COPENHAGEN BUSINESS SCHOOL CAND. MERC. EBA Master of Science in International Marketing and Management ACADEMIC YEAR 2017-2018 Master’s Thesis by Christopher Iain Davis Evaluating Internalization Strategies for Music Streaming Services A strategic, market and implication analysis of music streaming services internationalizing into South Korea Date of Online Submission: May 15th, 2018 Date of Hand-In: May 15th, 2018 Number of pages: 133 Number of characters: 164.059 Supervisor: Professor Jakob Lindahl 1 Table of Contents Abstract. ........................................................................................................................................ 1 INTRODUCTION. ............................................................................................................................. 2 PROBLEM STATEMENT. .................................................................................................................. 4 RESEARCH METHODOLOGY. ........................................................................................................... 5 Methodological Aspects ........................................................................................................................... 5 Research Philosophy ............................................................................................................................................ 6 Research Approach .................................................................................................................................. 8 Research Design ....................................................................................................................................... 9 Purpose of The Research Design............................................................................................................. 10 Methodological Choices ......................................................................................................................... 11 Design Technique ................................................................................................................................... 13 Data Collection & Analysis...................................................................................................................... 14 Primary Data ..................................................................................................................................................... 16 Interviews ......................................................................................................................................................... 16 Secondary Data ................................................................................................................................................. 17 Limitations of Data Collection ............................................................................................................................ 19 LITERATURE REVIEW. ................................................................................................................... 19 Multinational Enterprise & the Service Multinational ............................................................................ 20 Criticism ............................................................................................................................................................ 20 Internationalization Theory .................................................................................................................... 21 Internationalization Development Strategies ..................................................................................................... 21 Modes of Market Entry ...................................................................................................................................... 22 Criticism & Service Firm Internationalization ...................................................................................................... 23 Foreign Direct Investment.................................................................................................................................. 26 FDI in Services ................................................................................................................................................... 27 Criticism ............................................................................................................................................................ 29 Uppsala Model ....................................................................................................................................... 30 Criticism ............................................................................................................................................................ 30 Effects of Foreignness ............................................................................................................................. 31 The Eclectic Paradigm ............................................................................................................................. 32 Criticism ............................................................................................................................................................ 33 Institutional Theory ................................................................................................................................ 33 Music Streaming Services ....................................................................................................................... 35 Theoretical Framework .......................................................................................................................... 36 ANALYSIS. .................................................................................................................................... 37 Semi-Structured Interviews .................................................................................................................... 38 The Selective Coding Process.................................................................................................................. 38 Findings .................................................................................................................................................. 39 2 The South Korean Music Streaming Industry ......................................................................................... 40 Business Models: South Korean Music Streaming Services .................................................................... 42 Motives & Determinants of Internationalization to South Korea ........................................................... 43 Digital capabilities.............................................................................................................................................. 43 Knowledge Based Resources .............................................................................................................................. 44 The Consumer: Digital Readiness ....................................................................................................................... 44 FDI and Trade Liberalization ............................................................................................................................... 45 Effects of Foreignness ........................................................................................................................................ 45 Effects of Formal & Informal Institutions ............................................................................................... 47 Political Institution ............................................................................................................................................. 47 Legal Institution ................................................................................................................................................. 49 Korean Music Copyright Association (KOMKA) ................................................................................................... 49 Recording Industry Associate of Korea (RIAK) ..................................................................................................... 50 Social Institution (Informal)................................................................................................................................ 51 DISCUSSION. ................................................................................................................................ 52 Market Structure .................................................................................................................................... 53 Benefits of FDI Determinants to Spotify ................................................................................................. 54 Technical Capabilities ........................................................................................................................................ 55 Skilled Workforce .............................................................................................................................................. 56 Trade Liberalization ........................................................................................................................................... 56 Effects of Foreignness ............................................................................................................................. 56 Institutions ............................................................................................................................................