Iranian traveling agency in Sweden - DiVA portal727899/FULLTEXT01.pdfThis is a multiple case study...
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Iranian traveling agency in Sweden - Opportunities and challenges Spring 2014 Author: Seyed Sina Mortazavi Supervisor: Dr. Mosad Zineldin Examiner: Dr. Pejvak Oghazi Course code: 2FE16E
Transcript of Iranian traveling agency in Sweden - DiVA portal727899/FULLTEXT01.pdfThis is a multiple case study...
Iranian traveling agency in Sweden
- Opportunities and challenges
Spring 2014
Author: Seyed Sina Mortazavi
Supervisor: Dr. Mosad Zineldin
Examiner: Dr. Pejvak Oghazi
Course code: 2FE16E
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ABSTRACT
This is a multiple case study that offers information concerning Iranian traveling agencies in
Sweden. The focus is on three traveling agencies located in Stockholm and Gothenburg. They
are currently 12000 Iranians living in Sweden, most of these people travel to Iran regularly.
There are also Swedish travelers that visit Iran, some of these travelers are tourist and some
visit Iran for other purposes. Iran and Sweden have different background and cultures; the
focus of this study is to identify the strategies that must be used by an Iranian investor in order
to open a traveling agency in Sweden. How to handle different business situation in Sweden
and how to adapt to the Swedish culture are some of the factors of this study.
They are number of theories that have been used to generate more information concerning the
topic of the study. Four interviews were conducted with the managers of three Iranian traveling
agencies in Sweden to gather primary data. It was noticed that the country has a very
transparent business regulations system, but it is hard to adapt to. Cultural differences can also
be an obstacle at the beginning of the business and must be solved. More detail of the results is
provided in the analysis and conclusion chapter. Finally the study provided number of
managerial recommendations and suggestions for further research.
Keywords: Relationship marketing, Cross-cultural marketing, Porters five forces, Market segmentation, foreign market entry
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ACKNOWLEDGEMENTS
This research paper was written as my bachelor thesis during my last semester at Linnaeus
University in the spring of 2014. Working with this thesis has been a very motivating and
educational experience since I have applied theoretical knowledge as well as achieved valuable
knowledge. This will not only expanded my educational knowledge but will go a long way to
help me in my professional career. I would like to take this chance to acknowledge the efforts of
some people who in one way or the other, made this a success.
Without their help, it would have been difficult for me to accomplish this task.
First of all I would like to express great thanks and appreciation to my examiner Dr Pejvak
Oghazi and tutor Professor Dr Mosad Zineldin at the School of business and economics,
Linnaeus University for their cherished support, supervision and considerable feedback they
provided me with. Without their help this research would not have been possible.
Additionally, I would like to thank my dear classmates for their positive feedback throughout the
process which helped in improving my manuscript. I am also grateful to the persons at Ljungby
municipality and Iranian embassy at Stockholm who choose to cooperate with me and provide a
platform for to conduct this research.
Lastly, I want to express my gratitude to my family for the support that they gave me during the
entire time of my studies.
Linnaeus University
School of Business and Economics May 2014
Seyed Sina Mortazavi
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Table of contents: 1 Introduction ................................................................................................................................................ 8
1.1Background: ......................................................................................................................................... 8
1.2 Problem discussion ............................................................................................................................. 9
1.3Purpose: ............................................................................................................................................. 11
1.4. Proposed research questions:.......................................................................................................... 11
1.5 Research questions of the study ....................................................................................................... 12
1.6 Outline of the thesis: ......................................................................................................................... 12
2 Literature review ...................................................................................................................................... 14
2.1 Relationship marketing ..................................................................................................................... 14
2.2 Cross-Cultural marketing .................................................................................................................. 15
2.3 MARKET SEGMENTATION ................................................................................................................. 17
2.4 Porter’s 5 forces: ............................................................................................................................... 19
2.5 Foreign market entry ........................................................................................................................ 22
3 Methodology ............................................................................................................................................ 24
3.1 Research approach: .......................................................................................................................... 24
3.1.1 Inductive versus deductive research approach ......................................................................... 24
3.1.2 qualitative versus quantitative research method ...................................................................... 25
3.2 Research design ................................................................................................................................ 26
3.3 Data sources ...................................................................................................................................... 27
3.4 Research strategy .............................................................................................................................. 28
3.5 Data collection method ..................................................................................................................... 30
3.6. Data collection instrument .............................................................................................................. 32
3.6.1 Operationalization and measurement of variable ..................................................................... 33
3.6.2 Interview guide design ............................................................................................................... 37
3.6.3 Pretest ........................................................................................................................................ 38
3.7. Sample collection ............................................................................................................................. 38
3.8. Data analysis .................................................................................................................................... 40
3.9 Quality criteria .................................................................................................................................. 41
3.9.1 Content validity .............................................................................................................................. 41
3.9.2 Construct validity ....................................................................................................................... 41
3.9.3 External validity .......................................................................................................................... 41
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3.9.4 Reliability .................................................................................................................................... 42
3.10 chapter summary ............................................................................................................................ 42
4. Imperial investigation: ............................................................................................................................ 43
4.1 Case A ................................................................................................................................................ 44
4.2 Case B ................................................................................................................................................ 48
4.3 Case C traveling agency..................................................................................................................... 51
5 Analysis ................................................................................................................................................... 55
5.1 Foreign market entry ........................................................................................................................ 56
5.2 Cross-cultural marketing ................................................................................................................... 57
5.3 Porters five forces ................................................................................................................................. 58
5.4 Market segmentation ....................................................................................................................... 61
5.5 Relationship marketing ..................................................................................................................... 62
6 Conclusion ............................................................................................................................................... 66
6.1 Discussion of the Results................................................................................................................... 66
6.2 discussion of Research questions ..................................................................................................... 66
6.2.1 What opportunities does an Iranian traveling agency have in Sweden .................................... 67
6.2.2 What kind of barriers do Iranian investors have when establishing a traveling agency in
Sweden despite the cultural and background differences of the two countries ............................... 67
6.3 Implications ....................................................................................................................................... 68
6.3.1 Implication for theory ................................................................................................................ 68
6.3.2 Implication for managers ........................................................................................................... 69
6.4 Limitation of the study ...................................................................................................................... 70
6.5 future researches .............................................................................................................................. 71
6.6. Concluding remark ........................................................................................................................... 72
References: .................................................................................................................................................. 72
Appendix: .................................................................................................................................................... 79
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List of tables
Table 1: Deductive versus Inductive ……………………………………………………………………………………………………………………24
Table2: Research strategies ………………………………………………………………………………………………………………………………..28
Table3: Operationalization………………………………………………………………………………………………………………………….……….34
Table4: interview questions…………………………………………………………………………………………………………………………………37
Table5: Methodology summary………………………………………………………………………………………………………………………..…42
Table6: company specifications…..………………………………………………………………………………………………………………………44
Table7: Summary of foreign market entry………………………………………………………………………………….…………….………...56
Table 8: summary of cross-cultural marketing…………………………………………………………………………………………….……...58
Table9: Summary of porter’s five forces………………………………………………………………………………………………………..…….60
Table10: Summary of market segmentation…………………………………………………………………………………………………..……62
Table11: summary of relationship marketing……………………………………………………………………………………………………….64
List of models
Figure1: conceptual model…………………………………………………………………………………………………………………………………….11
Figure 2: porter’s five forces ………………………………………………………………………………………………………………………………….21
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1 Introduction The objective of this chapter mainly concentrates on the importance and profitability of the
tourism industry. Later on this topic will be elaborated through a presentation and problem
discussion followed by purpose and research of this study.
