Market consolidation, market growth, or new market development? Owner, firm, and competitive determinants

Abstract

Market entry decisions are complex and involve high sunk costs with uncertain or risky outcomes. In this study we explore how owner, firm, and competitive pressures shape this decision. Using a large UK data set of SMEs, we find that the preferred form of growth, and growth is not always desired, is expansion in existing markets. Key determinants of the decision to pursue a new market entry strategy are formal education, and large firm based market competition. Further, these decisions are made simultaneously not sequentially.