International Journal of Innovation in Management , Economics and Development Vol 1 , No 3 , P : 247 - 267 Received : 14 mar 2019 Accepted : 17May 2019

Investigating and Prioritizing Strategies Affecting Foreign Market Entry of a Company Using Strategic Reference Point Method

Amir Farahanchi Keywords :Foreign market entry strategy, Degree of ownership and control, MA Executive management-marketing and perspectives of management, strategic export Islamic Azad University, Science reference point, aviation industry business. and Research

ATA Airlines, IT Department , East Funding : The authors wish to state that no Azarbaijan, . funding was obtained for this study. [email protected] Pourya Farahanchi Introduction MA Business Management-Financial management Islamic Azad University, 1. In recent years, it has been observed Tabriz, Iran. that foreign airlines, especially those from [email protected] neighboring countries, by discovering gaps in the domestic airline industry in the field of passenger and cargo transportation as Abstract well as providing technical, engineering, This study has investigated, identified, and and repair services to the fleet of Iranian prioritized the factors affecting the foreign airlines and providing, repairing parts or market entry of companies along with training of technical personnel of international business strategies of the air companies, have been entered this market transportation industry. The research in our country and have gained great method has been a descriptive survey profits. What is certain is that while not among a group of randomly chosen experts requiring themselves and the local market in the aviation industry of ATA Airlines from foreign companies entry to the Company. Data were collected to domestic market to provide various investigate variables and to validate the services of the aviation industry, domestic research hypotheses. Analyzing data companies, which seek to enter foreign through t-test and Friedman ranking method, revealed that two independent markets to provide services that can be variables, titled “perspectives of delivered and demanded by international management” and “degree of ownership customers in the next steps, must reinforce and control” have a significant credit rating, themselves in various technical and service and have been evaluated almost to a share areas. In the present study, we have in choosing effective entry strategy. The investigated, identified, and prioritized research model was the integrated matrix of factors affecting international market entry strategic reference points, in which the and international business methods and mentioned variables, create four different strategies while stating strategies related to modes of strategies to offer to companies. these activities. International business is

247 defined as the types of transactions that strategy, while increasing the precision in take place abroad or outside the choosing the appropriate methods for geographical boundaries of a society. This starting a foreign business. This study was type of business is particularly important conducted to investigate and prioritize because it can directly or indirectly affect effective strategies for the the relationships of two or more internationalization of a company and its communities. The difference between foreign market entry, especially concerning domestic and foreign markets can be seen the country's aviation industry. Regarding both in nature and the way of marketing. the innovative aspect of this research, it can Among the differences between domestic be pointed out that there is no domestic and foreign markets are different marketing sample focusing on companies providing techniques, environmental differences, services in the field of aviation and air governmental restrictions and regulations, transportation and no research is conducted the level of income of communities, and in the field of air transportation industry’s cultural differences (FakhimiAzar, 2015). foreign market entry so far. Therefore, According to these differences, it is while thoroughly investigating the topic of necessary to adopt and implement the research in the field of international appropriate strategy(s) for foreign market companies, a case study about a company entry of a company. For a successful active in the field of the airline industry foreign market entrance, a company must (passenger and cargo air transportation) is analyze all affecting aspects while most conducted. theories and researches consider it only from a perspective and this causes to be 2. BACKGROUND AND unaware of other aspects and despite its THEORETICAL FOUNDATION high potential, not to succeed in the foreign market and fail and suffer enormous costs. 2.1. Indicator Theories Regarding The Therefore, a model should be designed to Internationalization Of Business analyze the target market and Companies internationalization strategies by 2.2. Sharma and Aramili (2004) define the considering more than one dimension. In entry method as a structural agreement that this study, while exploring the factors allows the organization to implement its influencing the selection of foreign market product/market strategy in a host country entry strategies by the managers of a through the implementation of marketing company and outlining the foreign market activities (e.g. through export methods) or entry methods, we answered the question of the production and marketing activities in “what strategies with which priorities affect that country either alone or in collaboration selecting foreign market entry method(s) of with others (contractual methods, joint a company? In this study, a unified model ventures, full ownership operations). The is introduced to avoid the huge costs caused selection of the entry method consists of the by failing in the internationalization choice of location and type of control. process, as much as possible, by Resources can be located domestically or in considering more than one aspect of the a foreign market and controlled by the multiple aspects influencing the decision- company itself or through a contractual making of managers of business companies arrangement. There are various definitions on choosing a foreign market entry of internationalization. Internationalization