1.1Background: According to Raju (2009) tourism industry is one of the most important industries around the
world, it is growing really fast and it is truly beneficial for the economy of a country. He argues
that tourism industry not only helps the economy of a country but also it helps the society,
culture and development of the host countries (Ibid). However, one of the most challenging
issues in this industry is the management of this sector. Both public and private sector must work
together hand in hand to manage the industry in a more competent way (Ibid).
According to the European Commission, a small firm is defined as having fewer than 50
employees, while a medium-sized company has up to 249 employees (European Commission,
1996). Following that definition, a SMTF is here defined as a tourism firm with up to 250
employees (including seasonal workers). However, different types of tourism firms exist.
Who is as a tourist? Raju (2009) defines a tourist as a person who is traveling on a journey and
during this period they stay in different places or destinations., but they are also 2 types of
tourists, first group: those who travel to a certain place(s) because of some time table or
professional obligations, second those who make journey to other place(s) just for visiting and
sightseeing in a country or a city for the sake of recreational and leisure aspects. But both of
these groups go and return to their homes, they stay for days or months and they come back
(Ibid).
Since tourism industry is considered as a growing business they are a lot of competitions
involved, the proper marketing and good relationship can help the challenges ( Raju , 2009).
According to Begley et al (2005) there are many criteria that must be taken in to account when a
company is aiming to commence its business in other countries. Some important environmental
dimensions that must be taken into considerations are: the countries resources, political aspects,
cultural, governmental rules and regulations, market competition (Ibid).
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Travel agencies play a central role in the marketing of travel and tourism industry. They are, by
number, the most dominant form of intermediary in the travel distribution channel (Ibid). In Iran,
the exact number of travel agencies is not easily established, but in 2010 TAAIR (the Travel
Agents Association of Iran) had 982 agency offices and allied members (Iran.se). Best estimates
indicate that TAAIR members account for 70% of sales made on behalf of travel and tourism
suppliers, processing over $400 million worth of business for the year ending 2010 (Iran.se).
1.2 Problem discussion The business environment is growing rapidly around the world; it is becoming more competitive,
more diverse and gaining market share are becoming much tougher for everyday (Theron et al
2008). Tourism and traveling industry includes many investors and stakeholders, and for that
reason competition is also becoming higher, it is considered as one of the most growing and
crucial industries around the world (Palmer and Bejou, 1995). The industry not only is
becoming big, but it is also forcing countries to build more attractive and organized cities in
order to gain people’s attention and finally make profitability, it must be added that both public
sectors and private sectors can benefit a lot from tourism and travelling (Ibid).
Palmer and Bejou (1995) strongly believe that there are many investors that are looking for
golden opportunities to make profit from tourism and traveling, collaboration between traveling
agencies or investors are a common way to start a tourism business. However they are numbers
of factors that must be taken into account when entering collaboration in truism industry, these
factors are, geographical factors, cultural, political. (Ibid).
All the above factors can have impacts on business directly and they need to be studied before
opening up a business. Traveling agencies are companies that make travel arrangement on behalf
of people; they arrange hotels, plain tickets, and taxies (Lazovik et al., 2004). According to
Bitner (1990) traveling agencies are service companies that provide tickets and arrange traveling
for different people; they support passengers with the best price and easiest way to travel with
the best options available.
According to Sweden.se (the official website for Sweden, year 2014) Sweden is considered as a
developed country with 9.6milion population, the country is very stable in economy and politics.
Also travel and tourism competitiveness reports claims that, Sweden is among the top countries
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in the world in terms of traveling, this means that the country has high standards for people to
come to and has high potential for tourists (Agndal and Elbe, 2007)
According to Bermer Hans Grunnar (Ljungby municipality), Sweden has roughly 130
independent traveling agencies and more than 400 travelling offices throughout the whole
country. In other words Sweden is being categorized as one of the highest potentials in traveling
industry. There are many international firms and companies that are active in this sector in
Sweden (ljungby.se).
Bosdets and Mattsson (1995) state that, Sweden is a very attractive place for tourism, almost
60% of the country is covered by beautiful forests and lakes, therefor travelers can enjoy
camping, hiking and a lot more; the country also has many historical buildings and old towns.
Making these traveling agencies more successful, the people in charge must fully understand the
market and pay attention to the important traveling and tourism factors of the country that was
mentioned above (culture, politics, economy, geographical location). However each nation surely
has different cultural, economic and political orientations which must be taken into
consideration. People from a country like Iran have a different history, cultural background, and
among others have their own philosophy and political point of views, comparing them to
Swedish lifestyle lots of questions like how can people from these countries can be managed
while travelling to Sweden either for business or other reasons (Farhani and Henderson, 2009).
Iran is a Muslim country located in Middle East, its economy relies mainly on oil and gas, the
country also has many tourist attractions (Ibid). According to Farhani and Henderson (2009) Iran
has high potentials when it comes to tourist attraction, because of its old civilization it has many
attractions for travelers, however when tourist visit Iran they must know about the laws of the
country and respect them. According to the Iranian Embassy (Iran.se) in Sweden, the number of
Iranian community in Sweden is roughly more than 120,000 people. This can be realized as a
good potential for any Iranian travelling agency to utilize this great opportunity on a regular
bases (Ibid). There are very few active Iranian travelling agencies in Sweden some of them are
confidently welcoming new investors to upgrade and develop their business (Ibid). The same
source has informed that the number of visas issue in 2011 where 7350 (Iranian embassy source),
most definitely a portion of Swedish traveling applicants are traveling to Iran as tourist. There
are no ideas about, how many of these travelers are being handled by/through the agencies or
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how many of them are sojourners (Iran.se). These are the lost clues for any potential investor to
pay his/her utmost attention to explore the grounds through knowledgeable and relative
authorities in both Iranian embassy in Stockholm and Swedish embassy in Tehran. Iran and
Sweden can both benefit from tourism industry; they must both adjust themselves to the situation
of their own market and try to overcome their cultural and background differences.
1.3Purpose: The purpose of this study is to explore how an Iranian traveling agency can be established in
Sweden and how it can gain profitability in the Swedish market.
1.4. Proposed research questions: The aim of this study is to identify and understand the stages that an Iranian investor must go
through in order to establish a traveling agency in Sweden, as it was mentioned earlier the two
countries have the potential in terms of tourism and traveling but they also have deferent
backgrounds, so the thesis will investigate these matters and finds solutions to these problems.
Also in the literature review it was mentioned that for a country to enter host country for
business they must fulfill certain requirements, the research questions are based on the following
model:
Figure 1: Conceptual Model
Relationship marketing
Market segmentation
Cross-cultral marketing
Foriegn market entry
Porter’s 5 forces
Swedish
market
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1.5 Research questions of the study
According to the purpose of this study and the literature review chapter the following research
questions where designed. The first question is the bases of the study; it tries to understand how
an Iranian traveling agency can get established in Sweden. However later on by investigating
through articles in the literature review chapter, it was witnessed that they are strategies and
plans that a company must go through in order to enter the host country, for instance cultural
differences , rules and regulations from these the second research question was generated. The
second question is aiming to identify the barriers to market entry and understand how the
company can deal with these hitches.
RQ1: what kind of opportunities does an Iranian traveling agency have in Sweden?
RQ2: what kind of barriers do Iranian investors have when establishing a traveling
agency in Sweden despite the cultural and background differences of the two countries?
