Doctoral Dissertations

Date of Award

5-1995

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Business Administration

Major Professor

Gary N. Dicer

Committee Members

William Cole, Ray Mundy, E. P. Patton

Abstract

This dissertation investigated the barriers to international market entry and the method of entry for air express firms in Latin America.

There are many studies of international market entry for manufacturing firms that export products. Very little research has examined the international entry of service firms. One previous study examined air express entry in Europe yet, several carriers provide service worldwide. Federal Express posted losses of over $1.2 billion dollars in Europe during a five year period before revising its method of air and ground delivery. Industry observers said this loss was as a result of FedEx attempting to do business in the in European market exactly as it had entered and dominated the U.S. domestic express package market.

Qualitative methods were used to analyze air express managers' perception of the importance international market entry barriers classified as legal, government, economic, competitive, physical, technological and social-cultural. Entry methods were defined as contractual, joint venture and wholly-owned subsidiary. The subjects. were seven air express firms (Airborne, Burlington, Emery, DHL, FedEx, TNT, UPS) that provided service to twenty-one nations in Latin America from 1988 to 1992. Air express industry executives, primarily the firms' Miami gateway managers, were questioned using personal and telephone interviews.

Secondary research data problems included the classification of air express industry operations. Service level descriptions such as less than 72-hour delivery, do not clearly define the various market segments or sufficiently differentiate firms from one another. Michael Porter's value chain is used to describe an alternative value chain for U.S. and international air express firms.

Results indicate that the major barriers to air express international market entry are political and legal. These barriers were seen as absolute in that the barriers could not be overcome through the individual efforts of the firm. Only bilateral treaties would allow for greater access to each country. Changes in these treaties were unlikely given the political influence of the local, usually government owned, airlines. Entry methods differed by firm depending on firm size, type of air and ground delivery method used in the U.S. and perception of the barriers to entry.

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