248 is the process of adapting the company's and others. The common point of all these activities (strategy, structure, resources) to theories can be considered in the network the foreign environment. According to structure, the less hierarchy, the matrix another definition, internationalization is a management, and the higher independence gradual process whereby a company of the foreign branches. A review of the expands its international business relations. literature on international trade theories and The sooner the process of resource models of global market entry shows that accumulation and development occurs, the the existing theories and models are process of internationalization accelerates. divided into four categories from the point In recent years, the time span for of view of analysis. Some of these theories internationalization has become much (often traditional international trade shorter than before. According to Leach theories) consider the issue of international and Knight (2006), readiness to foreign competitiveness at the country's analysis market entry is interpreted as being aware level. Porter and other industrial of the foreign target markets and being able economists have studied international to enter these markets. Internationalization competitiveness at the level of industry and choosing the right path are among the analysis; while some other theorists most important decisions for the growth of consider the issue of international the company; accordingly, the process of competitiveness at the level of company internationalization of the company can be analysis. The resource-based approach and divided into four general stages: all theories branching of it in economics preparation stage, setting up the stage, and management emphasize that growth stage, and maturity stage. Theory of companies must possess unique and scarce Chandler's Strategy Structure (1962), valuable asset(s) or capability(s) to Stopford and Wells’ Stage compete in the international market which Internationalization Model (1972), is irreplaceable and inimitable to gain Franco's Internationalization Model competitive advantage. This theory, one of (1976), Howard V. Perlmutter's Theory the theories of strategic management, was (1969), Porter's International Competition presented by Fiegenbaum et al. Strategic Pattern Theory (1988), and Uppsala Model reference point theory states that by and theories branching by them can be identifying the strategic reference points of considered the pioneering theories in the organization that have a major impact explaining the process of on the activities and performance of the internationalization that from the organization, organizational strategic perspective of managerial (not economic) decisions can be made (Bamberger and theories and based on the study of the Fiegenbaum, 1996). But what is the behavior of companies after the process of appropriate reference point formed at the internationalization at different levels of organization level? Different theoretical company and industry analysis have approaches provide different selection investigated the issue. The founders of the mechanisms for comparison. Theories of theory of international organizations can be organizational/industrial economics and Alfred Chandler, Joseph Bauer (1970), the dependence of modern resources and Cyert and March (1963). They have institutions suggest foreign stakeholders significantly influenced modern theories of such as competitors, suppliers, customers, Perlmutter, Stopford, and Wells, Franco, and other non-economic stakeholders as

249 key reference points. Finally, studies and first thing that an expanding company literature on corporate identity suggest should consider is whether to export its strategic intentions and organizational products or to create manufacturing change and the importance of time and facilities in foreign markets (Dehghan, especially past and future orientations as 2007). In a large number of emerging key reference points (Dehghan, 2007). markets, governments' policy is to produce Internal, external, and temporal-based locally. A company that wants to enter such reference points should not be considered markets must provide its facilities locally. as purely proprietary choices. But, they are Assuming the company can choose, the considered as elements of a decision variables to produce locally, multidimensional set. Fiegenbaum et al. regionally, or globally are cost, quality, proposed the use of a three-dimensional shipping, and value to the customer. Costs reference point matrix that includes a wide include payment cases for exploitation, range of variables as a tool to determine materials, capital, land, and transportation. how organizational decision-makers Savings caused by the mass scale of consider multiple reference points production are an important factor in simultaneously. Therefore, specific determining the cost. For the production of patterns are formed based on the any product, it is at least a certain amount interactions of these internal and external to justify the cost of investing in and temporal factors (Bamberger and manufacturing facilities (Khoye, 2015). If Fiegenbaum, 1996; Dehghan, 2007). The the company decides to create production types of strategies of foreign market entry facilities at the regional level, it can choose can be categorized according to two one among buying, manufacturing, renting, characteristics: the location of production or contracting with a local manufacturer. facilities and the amount of control that the Contracting with a local producer requires company tends in foreign investment. From less capital because in this case, the an international marketing perspective, existing production facilities can be used. different ways of entering the market In such a situation, the local producer of the represent levels of control, commitment, contract is in a position to offer a participation, and risk. It is difficult to reasonable price. The decision about decide about the choice of strategies of production at home or abroad is based on foreign market entry because of the effect management orientation. Howard of a variety of variables. But using the Perlmutter, professor at the University of strategic reference point theory, key and Pennsylvania, noted for the first time, the strategic variables influencing the choice of specific orientations of international strategies of foreign market entry can be corporate management. He identified four identified. Therefore, two dimensions of types of trends or orientations related to the “focus or management orientation” and evolution of operations of international “degree of control” are introduced as companies: focus on home country, focus strategic reference points of foreign market on multiple countries, focus on one or more entry, based on them, the most appropriate regions of the world and global orientation, strategies for foreign market entry can be these orientations are the framework of the selected. The first strategic reference point stages of company development in the process of foreign market entry is the internationally, when management focuses focus or management orientation. So the on home country, it usually selects

250 production strategies in the country or strategy. Ownership advantage is caused by exports. And when management focuses on the specific assets and skills of a company, other countries or the world, it uses foreign such as the size of the company, or non-export production strategies. Also, international experience, and the ability to these management orientations indicate the develop distinct products. Companies that extent of management participation or have sub-branches under their ownership or involvement in foreign marketing use direct investment have complete activities. The extent of management control over all operational aspects such as involvement in international activities strategy and structure, human resources, depends on the attractiveness of the place, financial policies, marketing strategies and the company's ability, and the risk policies, and so on. In a joint venture, this considered (Dehghan, 2007). The more we is not like this. In these companies, each move from production strategies in the partner has as much control as its share. In country (export strategies) to production assigning production and distribution strategies abroad (non-export strategies), concession, little investment is required but the degree of participation or involvement equal to the contract, the recipients of the in foreign marketing activities will raise. concessions of production and distribution Therefore, the indirect export strategy has may have considerable power in the the lowest participation and the direct business (Cateora and Graham, 2005). investment strategy has the highest Companies in direct export strategies also participation (Albaum, 2002). The second have more control over international strategic reference point of deciding for operations than indirect export strategies foreign market entry is the degree of (Dehghan, 2007). control over international activities. The level of control over international 2.3. Strategic Reference Point Theory operations is one of the influential strategic variables on choosing strategies of foreign This theory, one of the theories of strategic market entry. Strategies of foreign market management, was presented by entry vary in terms of control, ranging from Fiegenbaum et al. Strategic reference point indirect exports to strategic partnerships, theory states that by identifying the the creation of sub-branch under the strategic reference points of the ownership of a company, and foreign direct organization that have a major impact on investment (Cateora and Graham, 2005). the activities and performance of the The decision about the extent of control organization, organizational strategic over a company's international operations decisions can be made (Bamberger and is influenced by factors such as marketing Fiegenbaum, 1996). But what is the capability, technical knowledge, product appropriate reference point formed at the compliance, international corporate organization level? Different theoretical strategy, international corporate approaches provide different selection experience, and ownership. Although mechanisms for comparison. Theories of ownership can be possessed without organizational/industrial economics and control and control without ownership, but the dependence of modern resources and greater ownership is usually associated institutions suggest foreign stakeholders with greater control. Having the advantage such as competitors, suppliers, customers, of ownership affects the choice of entry and other non-economic stakeholders as key reference points. Finally, studies and