1.6 Outline of the thesis: In order to achieve the aforementioned objectives, the thesis is divided into six chapters, each
representing a different stage in the study.
Chapter 1 provides the background and underlying logic of the research. This chapter highlights
the importance of the tourism and traveling industry the theoretical concepts utilized.
Furthermore, it provides a brief discussion of the purpose of this research. Finally, an overview
of the organization of the dissertation is provided.
.Chapter 2 provides a more in-depth review of the literature relevant to this research. The
Theoretical foundations of the study are also identified in this chapter.
Chapter 3 the research method used for the study is presented and explained along with analysis
method and quality criteria.
Chapter 4 The empirical data gathered from research are presented in this chapter.
Chapter 5 This chapter presents the analysis of the gathered data in relation to previous
academic researches.
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Chapter 6 examines the contributions made by this research. The results are discussed,
conclusions are drawn from the existing body of research, and implications of findings for
managers and academic researchers are discussed. The limitations of the present study and
Directions for future research are highlighted.
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2 Literature review
In this chapter the theoretical frame work of the chosen subject will be presented through
relevant materials, such as books, articles. The aim is to use the theories as secondary data in
order to understand the subject of the study and generate analysis and conclusion with the help
of empirical investigation.
2.1 Relationship marketing Relationship marketing is about establishing long term relationship with the customers through
network, connections, trust and commitment, it is very important for service Providers to
establish good relationship with their clients. No doubt this causes many direct and indirect
impacts on the interests and the profits of the firm (Morgan and Hunt, 1994).
According to Morgan and Hunt (1994) companies must have good trust and commitment with
one another in order to gain the best benefits from the business, it does not matter if we speak of
B2B or B2C, relationship is very important in the buyer and seller connections.
According to a research, one of the most important elements of business in Scandinavian
countries is trust and commitment, especially when we talk about Sweden (Evers et al., 2012).
This means when a company is thinking of business in Sweden they must first gain the trust of
others and be committed. Trust and commitment are key aspects in relationship marketing,
Theron et al (2007) states that , it is important for B2B companies to establish strong networks
by gaining trust and commitment it later on keeps the company safe and profitable, because at
the end everyone are looking for trust worthy partners. If a company has strong relationship
marketing it is likely that they can have better customer service and customer satisfaction,
Alveraz et al (2010) states that relationship marketing can help service companies to improve the
quality of their service and handle customer complains in a more professional way.
When companies become more close and friendly with their customers they both establish good
relationships and understand the language of one another, for instance when it comes to buying
tickets and booking flights relationship marketing strategies can hold a valuable place , since
there might be a lot of unhappy clients (Ibid).
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A research on traveling agencies in Spain has shown that increasing the quality of customer
service has direct impact on the profitability of the firm, there for it is important to consider
relationship marketing strategy in the company (Ibid).
In order for companies to get the best service quality, they must consider clients as the primary
asset not the firm’s products or services, according to Senn et al (2013) companies must know
the proper language of customers and understand them, this way customers will become more
loyal and be beneficial for the firm. Mithas et al (2005) mentions that by having quality
customer service companies can increase the value of their service; increasing value is very
essential for companies and makes customers more loyal. On the other hand Tritos et al (2010)
supports the idea of quality customer service by stating that, companies must know their
customer through relationships, they must know the clients attitude, behavior and through those
design an offer for them, all these are achievable by good customer service.
Sichtmann et al (2011) claims that it is good for service firms to adopt control theory, control
theory states that they are 2 steps that can be taken in order to maximize the performance of
customer service in a firm, the first step is to employ experienced workers and second step is to
control the way they handle clients, these stages are known as impute process and control
process. Relationship marketing theory has been selected for this project in order to help the
internal functionality of the agency after it has been established, relationship marketing can be an
excellent framework to follow in order to improve the quality of customer service on service
firms.
Service marketing is a branch in relationship marketing and it is highly relevant for the traveling
agency industry, it helps them function well internally and have high quality customer service
therefor it has been used for this thesis.
2.2 Cross-Cultural marketing
First it is better to give a clear definition of what culture is, according to Hofstede (2010) culture
can be dined as a mental program of an individual that will be shaped by the society or the group
that the personal lives in. Hofstede (2010) argues that, when a person is interacting with different
people and organization within the community they live, they automatically shape their mental
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program which later on forms their culture and behavior; culture can also be interpreted as
characteristics of the individual.
Cross-cultural marketing is a very important concept in marketing when companies are thinking
globally, it argues that companies must consider the importance of the countries cultures before
entering the market (Malhotra et al 1996). Cross-cultural marketing helps the companies to learn
about different cultures and design their strategy accordingly, as an example Coca-Cola company
uses different strategies in USA and India, in America most people drink soft drinks on every
meal but in India they mainly drink water (Ibid). In order for Coca-Cola to sell more in USA
they must encourage customers to drink more cock with each meal, for instance they can make
the containers bigger, but in India they mostly drink soft drinks in special occasions so the
strategy for Coca-Cola must be different in India, all these are to the varieties in culture between
America and India (Ibid).
Aslan (2006) states that culture of a country is so important and can be complex to understand,
he claims even for choosing the right color for a package or a suitable color for the brand of the
company ,the firm must know the perception and the mindset of people in that country. All these
are found out through understanding different cultures, for instance in the color blue in America
is considered as a cold color but in Sweden it is the opposite, the color red is considered as
negative energy in Nigerian culture but in China is one of the best colors (Ibid).
Culture also plays an important role in tourism industry, according to Chen and Gursoy (2000)
traveler’s behaviors can be affected by the countries culture, therefore people tend to investigate
before visiting a country. Traveling agencies are one of the sources that people come to when
they are planning to go to abroad . Tourists try to gain as much information as possible regarding
the countries they are visiting. This means a traveling agency must be well aware of different
cultures in order to be successful (Chen and Gursoy, 2000). Later on Chen and Gursoy (2000)
concluded that knowing cross-cultural marketing in companies like traveling agencies can help
tourism information and later on develop the business in a positive trend.
Andreas and Malte (2011) state that knowing different culture and element like, power distance,
individualism, and uncertainty avoidance can help companies to apply the right strategy for the
foreign country. According to Hofstede (2010):
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1- Individualism pertains to societies in which the ties between individuals are loose: everyone
is expected to look after him and its immediate family. Collectivism on the other hand pertains
to societies in which people are included (from birth) into strong, cohesive groups, which protect
them in exchange for unquestioning loyalty.
For the individualist is important: 1-Personal time; 2- Freedom; 3- Challenge; 4- Training; 5.
Physical conditions; 6- Use of skills.
2- Power Distance (social class, education level, and occupation) defined as the extent to which
the less powerful members of institutions and organizations within a country expect and accept
that power is distributed unequally.
3- Uncertainty Avoidance - the extent to which the members of a culture feel threatened by
uncertain or unknown situations (expressed through nervous stress and in a need for
predictability: a need for written and unwritten rules).
Cross-cultural marketing can help traveling agencies to understand and have a clear perception
of the culture of a country before entering the market; it does not matter if the company sells
services or products they must know the culture of the host’s country before getting started.
2.3 Market segmentation Market segmentation is a key marketing strategy which recognizes that not every customer wants
exactly the same product (goods or service) or in the same manner to the elements of the
marketing mix. The aim of market segmentation is to identify distinct groups of customers, their
needs and responses. Assuming the targeted groups are of viable size, this has been found to be a
profitable strategy, particularly for small businesses, rather than competing in an undifferentiated
market (Porter, 1980, Dickson and Ginter, 1987).
