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The immense amount of literature that imparts knowledge about international market entry mode research (Brouthers and Hennart, 2007; Weisfelder, 2001; Werner, 2002) shows the broad significance of choosing the correct market entry mode because it determines the success and stability of a company’s international operation. it means, one wrong action and it cannot be rectified without severe implications for the firm’s future (Pedersen et al., 2002).The innovations for a specific region and waiting for clients to approach them are a decade back history. Organizations must realize that their services and products, regardless of how good they are, simply do not sell themselves (Kotler, 2011).
The interest of study is on the high regulated market with an innovative offering by a new entrant and the barriers associated with the entry in the market. As per the research and statistical analysis, only a fraction of new entrants survives after a couple of years of operations, failure rate of new ventures in the first year its self is around 40 percent. up to four-year survival companies are around 50 percent, and mostly less than half cross more than five years (Timmons 1990). Market selection techniques and financial constraints are the most important factors of failure of new entrants are argued in a journal by (Cabral and Mata, 2003). This argument is also supported by several well-known authors who mentioned these barriers and several other barriers are a block for market entry for small-scale ventures (Hariharan & Brush 1999). These researchers found also a low rate of innovation and high barriers to entry have a common link, especially in high regulated industries which results in lower number of entries of ventures (Friedman & Taylor 2011). previous studies also figuring out that high entry barriers have a strong influence on the industry performance, reducing productivity, employment and increasing labor costs, decreasing R&D efficiency, hampering innovation and leading to suboptimal allocation of resources(Cullman & al. 2012).
From years to years each researchers depending on industry and regions did researchers on different barriers of market entry and it always varied to each other. Especially for new innovative startups/ entrants always need to face the heights of barriers especially in regulated industry. Lately, barriers to entry have been defined as factors that limit competition by preventing market entry of new firms and in the process often leading to an increase in the profits of the established incumbents in the marketplace (Karakaya 2002). There is always also a lack of research on different variables of the barrier of different industries and it affects the new companies who would like to make their entry. While we talking about high regulated industries this kind of practical studies of industry are missing and it always stands as high barrier industry and results in fewer entrants (Lutz & al. 2010)
The study on barriers for each industry is diverse with different factors and more of its characteristics in the market. While doing the empirical studies the barriers are totally different in highly regulated industries and we need to consider the characteristics of a new startup company, its industry life cycle, the markets which they intended to enter and also the product specifications. The new entry companies with new markets in mind need to face no further experiences of the market and financial capital issues. So in this thesis, we are discussing the new entry company which is specialized in patient care devices and would like to enter new markets with no further experiences. We are also discussing the barriers associated with new markets and how to find a solution out of it and also proposing a market entry strategy. While talking about the medical device industry, most of the segments are handled by most strong established, existing and experienced companies in the markets, and the profit margin associated with these segments are totally diverse from other industries due to their monopoly, sustainability, and wide customer segments. The main barrier we see in this industry which makes the giant companies stronger and keeps away from new entrants is the highly regulated government policies from different authorities.
In this thesis we are analyzing Germany as a target market to entry and thereby in empirical studies we need to analyze the economic conditions, government policies and medical regulations. The company is the United Kingdom Based new entrant named Diabetic boot co. and they come with a unique product with multiple technologies which can treat the diabetic ulcer related issues affected by feet’s and they are trading the product in a brand name of Pulse Flow DF. The Diabetic Boot Company has transitioned from a Startup to a trading SME in 2016. The product belongs to class 2 medical device and its characteristics and specifications can help to achieve good results in diabetic affected society. As its coming in high regulated industry, the barriers associated are unique to patient care device segments. We will be interviewing also the industry experts in each country to get the best analysis and real-time scenarios associated with barriers. In this literature, we will be examining the associated barriers for Diabetic Boot Company to enter the market. And it’s a known fact that strong economic regions like Germany and Switzerland got very hard regulations for a new company to start their operations and trade. This literature also provides potential solutions to influence the barriers to entry from the point of view of the entrant and also the government in aiding innovation diffusion in health care leading to improved social welfare consequences.
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