251 literature on corporate identity suggest should consider is whether to export its strategic intentions and organizational products or to create manufacturing change and the importance of time and facilities in foreign markets (Dehghan, especially past and future orientations as 2007). In a large number of emerging key reference points (Dehghan, 2007). markets, governments' policy is to produce Internal, external, and temporal-based locally. A company that wants to enter such reference points should not be considered markets must provide its facilities locally. as purely proprietary choices. But, they are Assuming the company can choose, the considered as elements of a decision variables to produce locally, multidimensional set. Fiegenbaum et al. regionally, or globally are cost, quality, proposed the use of a three-dimensional shipping, and value to the customer. Costs reference point matrix that includes a wide include payment cases for exploitation, range of variables as a tool to determine materials, capital, land, and transportation. how organizational decision-makers Savings caused by the mass scale of consider multiple reference points production are an important factor in simultaneously. Therefore, specific determining the cost. For the production of patterns are formed based on the any product, it is at least a certain amount interactions of these internal and external to justify the cost of investing in and temporal factors (Bamberger and manufacturing facilities (Khoye, 2015). If Fiegenbaum, 1996; Dehghan, 2007). The the company decides to create production types of strategies of foreign market entry facilities at the regional level, it can choose can be categorized according to two one among buying, manufacturing, renting, characteristics: the location of production or contracting with a local manufacturer. facilities and the amount of control that the Contracting with a local producer requires company tends in foreign investment. From less capital because in this case, the an international marketing perspective, existing production facilities can be used. different ways of entering the market In such a situation, the local producer of the represent levels of control, commitment, contract is in a position to offer a participation, and risk. It is difficult to reasonable price. The decision about decide about the choice of strategies of production at home or abroad is based on foreign market entry because of the effect management orientation. Howard of a variety of variables. But using the Perlmutter, professor at the University of strategic reference point theory, key and Pennsylvania, noted for the first time, the strategic variables influencing the choice of specific orientations of international strategies of foreign market entry can be corporate management. He identified four identified. Therefore, two dimensions of types of trends or orientations related to the “focus or management orientation” and evolution of operations of international “degree of control” are introduced as companies: focus on home country, focus strategic reference points of foreign market on multiple countries, focus on one or more entry, based on them, the most appropriate regions of the world and global orientation, strategies for foreign market entry can be these orientations are the framework of the selected. The first strategic reference point stages of company development in the process of foreign market entry is the internationally, when management focuses focus or management orientation. So the on home country, it usually selects first thing that an expanding company production strategies in the country or

252 exports. And when management focuses on the specific assets and skills of a company, other countries or the world, it uses foreign such as the size of the company, or non-export production strategies. Also, international experience, and the ability to these management orientations indicate the develop distinct products. Companies that extent of management participation or have sub-branches under their ownership or involvement in foreign marketing use direct investment have complete activities. The extent of management control over all operational aspects such as involvement in international activities strategy and structure, human resources, depends on the attractiveness of the place, financial policies, marketing strategies and the company's ability, and the risk policies, and so on. In a joint venture, this considered (Dehghan, 2007). The more we is not like this. In these companies, each move from production strategies in the partner has as much control as its share. In country (export strategies) to production assigning production and distribution strategies abroad (non-export strategies), concession, little investment is required but the degree of participation or involvement equal to the contract, the recipients of the in foreign marketing activities will raise. concessions of production and distribution Therefore, the indirect export strategy has may have considerable power in the the lowest participation and the direct business (Cateora and Graham, 2005). investment strategy has the highest Companies in direct export strategies also participation (Albaum, 2002). The second have more control over international strategic reference point of deciding for operations than indirect export strategies foreign market entry is the degree of (Dehghan, 2007) . control over international activities. The level of control over international 2.4 .Integrated Decision-Making Pattern operations is one of the influential strategic On Foreign Market Entry Strategy variables on choosing strategies of foreign Investigating studies conducted on foreign market entry. Strategies of foreign market market entry decisions points to two entry vary in terms of control, ranging from strategic reference points: management indirect exports to strategic partnerships, orientation and degree of control. Each of the creation of sub-branch under the these strategic reference points represents a ownership of a company, and foreign direct one-dimensional spectrum and is also the investment (Cateora and Graham, 2005). basis for the categorization of strategies of The decision about the extent of control foreign market entry. If we intersect these over a company's international operations dimensions and draw as matrices, different is influenced by factors such as marketing strategies of foreign market entry will be capability, technical knowledge, product obtained based on reference points compliance, international corporate determining them. In other words, based on strategy, international corporate these two dimensions, one can decide on experience, and ownership. Although the type of foreign market entry strategy. ownership can be possessed without Figure 1 shows the combination of these control and control without ownership, but two dimensions in the form of a two- greater ownership is usually associated dimensional matrix. The method of using with greater control. Having the advantage the matrix of diagram 1 in selecting foreign of ownership affects the choice of entry market entry strategies has two steps. strategy. Ownership advantage is caused by Firstly, the company has to decide on