According to Smith (1956) consumers have variations when it comes to their demands and
needs, it is important for companies to take this mater in to consideration when planning to offer
their products or services. The industry now a day is becoming more divers, companies must
target customers according to the degree need and wants; this is made through the right
advertising and promotion (Ibid). Smith (1956) later on concluded that, success rate of a
company can be maximized by product differentiation and customer segmentations. However
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these two variables (product differentiation and customer segmentations) depend on one another,
so the company must formulate the right strategy to maximize its profit (Ibid).
Market segmentation is used in many industries; according to Dolnicar (2008) segmentation also
exists in tourism and traveling industries. Travelers are not all the same, they are heterogeneous,
meaning that they have dissimilar ideas and opinions when it comes to traveling (Ibid). Therefor
tourism firms must take this in to consideration and gain profit through the right customer
segmentation strategies.
According to Dolnicar (2008) one of the unit of operations that can benefit from segmentation in
tourism industries are the traveling agency industries . They can specialize on the needs of a
particular group and become the best in catering for this group (tourists) (Ibid).
Let’s look at some one the benefits of market segmentation in tourism industry according to
Dolnicar (2008):
1. By doing so the selected destination gains a competitive lead because (1) rivalry can be
minimized from the global market to tourism destinations specializing on the same
segment (e.g., all ecotourism destinations).
2. Efforts can be targeted on improving the quality of the products in an precise way rather
than trying to deliver all the same things to all the clients at high price (e.g., a family
destination is unlikely to need extensive nightlife options).
3. Marketing and advertisings can be focused by emerging the most effective message for
the segmented target group (e.g., a sun and fun message for young tourists traveling with
friends) and by communicating the message through the most effective communication
channel for the segment (e.g., in national geographic or other nature magazines for eco-
tourists).
4. Tourist experiencing a vacation at a destination that suits their superior needs are likely
to be more pleased with their stay and, consequently, revisit and advertise the destination
among like-minded friends.
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They are more than a few methods to segment a market for tourists, but one of the most common
methods is commonsense segmentation (Dolničar, 2004). This method is implemented in three
steps Dolnicar (2008):
Step 1: Selection of the segmentation criterion (e.g. age, gender, $ spent, country of
origin)
Step 2: Grouping respondents into segments by assigning each respondent to the
respective segment
Step 3: Profiling of segments by identifying in which personal characteristics segments
differ significantly
Step 4: Managerial assessment of the usefulness of the market segments (and formulation
of targeted marketing activities).
2.4 Porter’s 5 forces: According to Porter (1979) they are 5 forces that shape every industry, these forces will also help
the companies to know the industries weaknesses and strengths, these forces are:
1) Threat of new entrants: it is important to consider the firms who just entered the market
since they are aiming to gain access to the market share of the same industry
“companies who just entered the market and are competing for your share” (Porter,
2008, p.80).
2) Bargaining power of buyers: size of target group maters since it alters the price of a
company, in traveling companies the more demand leads to higher price (Begg and Ward
, 2009). ” there may be few buyers for the product, which could mean that they would
drive down prices and dictate business terms. What is their effect on the business? If
there are many buyers, sellers could decide not to supply to a few, because other buyers
will step in. (Porter, 2008, p. 83)”
3) Bargaining power of suppliers: the impact of suppliers can also shape the industry, for
instance contracts with other firms in traveling agencies. “What is the power of suppliers
in this industry? How will their actions affect costs, supplies and developments? If there
are a few suppliers, power is in their favor and cost of switching may be prohibitive; vice
versa for a situation with lots of suppliers. There may be too many buyers from too few
suppliers” (Porter, 2008, p. 82).
4) Rivalry among existing firms: Other competitors can also shape the competition and
impact the firm, it is important to formulate the strategy in a way to get ahead of your
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competitors. ” all the four forces may come together to produce this force. All the
resources at a company's disposal may be put in to maintain market shares and sales.
How intense is competitive action, can it be countered?” (Porter, 2008, p.85).
5) Threat of substitutes: another element that shapes the industry is the alternatives or
substitutes that are available in the market. “Can another substitute the product? Tea for
coffee; email for fax? What is the likely possibility of this and what is its impact?”
(Porter, 2008, p.84).
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2:
Figure 2: Porter’s five forces.
Adopted from (Porter, 2008, p.80)
This model is very effective to determine the market and make strategies accordingly, according
to G.D. Karagiannopoulos et al (2005) in today’s market everything is possible, this means you
cannot make predictions, everything is mainly based on assumptions but potters 5 forces can be
very big help for companies to analyze the market before they enter.
Industry competitiors
(Rivalry among existing firms )
Potential entrants
Buyer
Substitutes
Supplier
Barganing power
of supplier Threat of new
entrants
Threat of
substitute
products or
services
Barging Power of
buyer
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Heger and Rohrbeck (2012) claim that for companies to start a business from point zero, they
must conduct heavy research in order to determent the market, potters 5 forces can be a big help
when new established firms want to enter the competition . Porters (1979) came with the idea in
year 1979, during his research he found that it is important for any company to do the right
amount of research in the proper pattern before entering the market. The method has been used
today in many industries such as, airline, automobile, telecommunications (porters, 2008).
It is good to mentioned that potters 5 forces have been used in automobile industries in Iran, so
they are well aware of this concept, according to MalekShirabadi et al (2013) argues that Iran
khodro the biggest car making company in Iran has been using this method and getting results.
Porters 5 forces are used in this thesis to help the traveling agency in analyzing the market before
starting its business.
2.5 Foreign market entry Market entry is a very broad and important concept in marketing; it highlights the importance of
doing the right planning before entering a market, for instance researching on the product or
good you want to sell , number of competitors, selecting the right strategy and all the
requirements needed to enter a foreign market(Ofek and Turut , 2008).
It is important for a company to plan the right strategy when entering a foreign market,
sometimes it is really complicated to come up with the suitable strategy for the market (Agarwal
and Ramaswami, 1991). According to Agarwal and Ramaswami (1991) they are 4 common ways
to enter a foreign market, exporting, licensing, joint venture and solo venture. It is good to
mention that, they are 3 elements that a firm must take in to consideration when entering a
foreign market; ownership advantages of a firm, local advantages of a market and lastly
internationalization advantages of integrating transactions with in the company (Ibid).
They a lot of risks involved when entering a market, it is important that the company makes sure
the profit is higher than the risks, exporting has the lowest risk while solo venture has the highest
risk when considering an investment,(Ibid). Buckley and Casson (1998) states that, in order for a
company to enter international market they must also consider the cultural deference’s, the firm
must learn about the culture of the country and try to adjust to the cultural dimensions of the
place. Buckley and Casson (1998) suggest that, it is good to know about the rules, regulations,
political situation and level of commitment between companies of the country before entry.
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Erramilli and Rao (1993) suggest that a company must solve the cultural distance before
thinking of investing in another company, especially if the company is a service company.
Erramilli and Rao (1993) also believe that the situation of the country in terms of risks and
stability is crucial; firms must know the situation of the country they want to invest in and know
all the risks.
According to ikeledo and Sivakumar (1999) they are external and internal environmental factors
that must be taken in to account by a service firm before entering the market, the internal factors
are company oriented factors, such as goals, objectives, weaknesses and strength of the firm.
