Push and pull factors in global marketing
What makes a company choose to enter into a new international market? Academics have pondered this idea for considerable time and have come up with a range of potential drivers for internationalisation. These drivers can be broadly categorised into push and pull factors (Alexander 1997).
Push factors relate to phenomena in a company’s domestic market that motivate it to enter into new markets. Pull factors are phenomena in other international markets that draw the company to them.
Push factors tend to be regarded as negative (Evans et al. 2008). For example, a firm may find that it has saturated its domestic market and is therefore driven to enter a new market. However, push factors need not always be negative; for example, a domestic government may encourage a domestic firm to trade globally and offer tax benefits or support to do so. Push factors can include resources, management expertise, company culture and environmental factors.
Pull factors are commonly seen as positive or opportunistic drivers for internationalisation. For example, a new international market may have an emerging middle class with increased spending power, presenting a potential opportunity for a company to exploit. Pull factors can include market size, economic and social conditions, and foreign market characteristics.
In practice, push and pull factors do not exist in isolation; instead, they tend to interact to help drive internationalisation. For example, companies such as Tesco actively seek growth in both domestic and international markets simultaneously (Evans et al. 2008).
To explore how push and pull factors drive or impede international expansion, read the literature review section of the article Revisiting Retail Internationalisation: Drivers, Impediments and Business Strategy (Evans et al. 2008), which runs from the subheading ‘Introduction’ up to the subheading ‘Findings’.
Make some notes using the following prompts:
- What is the main argument within this research paper?
- Which push factors are identified in the literature?
- What pull factors are identified in the literature?
Alexander, N. (1997) International Retailing. Oxford: Blackwell
Evans, J., Bridson, K., Byrom, J., and Medway, D. (2008) ‘Revisiting Retail Internationalisation: Drivers, Impediments and Business Strategy’. International Journal of Retail & Distribution Management [online] 36 (4), 260–280. available from http://dro.deakin.edu.au/view/DU:30017205 [29 November 2018]
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