253 production domestically or abroad. As over international operations are made mentioned, production decisions in the based on international experience, country or abroad are made based on the investment level, ownership, international attractiveness and risk of the target country corporate strategy, marketing capability, and the company's capability. Secondly, and technical knowledge. We plot the the company must decide whether or not to results of the first step on the horizontal control international operations. As stated axis and the second stage on the vertical above, decisions on full or flexible control axis of the matrix “figure 1”.

Focus of management

Foreign Domestic production production

Strategic alliances The strategy of

strategy indirect exports

Flexible 3 2

Direct investment The strategy of Control strategy direct exports Intense

4 1

Figure 1. An integrated pattern of decision-making strategies for foreign market entry

When the company decides to manufacture on the number of products and the extent of domestically and has the desire and ability their activities. Companies are sometimes to control international operations, the right forced to tend to international markets such option for foreign market entry is to use a as saturating the domestic market, and direct export strategy (cell 1). When the sometimes, voluntarily such as seeking company decides to manufacture market opportunities and increasing domestically but it doesn't have the desire profitability. Such companies that desire or ability to control international global market entry must decide on their operations, it is appropriate to use an own entry strategy. In the global indirect export strategy (cell 2). Also, when competition arena, the right and creative the company intends to manufacture abroad methods of entry guarantee a long-term but it does not have the ability and desire to presence in the market. The decision to control over international operations, it is foreign market entry is a crucial step in the suggested to use strategic alliance strategy process of internationalizing the company's to foreign market entry (cell 3), and finally activities. A return will not be possible when the company intends to manufacture without additional costs when entering the abroad and it has the desire and ability to market. Deciding on the selection of control international operations, the use of strategies of foreign market entry is direct investment strategy is an appropriate complex and difficult on the one hand, due option (cell 4). Companies can use one or to the dynamic and complex nature of entry more strategies simultaneously depending methods and the impact of a variety of

254 variables, and on the other hand, dimensions determining the strategies of investigating all variables is not possible foreign market entry. In this study, the due to temporal limitations and resources strategic reference point theory was used of companies. Therefore, it is necessary to (Dehghan, 2007) identify the strategic variables and

2.5. Airlines Foreign Market Entry Methods

Table 1. The ways of foreign market entry of airlines Focus of management Business activity in the home Business activity abroad country Strategic Alliances Strategy (Partnerships with local airlines active in air transportation in a Establishing a domestic strategic foreign country, providing services to other alliance with companies active in airlines, as well as travelers within and outside the field of air transportation and

the country) other domestic airlines to provide Joint venture with local companies active in services to foreign customers the relevant field in the target country's foreign

Flexible (often foreign airlines) in the

market home country by utilizing Granting exploitation privilege from internal physical and specialized commercial title to local companies to operate

Control facilities in the foreign target market by the company and monitor their performance Direct presence by investing in the foreign air Providing technical, engineering,

transport market through the establishment of repair, and training services to physical infrastructure and the deployment of customers (foreign airlines) in the specialist forces.

Intense home country by using the Ownership of a company active in the airline company's facilities. services in the target country.

In “Table 1”, the types of ways that a conditions and facilities of the company, company can adopt, given its ownership appropriate method(s) are suggested. and control over international interactions, as well as the management orientations in 2.6. Research Background foreign interactions, considering the operational field of a company that is Classification of international risks transportation industry are extracted and affecting the choice of foreign market entry sorted. Among the methods expressed in method: The Iranian automotive industry Table 1, according to the extent of control Shirkhodaiy (2014) studied the and ownership in international relations, as international risk categories affecting the well as the managerial orientation to choice of foreign market entry method for provide services to foreign customers the Iranian automotive industry. The result domestically or abroad, by considering the of this study confirmed the relationship between the specific risk of the host