The external environmental factors are the factors that the host country must secure for the
investor in order to have a good business, things like rules regulations , policies , economy
situation of the country(Ibid)
Wiegand (1991) also stresses the importance of legal environment by stating that, no matter what
goods or services the company sells, the legal environment has direct impact on the profitability
of the firm. For instance when a company is aiming to work in EU they must know about all the
rules concerning labor force and company establishments, EU countries highly respect workers
and they are very high standard when it comes to wages, which means companies must pay more
to the workers, also the taxation system must be considered since the taxes are high in Europe
(Ibid ).
By reviewing different articles it is clear that for companies to enter foreign market and plan
things right, they must know the host country, in terms of culture, economy, rules and
regulations and market potential.
Foreign market entry has been reviewed since it is highly relevant for the case of study (traveling
agency) it helps the company to make strategy in the proper framework before entering into the
international markets.
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3 Methodology
This chapter provides information on different research methods that can be used in academic
researches; also the chosen research method for the thesis will be presented to the readers. Also
the reason for choosing qualitative research approach will be justified. Later on it will be shown
how concepts can be converted into variables in order to analyze the investigation.
3.1 Research approach: According to Bryman and bell (2011) research approach is about the path or way that the
researcher plans to solve the research problem academically. Research approaches must be used
in order to meet the purpose of this study (Ibid).
3.1.1 Inductive versus deductive research approach
Inductive and deductive approaches in research with different perspectives, according to
Saunders et al (2007) inductive research is where the base of the study is on empirical data and
the results are new theories, on the other hand deductive approach is when the research employs
existing theories and gathers empirical materials based on those theories.
Here are some of the characteristics of each approach according to Saunders et al (2007):
Table 1: Deductive vs Inductive
Deductive : Inductive:
Scientific principles
Meanings of humans actions
From theory to data
Understanding of research context
Explain relations
Collect qualitative data
Collect quantitative data
Flexible research structure
Operationalization of concepts The researcher as one part of the research
Generalization to conclusion less concern with generalization
Source: (Saunders et al. 2007)
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Most of the qualitative researchers use inductive approach but it is also possible to use
qualitative research method with deductive approach (Saunders et al. 2007). In this study the
selected method for gather primary data is qualitative research method, however the study is
based on scientific theories which means the deductive tactic must be selected. Theories are used
in order to help the author to understand the topic of the study and later on help with the primary
data gathering.
3.1.2 qualitative versus quantitative research method
According to Bryman and Bell (2011) it is confusing for researchers to choose between
qualitative research and quantitative.
The difference between qualitative and quantitative approach relies primarily on the depth of the
study and empirical data materials (Ibid). Before going into these concepts in detail (qualitative
and quantitative) it is good to define what scientific research method is, according to Johnson
and Christensen (2012) a scientific research is when the problem is well defined, relevant
materials are gathered and hypothesis is generated from these data which is then empirically
tested.
According to Saunders et al (2007) qualitative data is known for its rich ness and depth of data
collection it allows the researcher to explore the problem in more detail and find new subjects.
Quantitative research on the other hand is less in depth and more general findings but the data
are results of huge empirical or large unit numbers (Ibid). Quantitative research approach is
aiming to get large number of empirical data through interviews and surveys, this means that few
number of variables are studied but on a large number of entails so large number of respondents
but less variables (Oghazi et al. 2012; Bryman and Bell 2011). This means that the quantitative
method is mainly focusing on surveys and questioners that have been taken out from a sample in
a population that eventually leads to statistical analysis (Ibid).
Quantitative research is a very good approach for those who are aiming to draw graphs and
charts for their empirical investigations since large participants answer questions and it has
statistical roots (Oghazi et al. 2012; Bryman and Bell 2011). According to Johnson and
Christensen (2012) qualitative research is aiming to collect non numerical data such as words
and pictures. This approach is conducted when the researcher is focusing on what is seen, also
this approach is very useful when the researcher knows little about the topic of investigation and
wants to know more (Ibid).
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Qualitative method is well known for its richness and depth in data collection, Robson (2002)
claims that it is mainly through qualitative study that the researcher can find new subjects. A
positive character of qualitative research is the ability to monitor the respondent behavior and
body language so there for the conclusion is not generalized like quantitative study, According to
Johnson and Christensen (2012) in qualitative approach, human behavior is sighted as being
fluid, dynamic and changing overtime span and place and most often does not generalize beyond
the particular people who are studied.
To finalize, it can be concluded that, quantitative approach works with numbers and statistics
while on the other side qualitative research deals with terms and words. The main reason for a
quantitative study is to get defined characteristics whilst the purpose for qualitative is to get a
meaning (Ibid).
For this study the qualitative research method has been chosen, since it is more suitable for the
study. A reason for this is restriction of accessing large number of companies and organizations.
The number of Iranian traveling agencies are very limited in Sweden therefor it is hard to
interview large numbers.
3.2 Research design According to Saunders et al (2007) research design is the process of planning that the researcher
composes in order to answer the research questions of the paper. Even though they are several
types of research purposes, only three categories are commonly used ones in the literature of
research method, these 3 are categorized as : exploratory, descriptive and explanatory(Ibid).
Exploratory study: “is a valuable means of finding out ‘what is happening; to seek new Insights,
in order to ask questions and to assess phenomena in a new light”. (Robson, 2002, p. 59).
According to Saunders et al (2007, p. 132) this approach is useful when the researcher is aiming
to solve its understanding of the problem in other words it clarifies the problem and makes it
more understandable.
Saunders et al (2007, p.132) claims that, they are three principles in exploratory study:
1) Searching through literature.
2) Interviewing experts on the topic of investigation.
3) Conducting focus groups.
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Descriptive study: The aim of descriptive research is “to portray an accurate profile of persons,
events or Situations” (Robson, 2002, p. 59). The researcher in this case must have a clear picture
of the study phenomena before the collection of information, in other words the problem is well
structured (Saunders et al 2007, p.134).
According to Churchill and Iacobucci (2006) descriptive study is particularly suitable when the
reason for a study is to explain the characteristics of certain groups, or estimate the quantity of
people in a specific population with similar characteristics, or even to make certain Predictions.
Explanatory research: the approach of this study is to give information regarding the
relationship between the variables of the research (Oghazi et al. 2009; Saunders et al. 2007). The
aim is to study a situation or a problem in order to generate the relationship between the
variables (Ibid).
Reynolds (1971) claims that the focus of explanatory study is to develop theory that could be
later on used to clarify the empirical findings process in the descriptive stage.
Also Yin (1994) states that , the goal of an explanatory approach should be to develop
competing Explanations for an equivalent set of events, and to designate how these explanations
could be applied to other situations.
This research is focusing on traveling agencies and it’s aiming to understand the procedures of
starting up an Iranian traveling agency in Sweden, so the author will monitor and analyze the
activities of several traveling agencies Thus, it mainly focuses on observing and analyzing the
organizational activities, behavior and intentions. Hence, descriptive and explanatory research
design is the most suitable form of study for this research. Since the research questions are based
on what and how descriptive and exploratory are the best matches for this study.
3.3 Data sources They are 2 types of empirical research data that are used for research, primary and secondary
data sources (Oghazi, 2013; Saunders et al. 2007). Primary data sources are the materials that are
gathered for the purpose of solving a problem; it is generated through questions designed for
answering to the problem (Ibid). Primary data is specific and up to date but it can be costly and
sometimes hard to access for the researcher (Oghazi, 2014; Cowton, 1998).
