International Market Entry Strategies of Russian Organizations under Changed External Economic Conditions
Galina Litvintseva, Andrey Ivashchenko, Daniil Arbatskiy, Aleksey Kolmagorov
The change in the system of world economic communications as a result of sanction policy towards Russia and its allied countries forces enterprises and organizations to prove strategies of entry into foreign markets for the purpose of income generation and inclusion in new value chains. Therefore, the purpose of this research is the comparative analysis of factors and assessment of the application of international market entry strategies of Russian IT companies. Qualitative and quantitative methods of economic research were applied to achieving this goal. Qualitative methods included PESTEL analysis, situation and comparative analysis. Quantitative methods included the cost-benefi t method, statistical techniques and economic analysis methods. Tabular and graphic approaches are used for text visualization. In this research the factors infl uencing organizations activity in the international sphere and also the main foreign market entry strategies of IT companies were analyzed. Comparative analysis revealed benefi ts and shortcomings of each strategy, taking into account modern forms of business and currency risks. For the Russian IT company producing software three strategies were evaluated: export, franchising and direct investments. The choice of the IT industry for considering international market entry strategies of Russian organizations is proven. It is necessary to separate the development of new technologies and infrastructure, existence of fi nancial resources and pressure of economic sanctions from the factors infl uencing this process. Of the three strategies analyzed, the lowest-cost and lowest-profi t strategy was the franchising strategy; it can be used when there is a shortage of fi nancial resources. For “growth hacking” the expensive, but highly profi table strategy of direct investment taking into account currency hedging is applicable. Proceeding from the analysis of the infl uencing factors and legal conditions of the Russian Federation it is expedient to follow the strategy of average profi table export for ensuring company development.
The practical application of strategies for organizations to enter foreign markets is a multifaceted object of research that requires a comprehensive analysis of various aspects of business expansion. The received results will help companies make weighed decisions when choosing the optimum strategy for expanding their business in the international market.