255 country and the specific risk of the industry selection in the Australian construction with the choice of entry mode. In addition, services sector El-Higzi (2014) examined it showed that as mentioned risks increased, the factors of foreign market selection in the choice of entry method has tended the Australian construction services sector. towards exports, and by decreasing it, the The result of this study indicates that the entry method leads towards the joint choice to enter a foreign country is not only venture and foreign direct investment, the result of the economic, political, and which required more control and resources. structural factors of the host country but It was also found that the relationship also the result of the company's between the choices of entry mode with motivational interactions to expand and industry-specific risk and the country- availability of a related construction specific risk is not meaningful. project. Other factors at the host country Performance evaluation of the strategies of and origin country and at the global and foreign market entry of corporate level, affect the company's Company In another study, MalekAkhlagh approach to operations abroad. Export is (2013) conducted a study to evaluate the the dominant way of entry of respondents, performance of foreign market entry but companies are looking to invest abroad strategies of Iran Khodro Company during and increase their profit margin by the years 2009 and 2010. The results intensifying domestic competition and showed that the strategy of developing domestic demand fluctuations. Corporate strategic partnerships with global assets, expertise, and skill are another automakers with 75% success is in the first important factor; other factors are variables category and strategies to gain competitive of investment policies that affect trade and advantage of portfolio of products and investment flow between countries such as after-sales services in order to increase the return of the profit to the home country, customer satisfaction with 63% success, business barriers, and tax discrimination. the brand promotion strategy of Iran The major dangers of international trade Khodro and its products in the target are political instability. market with 61% success, empowering in the design and development sector (through 3. VARIABLES AND RESEARCH product development, platform and driving METHOD force) with 56% success, developing strategic partnerships with Islamic In this study, the independent variables are countries with 43% success, improving the degree of ownership and control of the sales quality and after-sales service level company over international relations, with 33% success, supply chain agility for which can impose two flexible and intense development and improvement of export modes, both of which affect the company's process with 31% success, designing and chosen methods and focus or management developing low cost car with 25% success, orientation which can accept two modes of direct and indirect export development with activity at home country or abroad, and 18% success, creation, development and either of these can influence the company's profitability of manufacturing sites in target chosen methods for foreign market entry. market with 16% success are in the next The research was descriptive and ranks in terms of percentage of realization observational. Documents and of target. Factors affecting foreign market questionnaires were the tools of data

256 collection and validity of the questionnaire were collected and analyzed. The spatial were evaluated by consulting professors and temporal realm of research is also ATA and aviation experts and the reliability of Airlines 2016. the questionnaire was determined by Cronbach's alpha method using spss20 4 .RESEARCH FINDINGS software. Initially, the questions were more 4.1. Investigating Data Reliability than fifty that through Cronbach's alpha method some questions which decreased After extracting data from questionnaires in homogeneity were eliminated. Finally, spss20 software, Cronbach's alpha was both sections of the questionnaire, which calculated separately for each subset of corresponded to two independent variables questions. The Cronbach's alpha for the 19 of the Survey, had an alpha of above 0.7 questions is 0.772 which is acceptable and the set of questions was approved. The (above 0.7). Regarding the first statistical sample of the study consisted of independent variable, the reliability and 100 managers and deputies and staff of homogeneity of each question with the set ATA Airlines who were given were also analyzed as described in “Table questionnaires selectively and the results 2”:

Table 2. Examining the reliability and homogeneity of each item in the questionnaire of the degree of ownership and control variables with the set

Cronbac Variance Average if h's alpha Ownership and control of the company in if the A the item is If the international activities item is deleted item is deleted deleted Designing and engineering the operational 1 72.86 58.000 .766 planning process Integration of revenues with activity plans in 2 72.89 56.826 .763 foreign business Strategies of access to an effective internal and 3 72.97 58.474 .771 external resource Triple integration of communications- 4 International business interactions- Strategic 72.74 58.821 .764 capabilities in the international arena 5 Detailed documentation 72.70 55.242 .751 Managers' awareness of business interactions 6 72.62 58.622 .763 procedures Improve automation policies in concluding 7 72.64 61.202 .770 international contracts of the aviation industry Strengthening technological capability 8 72.93 56.692 .760 infrastructure for international contracts The tendency to promote the logical profit of 9 72.78 58.921 .768 international interactions

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1 Coordination between educational, financial, and 72.68 56.583 .756 0 business units 1 Contract managers' awareness on job descriptions 72.75 59.765 .769 1 in contracts 1 Predicting the effective political (sanctions) 72.84 59.570 .769 2 dimensions in operational and strategic planning 1 Enhancing collaboration based on cultural 72.69 57.570 .758 3 perceptions of contractors 1 Experts' knowledge in the marketing of foreign 72.78 59.022 .764 4 clients 1 Forecasts of motivational financial returns for 72.80 56.606 .755 5 physical and online agencies 1 The role of the airlines 72.86 56.647 .757 6 1 Sequences of activities and audits of public and 72.68 61.493 .768 7 private organizations 1 Adaptability to technical-commercial environment 72.69 55.691 .752 8 1 Legal abilities in international contracts of aviation 72.68 55.836 .752 9 industries

“Table 2” confirms that the items have a independent variable, the reliability and good homogeneity because if any of the homogeneity of each question with the set questions are omitted, the Cronbach's alpha were also done as follows in “Table 3”. will decrease. Regarding the second

Table 3. Examining the reliability and homogeneity of each item of managerial orientation variable with the set.