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Secondary data sources are data that have been collected for other purposes; they don’t apply
directly to the main problem of the research (Oghazi 2009; Saunders et al. 2007). Secondary
data are often used to complement primary data sources, according to Bryman and bell (2011)
the sources of secondary data are existing literatures and data bases and if there is sufficient
material it can some time solve the actual problem of the research. Secondary data sources are
easy to access and cost efficient for the researcher (Ibid)
According to Stewart (1984) even though primary and secondary data sources are totally
deferent, they can supplement with one another in other to solve the problem of the research.
For the purpose of this study primary data sources are the most applicable in order to analyze and
give solution to the actual problem. However secondary data has also been used in order to give
more clear understanding of the topic through literature review, this approach also helps the
primary data collections for this study.
3.4 Research strategy
Research strategy are ways of collecting and analyzing empirical data., according to Yin (2007)
they are several ways or strategies to consider when conducting a research, these strategies can
be categorized as, experiment , survey , archival analysis , history and case study. The
researcher must choose between these categories, depending on the condition of the research
(Ibid)
According to Yin (2007) researcher can choose the suitable strategy by considering 3 conditions:
1) Type of research questions that are posed.
2) Require of control of behavioral events.
3) Focus on contemporary events.
Table 2 bellow illustrates these three conditions and their relations with the research strategies
Table 2: Research strategies
Methods Conditions
Types of research Require of control of Focus on contemporary
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questions posed behavioral events events
Experiment How , why Yes Yes
survey Who, What, Where,
How many, How
much?
No No
Archival analysis Who, What, Where, How
many, How much?
No Yes / No
History How, why? No No
Case study How, why? No Yes
(Yin, 2007, p. 22)
Experiment: According to Zikmund et al (2009) experiment in research helps with finding
causal relationship between the variables. Saunders et al (2003) claims that this type of study is
complex and could be costly for the researchers, experiment is normally used in explanatory and
exploratory research.
Survey: this approach allows the researcher to collect large number of quantitative data from a
sample with in a large population which is also very cost efficient, also for analyzing these data
descriptive research applies the most (Ibid). it is also good to mention that survey approach is the
most comment strategy is business research (Oghazi, 2009).
Archival analysis: in this method the researcher uses administrative records of the study subject;
these documents are historical records as well as up-to-date records (Ibid).
Historical analysis: according to Bryman and bell (2011) this approach is appropriate when the
aim of the researcher is to trace the history of the organization or the industry through relevant
documents.
Case study: Saunders et al (2003) states that, case study is used when the researcher is
investigating through real phenomena and cases , they must have multiple sources of data for this
approach , in simple words cases are events or things that has happened for a company or
organization already and the researcher investigates through them. This approach can be used
both in explanatory and exploratory research (Ibid)
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Case studies are divided in to single case study or a multiple case study. A single case study is
akin to a single investigation and a multiple case study mainly concentrates on a number of cases
(Yin, 2009). In circumstance of single case study, the chosen case should be exceptional in
relation to established theory, or for any reason extremely unique and can reveal some special
notions. A multiple case study is preferred based on the aim of resulting in robust research
outcomes (Rowley, 2002; Silverman, 2010). Thus, the authors aim for conducting a multiple case
study. The cases should be selected with the prospect that they produce similar results (literal
replication) or produce contrasting results on predictable reasons (theoretical replication) (ibid).
In this case the author is aiming to interview three Iranian traveling agencies in Sweden; therefor
multiple case studies are suitable for this investigation.
3.5 Data collection method According to Bryman and bell (2011) they are several methods for collecting primary data
sources, but they are 3 categories that are most common in research, focus groups, in depth
interviews and surveys. The researcher must choose the category that matches its research
method, for instance if the research method of a researcher is quantitative then surveys are the
best choice, but if the research method is a qualitative approach then in depth interviews and
focus groups are the best alternatives (Mostaghel et al. 2012; Shah et al. 2010).
As it was mentioned earlier the chosen method of investigation for this study is qualitative
method so the focus will be mainly on focus groups and in depth interviews , this means in this
chapter will defines only this 2 categories since they are the most relevant(surveys are not
explained).
Focus groups: according to Johnson & Christensen (2012) focus groups are groups of
participants normally between 6 to 12 that are asked questions or will be given a topic of
discussion, the questions are asked by the researcher (or a representative) in order to generate
data for the problem of the research also the participants are chosen by the researcher from a
chosen population of interest. The person who is leading the focus group (the moderator or the
researcher) must pay attention so that everyone are participating on the debate, also the
discussion is not of topic, it is essential for everyone to share their thoughts and ideas (Krueger &
Casey, 2009; Oghazi & Österberg 2003). According to Bryman and bell (2011) they are several
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ways to choose participants for a focus group , one way is to choose people from the same
category of profession such as students or workers from the same company or choosing people
that are unknown to one another to avoid session contamination by pre-existing style of
interaction or differences in status.
Interviews: Bryman and bell (2011) claim that interviews are the most typical way of gaining
primary data sources in qualitative research method. A positive side of this approach is the
flexibility aspect which makes it attractive for the researcher (Ibid). Because of its flexibility the
researcher can clearly get to the answer (Ibid). According to Ghauri & Gronhaug (2010)
interviews can be defined as data collection method where the interviewer asks questions at the
interviewee to find relevant answers for the research. Personal interviews are the ones that are
done face to face, while telephone interviews are made through phone calls (Johnson &
Christensen, 2012).
According to Johnson & Christensen (2012) they are some points that must be taken into account
during an interview:
1) It is critical to deliberate that throughout an interview process, the interviewer remains
unbiased to whatever the interviewee utters because the former may bias the responses if
he/she responds positively or negatively to the content of the latter’s statement.
2) Bias documents can also be brought about if the interviewee does not trust the
interviewer.
3) Procedures to establish trust include a clarification of why you are conducting the study,
the organization sponsoring the research and telling the interviewee that his/her responses
will either be anonymous or confidential” (Ibid).
According to Bryman and Bell (2011), there are three types of method that is commonly used
when conducting an interview, these are the methods most researches are based on and they are
listed as follows:-
The unstructured or in depth interview: which is conducted without a list of questions, is led by the
researcher whereby he/she decides in this case what questions to bring up depending on topics and
opinions that have been brought up by the interviewee. The disadvantages are that the interviewer may
forget some important parts to ask during the interview in the sense that he or she does not have lists of
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questions to follow but the advantage is that interviewer may come up with questions that hasn’t been
thought of before (Bryman and Bell, 2007).
The semi-structured interview: is little more structured compared to the unstructured interview
and there is a little less freedom to talk about topic. In this type of interview, the interviewer has
a list of questions to follow but there’s no need for him or her to follow every question perfectly.
The advantage here is that the interviewer will not forget questions since he or she has the list to
follow and in addition, he or she can easily ask follow up questions that haven’t been thought of
because the interview is semi-structured. The disadvantage is that people can get off topic, the
same goes for unstructured interview (Bryman and Bell, 2007).
The structured interview: when conducting this type of interview structure, the interviewer is
not allowed to ask anything else but rather ask what is written on his or her list. This technique is
highly structured compared to unstructured interview and there is no chance of getting off topic
once it has started. The disadvantage is for the same when it comes to semi-structured, that there
is no chance in getting off topic. The disadvantage is that you must follow the questions on the
paper no matter what the outcome of the interview might be (Bryman and Bell, 2007).
