery, motives for market entries and foreign cultures. These factors directly or indirectly influence the decision making process of foreign market entries of German pet care companies.

This research makes several contributions to knowledge, including that there is a low extent of preparation foreign market entries and a high impact of gut decision. Randomness played an increasing role following the initialization of internationalization projects, and German pet care companies value loyalty among their international partners more than purely economic reasons. Moreover, additional motives to enter a foreign market were highlighted, and contrary to the existing literature, a high extent of risk avoidance could not be detected. These detected sub-issues however could be related to the cultural definition of Hall (1990) and the impact of German culture on the decision making process of entering foreign markets as detected by this research. Finally, the researcher detected cultural success factors for internationalization and extended the previous success factor research in the areas of reliability, trustfulness and consumer orientation regarding a German business context.

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