Cronbac Average Varianc h's alpha if the e if the B Management orientations in international activities If the item is item is item is deleted deleted deleted 2 Experts’ consultations (in all stages of international 121.99 150.394 .862 0 contracts) 2 Focal thinking and convergence of planner managers 121.72 145.355 .860 1 2 Mastery of executives on foreign market analysis programs 121.80 146.646 .860 2 2 Mastery of adaptive planning methodology from a 121.70 148.980 .862 3 scheduling perspective 2 Knowledge and skills of executives in the time domain of 121.71 148.713 .862 4 the airline's executive projects

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2 Predicting the use of foreign opportunities in business 121.88 145.581 .860 5 aspects 2 Effective organizational leadership 121.70 145.586 .859 6 2 Managements’ international financial capabilities 121.70 145.848 .859 7 2 Level of experience and successful results in international 121.88 143.844 .859 8 business operation 2 Airlines' level of innovation in converting foreign threats 121.64 149.283 .863 9 into usable opportunities 3 Training programs regarding strategic orientation 121.95 144.775 .859 0 3 A sequence of detailed documentation in inquiry design 121.70 148.697 .862 1 and impact on scheduling 3 Airlines managers' agility in supercritical decisions 121.77 144.118 .859 2 3 Resistance to technology advancement and change by the 121.82 143.846 .858 3 organization 3 Online capabilities of the organization 121.88 140.996 .856 4 3 Decision-making capabilities regarding network-oriented 121.71 143.238 .857 5 international cooperation 3 Traditional or modern type of decision-makers 121.76 146.730 .861 6 3 Level of systematic flexibility of managers 121.72 149.658 .863 7 3 The amount of attention given to the mission of the 121.64 151.061 .862 8 organization in decision makings 3 The amount of attention to the organization's perspective 121.66 145.984 .860 9 in decision making 4 How to direct financial expenditures on international 121.77 141.290 .856 0 expenses 4 The kind of attitude to continue or stop a company's 121.86 145.536 .861 1 regional sales 4 Agile planning related to the development of sub- 121.88 142.147 .857 2 companies 4 Deciding on direct entry through investment in a particular 121.70 147.747 .861 3 area 4 Entering international markets by licensing local 121.71 148.794 .863 4 companies 4 Pay attention to the role of the joint ventures 121.71 148.834 .862 5 4 Detailed documentation related to the establishment of 121.88 143.359 .857 6 regional offices

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4 Eliminate bureaucracy and create delegation of authority 121.70 149.505 .863 7 procedures 4 Applying advisory forces of international business 121.95 148.250 .862 8 relations in service design Planning teams of identifying the political, commercial, social, and cultural changes affecting the airline's 4 international services and relationships, such as visas, 121.70 147.364 .861 9 currency fluctuations and business developments of destination countries, calendar of rituals, celebrations, events, terrorist threats, etc. 5 An intellectual consensus of international relations staff in 121.71 144.430 .857 0 foreign projects of Airlines

The Cronbach's alpha for the 31 questions 4.2. Summary Of Cronbach's Alpha is 0.864 which is acceptable (above 0.7). Calculation For Questionnaire “Table 3” also confirms that the items have Constructs a good homogeneity because if any of the Summary of Cronbach's alpha for both questions are omitted, the Cronbach's alpha sections of the questionnaire questions that will decrease. correspond to the two research variables is presented in “Table 4”

Table 4. The results of Cronbach's alpha calculation for the research constructs

Cronbach's Construct alpha 0.772 Ownership and control of the company over international activities 0.864 Management orientations in international activities

4.3. Descriptive Statistics demographic information is showed using Descriptive statistics were used to represent the frequency table for age, education, and demographic data. For this purpose, job experience features “table 5”.

Table 5. Frequency distribution of respondents by age, education, and work experience

Statistics Frequency Under 30 9 31-40 71 Age range Over 41 20 Sum 100 Associate degree 8 Education level BA degree 69

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MA and higher 23 Sum 100 2 years and lower 16 2-5 years 74 Job experience More than 5 years 11 Sum 100

4.4. Univariate Analysis A total of 19 items in the form of a 5-point The first statistical hypothesis of this study Likert scale were designed to evaluate and is as follows: measure the "degree of ownership and H0: The degree of ownership and control of control over international interactions" a company over international operations with a minimum total score of 1 indicating does not affect the choice of strategy (s) of a very low priority of this variable in foreign market entry. sorting and selecting strategies that affect H1: The degree of company's control over foreign markets entry and a maximum of 5 international operations has an impact on means the most influence on the choice of the choice of strategy (s) of foreign market entry strategy. To analyze the responses, entry. Excel software and t-test were used in the To accept or reject this hypothesis, the spss20 program, which confirms our following steps have been taken: observation by calculating the mean score 4.4.1. The degree of ownership and for all items related to this variable. control of the company over international interactions

Table 6. Statistical analysis of response to variable items of ownership and control

T-Test One-Sample Statistics Std. N Mean Std. Error Mean Deviation 19 4.0426 0.10132 0.2324 T-Test One-Sample Test Test Value = 3 95% Confidence Interval of the Sig. Mean t df Difference (2-tailed) Difference Lower Upper 44.857 18 0.000 1.04263 0.9938 1.0915

“Table 6” above shows that the mean to propose strategies of foreign market response to the ownership and control entry to the corporate managers. variable was 4.043 (out of 5) in total. The second statistical hypothesis of this According to experts, this reference point is study is as follows:H0: Focus or valued at an important level and influenced management orientation does not influence the strategic decisions of foreign market the choice of strategy (s) of the company's entry. From this point of view, it is possible foreign market entry.