Since this study is based on a qualitative approach, it is important to have deep understanding of
the topic of investigation. According to Granot et al (2012) qualitative approach is mainly known
for the fact that it underlines and identifies the problem and gives a better understanding of the
process of investigation.
For the sake of this study semi-structured interview questionnaire has been chosen, the method
of interview that has been chosen for this case is telephone interview. The interviews will be
conducted with three Iranian traveling agencies. The reason for choosing semi-structured
interview is to access as much information as possible, to solve misunderstanding by rephrasing
the questions in order to get accurate answers. Telephone interview has been used because is
easier and more economical for the author to access the traveling agencies.
3.6. Data collection instrument In this chapter the author will define the concept of operationalization and measurement of variables,
interview design and pretest in order to secure validity.
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3.6.1 Operationalization and measurement of variable According to Bryman and Bell (2011) operationalization can be defined as, stages of clearing theoretical
frame work of the study in order to make the concepts measureable for the research. For a concept to be
measureable the researcher must first be able to connect the theories to the real world (Hultman et al.
2008; Schensul & LeCompte, 1999). According to Melcher (2012) operationalization connects
mental notion to quantifiable measures in real life. The first stage of operationalization is
identifying key concepts and the connections they have with one another, this concept is known
as theoretical insight (Ibid). After all these are done the next stage is to give a clear definition of
each concept in a table and give the readers clarity over the measurement of theory concepts, in
the last stage it is important to do pretest before any data collection (Bryman and Bell 2011). In
simple words the theory concepts will create questions in order to help the researcher collect
primary data that will later on be analyzed.
According to Bryman and Bell (2011) pretest is the stage where the researcher has made
interview questions out of the theories and ask an (or several experts) academic experts to check
the questions for errors, the errors could be language problems or academic problems. It is
crucial for the researcher to describe the instruments of data collections as well; this process is
made in the last stage of operationalization, this process varies depending on the methodology
path that has been chosen by the researcher (Ibid). If the researcher has chosen qualitative
approach a chapter must be dedicated to interview guide and design of interview questions
(Ibid).
According to the literature review chapter of the study (in chapter 2) four theories has been used
for this inquiry therefor the following table has been designed for this study (table 2).
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Table 3: Operationalization:
Concept Concept definition Operational
definition
Measurement
Porter 5 forces They are five forces that
shape every industry these
are : threat of substitute,
threat of entry, bargaining
power of buyer, bargaining
power of supplier and
rivalry among existing firms
(Porter , 1979).
The measure is to
scrutinize the market
and make the accurate
strategy. How can
Iranian travel agencies
enter the market.
5 competitive forces (Porter ,
1979)
(Questions: 1,,4,5,6)
5 forces and market
strategy(Karagiannopoulos et
al 2005)
(Question 1)
Analyzing market before
entry with 5 forces(Heger and
Rohrbeck 2012)
(Question: 1)
5 forces in industry
(MalekShirabadi et al 2013)
(Question: 3)
Foreign
market entry
It highlights the importance
of doing the right planning
before entering a market, for
instance researching on the
product or good you want to
sell , number of
competitors, selecting the
right strategy and all the
requirements needed to
enter a foreign market(Ofek
and Turut , 2008)
The relation is to learn
how a traveling
agency can enter a
host country, in this
case how can Iranian
traveling agency
adopt to Swedish
market.
Foreign Market entry (Ofek
and Turut , 2008).
(Question:.1)
Entry strategy in foreign
market (Question: 2, 19,)
(Agarwal and Ramaswami,
1991)Cultural differences and
(Question: 7,)
foreign market entry(Buckley
and Casson 1998)
(Question: 2, )
solving Cultural distance in
service firms(Erramilli and
Rao 1993) (Question : 8)
external and internal factors
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Foreign
market entry
of market entry (ikeledo and
Sivakumar 1999)
(Wiegand 1991)
(Question: 12)
Cross-cultural
marketing
It argues that companies
must consider the
importance of the countries
cultures before entering the
market (Malhotra et al
1996).
It measures the
cultural differences
between the two
countries and how to
adapt to these
differences. How can
Iranian traveling
agency manage to
solve the cultural
differences?
Culture (Hofstede, 2010)
International cultures
(Question: 8)
(Malhotra et al 1996).
Culture in business(Aslan
2006)
(Question:11 )
Culture and traveling
behavior(Chen and Gursoy,
2000)
(Question:10 )
Cultural strategies in foreign
markets(Andreas and Malte
2011)
(Question: 11,7,9)
Relationship
marketing
Relationship marketing is
about establishing long term
relationship with the
customers through network,
connections, trust and
commitment, it is very
important for service Providers
to establish good relationship
with their clients. No doubt
this causes many direct and
The measure is to
improve the customer
service and quality
service of the
traveling agency.
(Morgan and Hunt, 1994).
Relationship marketing
(Question: 12)
(Evers et al 2012)
Trust and commitment in
Sweden
(Question: 13)
(Theron et al 2007)
Strong networking in B2B
(Question: 14)
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Relationship
marketing
indirect impacts on the
interests and the profits of the
firm (Morgan and Hunt, 1994).
(Alveraz et al 2010)
RM and service quality
(Question: 15)
(Senn et al 2013)
Language of customers and
customer service
(Question: 16)
(Mithas et al 2005)
Customer service and value
(Question:18 )
(Tritos et al 2010)
Customers attitude and
behavior
(Question:16 )
(Sichtmann et al 2011)
Control theory
(Question: 17)
Market
segmentation
Market segmentation is a key
marketing strategy which
recognizes that not every
customer wants exactly the
same product (goods or
service) or in the same manner
to the elements of the
marketing mix(Dickson and
Ginter, 1987).
The measure is to
know how the
traveling agencies
segment their target
group and what
strategy do they use.
Dickson and Ginter (1987)
Market segmentation
(Question: 20)
Smith (1956)
Market demand and
segmentation
(Question: 21)
Dolnicare (2008)
Tourism market segmentation
(Question: 21, 22,23)
(Dolničar, 2004)
commonsense segmentation
(Question:21 , 22 )
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3.6.2 Interview guide design
The table (table 4) below illustrates the connections between the interview questions and the
theoretical references, in other words the questions that will be asked during interviews to collect
primary data. This process is made in order to secure the reliability of this study; it also shows
that the questions have been used in other scientific articles.
Table 4: interview questions
Theory Questions :
Porters five forces: 1. How does your company formulate the right strategy to enter the market?
3- How does your company compete with the other similar firms in the industry?
4. How do you compete with the rivals in the industry? How about new rivals?
5. (Bargaining power of buyer) How big is your target group? Are they limited or
not? Does it alter the prices?
6. (Bargaining power of supplier) what is the power of suppliers(companies you
have contract with ) in this industry? How will their actions affect costs,
supplies and developments?
Foreign market
entry
2. What is your entry strategy? What criteria’s do you measure
before entering a foreign market?
19. What opportunities and barriers do you have in Sweden?
7. Does culture of the country you enter impact your strategy?
9. How do you solve the cultural barriers?
12. How does a countries rules and regulations, political and
economic status alter your strategy making?
Cross-cultural
marketing
8. How does culture affect the performance of your company?
10. Do you think travelers with deferent cultural background have
deferent behaviors and expectations from the traveling?
11. Does your company follow any cultural strategies in every
country they enter?
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Relationship
marketing
12. Do you think good relationship with clients, stakeholders and
companies you work with can Improve your business?
13. What is the role of commitment and trust in your firm?
14. Does having a good network and relationship with other
companies increase profitability in the long run? How?
