The previous literature has identified different forms of barriers associated with a new entrant for a new market and in this part we are discussing about theoretical literature of different form of market entry we can make and regulations of market entry for a medical device firm to enter and certain implications for entry success as per the timing and scale of the entry in market. An entry mode can be defined as “a structural agreement that allows a firm to implement its product market strategy in a host country either by carrying out only the marketing operations (i.e., via export modes), or both production and marketing operations there by itself or in partnership with others (contractual modes, joint ventures, wholly owned operations)” (Sharma and Erramilli, 2004, p. 2).
Entry modes can be differentiated by level of control, commitment, resource and risk involvement (Blomstermo et al., 2005:212). According to Blomstermo et al., (2005:212) control is the single most important factor that determines both risks and returns of the performance of the investment abroad and the amount of frictions in the relationship between sellers and buyers. They define control as the firm’s’ ability to influence the various management systems the organization have. Recourse commitment is explained as followed; it involves devotion of assets to specific use or that either fixed or difficult to reallocate without very large costs.
Firms that want to enter a new market have a variety of entry modes to choose from. According to Root (1994:6) they can be divided into three groups. The first group is entering new markets through export modes and that include indirect and direct exporting, direct agent/distribution, and direct branch subsidiary and other. The second group is contractual entry modes; licensing, franchising, technical agreements, service contracts, management contracts, construction/turnkey contracts, co-production contracts and other. For the last one that is called investment entry mode includes sole venture: new establishment, sole venture: acquisition, joint venture: new establishment/acquisition.