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4.4.2.H1: Focus or management orientation the greatest impact on choosing entry influences the choice of strategy (s) of the strategy. “ Table 7” below shows that company's foreign market entry. To accept the mean response to focus or management or reject this hypothesis, the following orientations variable was 4.059 (out of 5) in steps have been taken: total. According to experts, this reference point is valued at an important level and 4.4.3. Focus or management influenced the strategic decisions of foreign orientation market entry. From this point of view, it is A total of 31 items in the form of a 5-point possible to propose strategies of foreign Likert scale were designed to evaluate and market entry to the corporate managers. measure the "focus or management Friedman's test of ranking was used to rank orientations in international interactions" these two influential factors. Friedman test that the minimum total score is equal to 1 results for two independent variables indicating very low importance of this calculated by SPSS software are shown in variable in prioritizing and selecting “table 8” effective strategies on foreign market entry and its maximum is equal to 5 which means

Table 7. Statistical analysis of items for managerial orientation variable

T-Test One-Sample Statistics Std. N Mean Std. Error Mean Deviation 31 4.0590 0.09806 0.01761 T-Test One-Sample Test Test Value = 3 95% Confidence Interval of the Sig. Mean t df Difference (2-tailed) Difference Lower Upper 60.131 30 0.000 1.05903 1.0231 1.0950

Table 8. Descriptive statistics of the Friedman test

Descriptive Statistics Std. Minimu Maximu N Mean Deviation m m Degree of control and 10 4.0426 0.420367 2.737 4.684 ownership 0 3 Management 10 4.0590 0.402330 3.129 4.645 orientation 0 3

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Table 9. Friedman test

Ranking of independent variables by Friedman test Ranks Mean Rank

Degree of control and ownership 1.49

Management orientation 1.52

Friedman Test Statistics

N 100

Chi-Square 0.091

df 1

Asymp. Sig. 0.763

Table 10.Determination of p-value (certain possibilities of occurrence) by the degree of freedom and χ2 value.

Percentage points of the Chi-Square Distribution Degrees Probability of a larger value of χ2 of 0.99 0.95 0.90 0.75 0.50 0.25 0.10 0.05 0.01 freedom 1 0.000 0.004 0.016 0.102 0.455 1.32 2.71 3.84 6.63

2 0.020 0.103 0.211 0.575 1.386 2.77 4.61 5.99 9.21

3 0.115 0.352 0.584 1.212 2.366 4.11 6.25 7.81 11.34

4 0.297 0.711 1.064 1.923 3.357 5.39 7.78 9.49 13.28

5 0.554 1.145 1.610 2.675 4.351 6.63 9.24 11.07 15.09

6 0.872 1.635 2.204 3.455 5.348 7.84 10.64 12.59 16.81

7 1.239 2.167 2.833 4.255 6.346 9.04 12.02 14.07 18.48

8 1.647 2.733 3.490 5.071 7.344 10.22 13.36 15.51 20.09

9 2.088 3.325 4.168 5.899 8.343 11.39 14.68 16.92 21.67

10 2.558 3.940 4.865 6.737 9.342 12.55 15.99 18.31 23.21

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4.5. Interpretation Of Variables’ Test or abroad, as well as the degree of Results ownership and control of the company over First, we interpret outputs in “Table 9”. The its international relations which can be first line marked with N indicates the flexible or inflexible. The final result of the number of respondents to the Friedman test of ranking can be questionnaire. The second line is the chi- summarized as “equation (1)”: χ2 (1) = square, which is the test statistic, which 0.091, p = 0.763, df = 1 specifies that to what extent the research There is no significant difference between variables are different. By considering the the rankings (priority of variables) and value of 0.091, we find that these two their effect on the selection of foreign variables are not significantly different in market entry methods of a company is terms of the degree of influence on the almost the same. So, by integrating two dependent variable. The third line shows independent variables into one unified the degree of freedom whose value equals model (Figure 1, page 6), we should choose the number of variables tested minus one. the appropriate approach according to the The last line shows the approximate p- company’s conditions while value (the level of coverage of the test simultaneously considering the impact of statistic). these two variables By looking at the final output table obtained from the Friedman test and the 5. DISCUSSION AND CONCLUSION chi-square distribution table, by mapping Decision making about choosing foreign the chi-square value to the degree of market entry strategies is complex and freedom one, it becomes clear that the level difficult due to the complex and dynamic of significance can be considered to be nature of entry methods and the impact of approximately 0.88. Since the value of a variety of variables. Also, when entering Asymp.sig (or p-value (certain possibilities the market, a return will not be possible of occurrence)) is less than 0.88 and equals without additional costs. But using relevant 0.76, so the results show that the H0 theories, important dimensions influencing hypothesis is rejected. However, the lower the choice of foreign market entry the p-value, the easier it is to reject the null strategies can be identified. Given that the hypothesis. By these interpretations, it is main focus of this research is to examine concluded that the two independent and prioritize strategies effective on variables (according to Table 9, rankings of foreign market entry of an airline, we set up the independent variables) almost equally two hypotheses based on this, independent affect the dependent variable, and thus the variables have been extracted through hypotheses H0 that indicate the two talking to experts, international business independent variables do not affect the theories, and past related research and their dependent variable are rejected and effectivity or non-effectivity on the hypotheses H1 are accepted. This dependent variable (foreign market entry conclusion is consistent with the results of strategy) were evaluated. The research was the first paper reviewed in foreign research carried out on 100 employees of ATA records on the effectiveness of Airlines, as an example. The results of the management orientations regarding study indicate that two defined strategic international activities in the home country reference points, in order of priority,

