As system integration (SI) industry is growing rapidly, its business environment becomes more complicated: large multinational companies form foreign affiliates as captive markets, competition is fierce, but earning rate is row. Thus, competitive foreign companies start to get in other domestic markets, as a strategy of growth, to overcome their own domestic limitation, and to achieve continuing growth. Amidst these highly complicated changes, SI companies in developing countries like Korea are trying to get into foreign, in particular, Asian markets.
So far, the pattern of foreign direct investment by firms in developing countries including Korea seems to be different from that by other firms in developed countries, yet most studies of FDI are mainly focused on developed nations' MNEs entering developing countries.
In this thesis, we view SI industry as a service industry: generally speaking, services can not be seen to the customers, and they usually require customers' participation. Therefore, in studying the foreign market entry by SI companies, we should think over factors related with service as well as manufacturing industry.
Mainly from the Internet Electronic News, we gathered information about FDI activities of five Korean SI companies for the past five years, and analyzed main determinants of their foreign market entry decisions. Among them, we were able to identify key influential forces, i.e., existence of domestic customer companies in the foreign market, service complexity, and firm's technology capability, which a global firm must take into account when deciding its mode of foreign market entry.
