An examination of air express entry into the intra-European Community market : 1985-1989

This dissertation investigates the a) barriers to market entry as perceived by five non-European Community-based air express firms entering the intra-EC market between 1985 and 1989 and b) the form of entry these firms utilized. The literature review describes the development of the international and US air express industry; many expected the US experience to be repeated within the EC market. Entry barrier theories and the use of coalitions are drawn from economics, finance, strategic management and marketing. The research methodology consists of three parts; the first provides exploratory background information through interviews of government, association and consultant sources. Entry histories of the five firms were compiled from secondary sources in the second phase. Employees of these firms verified the entry histories and commented about entry problems in the third phase. The subject firms have had varying approaches to entry problems possibly due to their level of international expertise. There appears to be a continuum represented by absolute barriers to entry at one extreme moving through mobility barriers into problems of doing business at the other extreme. The firms with the most international experience have viewed many entry barriers as "doing business problems." Postal and customs regulations were two of the major entry problems identified. The study discusses the reasons behind the extensive reliance of the air express industry on trucking within the EC as a means of dealing with many entry problems. The form of entry selected in this market varied depending on the firm. United Parcel Service preferred joint ventures with local established partners, most of whom it bought out within two years of formation. Federal Express utilized local agents (many of which it then acquired) and acquisitions. TNT and DHL used a few key acquisitions while Emery preferred direct entry. The EC began Its movement toward single market integration as this study began in 1985. The study describes many of the market changes occurring in the EC and its neighboring countries through 1989. This analysis of entry problems may assist other service firms entering the EC and other foreign markets.