264 management orientations, and the degree The scores obtained from the experts' of ownership and control, are effective in responses to the designed questionnaire selecting the appropriate strategies for indicate that the degree of ownership and foreign market entry by the managers of a control of the company over international business company. Next, these findings interactions as well as the management were accepted and ranked through the final orientation in international business output of the Friedman test as well as the interactions has an impact on prioritizing results of the first case of foreign research and selecting foreign market entry records . strategies. The final output of the Friedman test also confirmed this statement. This 5.1.Variables Description analysis is consistent with the results of The mean score of responses to previous research (El-Higzi (2014)). management orientations was 4.059 and Therefore, there was no evidence to reject this strategic reference point has been the two hypotheses. evaluated important and effective by experts. Three of the most important items 5.3. Suggested Foreign Market Entry extracted from the questionnaire that Methods To Airline's Managers influence the choice of foreign market As ATA Airlines is younger than other entry strategy and managers must pay competitors and has the potential of growth attention to in this independent variable are and excellence until it reaches a more “the level of innovation of the airline in established international position and converting external threats into possesses financial, physical, technical, opportunities”, “the amount of attention to and human assets, so regarding the variable the organization's mission in decision of ownership and control which includes making”, as well as “the amount of intense or flexible control - must inevitably attention to the organization's vision in select flexible control. However, from the decision making”. The mean score of managements’ orientation point of view, response to the degree of ownership and the situation is different and from both control was 4.043 and this strategic perspectives of activity in the country or reference point has been evaluated abroad, suggestions can be presented important and effective by experts. Three considering the integrated matrix of of the most important items extracted from internationalization strategies of airlines the questionnaire that affect the choice of (“Table 1”). foreign market entry strategy as the second The most appropriate strategy concerning independent variable and managers must infrastructural and technical facilities is pay attention to it are “managers' evaluated as follows by the approach of awareness and mastery to interactions”, providing services to foreign customers at “promotion and modify policies to the customer's place (abroad): conclude international conventions in the 1. Strategic alliances method (Partnership aviation industry” and ultimately with local airlines active in air “coordinate training, finance and business transportation in a foreign country units regarding providing services to other airlines and domestic and foreign 5.2Analyzing The Hypotheses

265 travelers); a flexible way to be active trade, and the actual size of the private abroad. sector versus the public sector); Awareness 2. Joint venture with local companies of target market capability (including active in the relevant field in the foreign awareness of the general demand for the country's target market, which is also a specific product, the amount of costs and flexible way to be active abroad. changes required to adapt the product to the Now, if the managers' opinion is to provide target market and the level of competition services to foreign customers at the in the foreign target market); Host company location (inside the country), the country's economic status (payments most appropriate international business balance, foreign reserves, exchange rate method concerning infrastructure and access to required currency); (financial and physical), technical and 3. Agenda of foreign market entry after personnel facilities is suggested as follows: two to five years of the establishment of Providing technical, engineering, repair, the company and training services to customers (foreign airlines) in the country of origin and using 5.5. Suggestions For Future Research the company's facilities. Since for a variety of reasons, such as time restriction, the case study of this research is 5.4. Providing Solutions To Managers limited to only one active company in the And Decision-Makers Of Business field of air transportation, it is, therefore, Companies To Start Activity In Foreign possible that the results obtained from this Business study may not be simply and directly Given the impact of external (micro and generalized for other companies and there macro) and internal (managerial and might be other strategies that can only be corporate) factors on company's readiness revealed by expanding the scope of for foreign market entry, and the results research to other companies. obtained from the questionnaire about Another point is that the issue of selecting items related to each of the research a foreign market entry strategy in this study variables, solutions are presented as has been measured from the perspective of follows: management orientation and the degree of 1. Increasing the experience of foreign control and ownership of the company in communications and the knowledge of the international relations. But it may be company's managers and decision-makers possible to gain more influential by attending exhibitions, conferences and perspectives by conducting more specialized workshops and regular visits interviews with managers, staff, and from international markets to gather experts in the field of air transportation valuable information and build close services that extend our two-dimensional relationships with key members of the insight in the present study which will distribution network in readiness of the reveal more complex aspects of managerial company for foreign market entry; decisions on the subject discussed. 2. Having a coherent marketing plan for Different theoretical approaches offer foreign market entry, considering the different selection mechanisms for political situation of the host country comparison. For example, goal-based and (including political stability, restrictions on resource-based attitudes suggest the

266 importance of the internal capabilities of [7] Hamidizadeh, M.R. 2013. Explaining the organization as a critical and vital and Evaluating the Readiness of Iranian reference. Theories of enterprise / Small and Medium Enterprises for Foreign industrial economics and the dependence Market Entry. Journal of Entrepreneurship of modern resources and Development. institutionalization suggest foreign [8] Khoye, A. 2015. Secrets of stakeholders such as competitors, International Trade. 2nd Ed. Mehran Book suppliers, customers, and other non- Institute, Iran. economic stakeholders as key reference [9] MalekAkhlagh, M. 2013. Explaining points. Finally, studies and literature on and Analyzing the Evaluation of Iranian corporate identity suggest strategic Automotive Industry Strategies in Foreign intentions and organizational change and Market Entry. Quarterly Review of the importance of time, especially past and Business Management. future orientations, as key reference points. [10] Shirkhodaiy, M. 2013. International Therefore, the theoretical review of this Risk Classification Affecting Selection of research can be expanded to more than two Foreign Market Entry Methods: Iranian strategic reference points. Automobile Industry. Journal of Human Resource Management Researc. References:

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