15. Does high quality customer service increase the value of the firm?
16. Do you think Is important to know how to speak with each client
(the language of customers)?
17. How do you select the employees who interact with clients?
18. Does high quality customer service give competitive advantage?
Market
segmentation
20. What is your main target group?
21. How do you segment your market?
22. Can customer segmentation help your traveling agency?
23. Do you have any Swedish travelers or tourist going to Iran? how
is the rate ?
3.6.3 Pretest
Before collecting the primary data it is essential for the researcher to have its work reviewed by
experts in the area of the study, this process is also known as expert-review stage (Philipson &
Oghazi, 2013; Bailey, 2007).
According to Yin (2009) the main objective of pretest is to get feedbacks and comments from
other researchers regarding the interview questions, expert will look at the interview guide
design and give feedback regarding the language, clarity of the question and other criteria’s so
that the interviewees understand the questions more evidently.
The pretest was done made through tow experts (Professors and Linnaeus) at Linnaeus
University and one PhD student at Linkoping University plus two students.
3.7. Sample collection According to Bryman and Bell (2011) sampling is the process where the researcher chooses
representatives from a population in order to get its empirical data from; the sample is the source
of the primary data. In order for a researcher to choose a sample he/she must consider 3 steps,
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definition of the sample population, presentation of the sample frame and decision about the
sample size. When talking about sampling it is important to know 3 impotent characteristics of it,
these are sample population, frame and size. Sample population is defined as all units that belong
to a specific group from a specific geographical zone (Ibid). Sample frame is about the type of
population that the sample has been selected from and finally sample size is about the number of
units that participate in the research or study (Ibid).
They are 2 types of samples that a researcher must be familiar with before conducting the study,
these are probability sample and non-probability sampling (Ibid). According to Robinson (2007)
a non-probability sampling is used when the research is made in small scales and it is hard to
access participants. According to Saunders et al (2007) non-probability and probability samples
have the following definitions:
Probability sample: the chance or the probability of each case being selected from the population
is known and is usually equal for all cases.
Non-probability sample: the probability of each case being selected from the total population is
not known and it is impossible to answer research questions that require you to make statistical
inferences (generalizations) about the characteristics of the population.
According to Gray (2009) normally in a qualitative approach a non-probability sampling will be
ideal since the choices are less divers and it seeks to go more in depth, so therefore a non-
probable sampling approach has been chosen for this case.
The sample population in this study are, all the traveling agencies in Sweden, the sample frame
are all the Iranian travelling agencies in Sweden and lastly the sample size are between 2 to 4
Iranian traveling agencies in Sweden.
The sampling method used for this study is snow ball sampling; snow ball sampling is a root in
non-probability sampling technique (Beheshti et al. 2014; Saunders et al 2007). In this path the
samples are identified through other samples, this means that the researcher identifies other
samples by communicating with the other participants (Ibid). After observing the initial subject,
the researcher asks for assistance from the subject to help identify people with a similar trait of
interest(Ibid).
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The snow ball sampling will be based on three Iranian traveling agencies in Sweden, it must be
mentioned that because of competition reasons, the agencies like to remain unknown.
3.8. Data analysis
Data analysis can be very complex in qualitative methodology since this approach predominantly
concentrations on gathering considerable data (Savage, 2000).
According to Hancock et al (2009) qualitative method analysis comprises understanding and
communicating massive amount of collected data and presenting its most important features.
They are three ways to analyze qualitative data these are data Reduction, Data Display and
Conclusion Drawing (Miles & Huberman, 1994).
Data Reduction: This stage comprises selecting, simplifying, abstracting and converting data
in order to organize data in a way that the final conclusion can be drawn straightforwardly
(Miles & Huberman, 1994).
Data Display: The process of offering the data in a well-organized and basic assembly.
Besides using only text, it has been suggested to also employ charts, graphs and matrices
(Ibid).
Conclusion Drawing: The process of finding patterns and flows in collected data and
demonstrate what they really mean (Ibid).
This study is a multiple case study and this condition enhances the chance and likelihood for
generalization and deeper understanding regarding the chosen purpose and topic of the
investigation (Miles and Huberman 1994).
There are three reasons for choosing these approaches as an analysis path for this study:
1) All the primary and secondary data have been transcribed precisely.
2) The collected data where concentrated and labeled according to the theoretical construct.
These processes were made by operationalization table which illustrates the connections
between the data and related theories.
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3) The relation between the labeled data and the theory was exposed in a text setup.Miles
and Huberman (1994) also believe that summarizing empirical data and relevant theories
in a table is more complete and understandable.
3.9 Quality criteria
According to Bryman and Bell (2011) when conducting a research it is vital to secure the
rigorousness of the study, this is made through validity and reliability.
Validity is targeting to comprehend that, the study investigates what it has to investigate while
reliability refers to the degree of consistency of measurement instrument (Ibid). If the outcomes
of a research can be reproduced below a similar methodology, then the research instrument is
considered to be reliable (Ibid).
3.9.1 Content validity According to Saunders et al (2007) content validity also known as face validity refers to the
concept of how the measures which are used in the study actually measure what is needed to be
measured. A person with enough information about the topic can help secure the content validity
of the research, in other words experts will review the interview guide and help the researcher to
protect the standard of the face validity (Ibid).
Operationalization and interview guide design has been sent to Linnaeus university experts to
secure the content validity.
3.9.2 Construct validity
According to Ghauri and Grønhaug (2005) is about how accurate the operationalization is
measuring the concept that it has to measure. The construct validity is made by pretesting and
expert comments (Ibid)
Construct validity of this study was made by two teachers at Linnaeus University and a Phd
student at Linkoping; this means that the operationalization meets the academic standards.
3.9.3 External validity
According to Bryman and Bell (2011) external validity refers to the extent to which finding can
be generalized across a different context within the population. It must be mentioned that the aim
of qualitative study is not generalization since it aims to describe rich empirical to a certain
group of people or a certain event in an exact context rather than to generate findings that a
generally applicable (Johnson & Christensen. 2012).
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In this study the findings will hand over to an Iranian traveling agency that is in the process of
entering Sweden, it can be used to help the stockholders with formatting the right strategy.
3.9.4 Reliability
Riege, (2003) defines reliability as when the research gets the same outcomes or results if it was
made by another researcher through the same procedures. Qualitative research depends on expert
comments and participations, this means that in every stage the researcher will get comments and
feedbacks from the experts in the area of the study to make sure all the stages are credible (Ibid).
They are steps that can be taking in order to secure the reliability, according to Mitchell, (1993)
the researcher can give full account of theories and ideas of each phase to other experts ,
conducting several pilot studies to the strategy of questioning, also recording the empirical data
on video or other methods(Lincoln & Guba, 1985).
It must be stated that the methodology section of this study has judiciously clarified all the
procedures of the research therefor it can make it easy for other researchers in the same area of
study to repeat every stage and secure the reliability of the study. In addition, a copy of the
interview guide has also been provided in the appendix section of this research.
3.10 chapter summary
It this part a summary of the methodology chapter has been made and it will be illustrated in
Table 5: methodology summary
Research methodology
Research approach
Qualitative /Deductive
Research design
Descriptive
Data sources
Primary
Research strategy
Multiple case study
Data collection method
Interviews
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Data collection instrument
Semi-structured interviews
Sampling
Multiple case sampling (3 Iranian traveling
agencies )
Data analysis method
Data reduction, Data display, Pattern matching
and conclusion drawing
Quality criteria Validity and reliability
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4. