Kulturforskelle – og deres indvirkning på valg af Entry Mode strategi: Et casestudie af den danske handelsvirksomhed R2 Pharmactive A/S’ valg af Entry Mode strategi i Brasilien i forhold til kulturforskellenes indvirkning på samme

Christian Albert Sohl

Student thesis: Diploma thesis


This paper addresses the Internationalization process for a Danish trading company acting in the pharmaceutical business. The aim is to identify the culture differences between Denmark and Brazil, and the consequences and impact of these on the choice of Entry Mode strategy for the Brazilian market for this company. This Case Study features R2 Pharmactive A/S as the Case Company. This company forms part of the R2 Group, which consists of several dif-ferent divisions such as Agro, Consume and Chemicals. The main focus in this paper is to come up with a suggestion of the choice of Entry Mode strategy for Brazil, when we look specifically at the impact of culture differences on this Entry Mode strategy decision. This suggestion of choice will be made on basis of the empirical investigation about the cultural differences between Denmark and Brazil, and how these differences in culture can affect the choice of Entry Mode strategy. This investigation is based on Internationalization theories such as OLI (Dunning, 1988) and The Eclectic Theory (Hill, Hwang & Kim, 1990), which have been used to apply some factors to the company for analyzing the best possible Entry Mode strategy for Pharmactive in Brazil. The culture differ-ences will be analyzed with the use of The 4 Key Dimensions (Hofstede, 1991), and The Cul-tural Analysis Study (Gesteland, 1997), where the Deal-Focus versus Relationship-Focus is described. The trading business is different from other types of business, where there exists a producer and an end-user. In this case the goods are normally purchased from the manufac-turers in China and India, and afterwards sold to the customers worldwide. This implies that the parameters price and service are extremely important, as the products are the same for the end-user, no matter if they are purchased from R2 Pharmactive A/S or from a competitive company. The added value in this part of the value chain is very important, as this can be a way to differentiate one from other competitors. After some time building up the sales in Eu-rope, R2 Pharmactive A/S has decided to expand into Latin America focusing on Brazil as the absolute most important and interesting market. The focus in this paper is therefore on Brazil, and the other countries will not be addressed here. The background of this choice is the coun-try’s incredible growth throughout the latest years combined with the estimated GDP growth for the next 30-40 years. At the same time there exists a very large pharmaceutical industry in this country, and a great part of this purchases raw materials from outside Brazil. Throughout the analysis, I have discussed some factors in order to be able to suggest the best possible Entry Mode strategy, the culture differences taken into account, for the case Company. The culture differences between Denmark and Brazil has been laid out, analyzed and discussed with the objective to come to the most optimal solution. The different Entry Mode strategies has been laid out, analyzed and discussed, and in continuation the im-pact of the culture differences has been analyzed and discussed. The conclusion is that R2 Pharmactive A/S has been suggested to enter the Brazilian marked with the use of a local sales agent in the start-up phase. The agent possesses Location-Specific knowledge and local personal network, which can be of crucial importance for Pharmactive in this start-up phase. After the start-up phase (1-2 years), the company should enter a Joint-Venture with the local agent in order to strengthen the position on the market, and at the same time lower the risk of expropriation.

EducationsGraduate Diploma in International Business, (Diploma Programme) Final Thesis
Publication date2012
Number of pages92