Before proceeding to explain about psychic distance in detail they applied the theory to the diversity of cultures within their group, and the particular difficulties and restrictions they were faced with, and consequently how they dealt with these issues.
Although they talked about the difficulties in the approach to psychic distance and displayed good knowledge and understanding through depth of theory within the presentation they failed to give a concrete definition. Basic knowledge to introduce the subject was therefore absent in the presentation, even though the significance of psychic distance was well presented. They could have used the definition: “Due to uncertainty about the market environment, firms will enter markets that are similar to their own first and then will gradually expand into other markets” (Johanson & Vahne, 1977). This is linked to all the concepts related to the culture of a segment.
The example of L'Oreal was well explained and demonstrated clearly how a company can effectively use and deal with psychic distance to internationalise. It also expressed the importance of entry mode choice, depending on the sector concerned (laboratory, marketing, etc.), and how firms can take advantage of cultural differences through their advertising.
[...] Psychic distance and proximity concepts in overseas markets Contents 1. Theory Before proceeding to explain about psychic distance in detail they applied the theory to the diversity of cultures within their group, and the particular difficulties and restrictions they were faced with, and consequently how they dealt with these issues. Although they talked about the difficulties in approach to psychic distance and displayed good knowledge and understanding through depth of theory within the presentation they failed to give a concrete definition. [...]
[...] Conclusion We have been surprised that the group did not give any concrete definitions of the key concepts of their presentation subject. We have had the feeling that the group has the assumption that we were aware of the basis and thus, did not “find” it important to spend time on defining important concepts. For us, the group had developed specificities through good examples but did not provide a good foundation of basic theory. However, the presentation was quite good and dynamic with a good understanding of the subject area. [...]
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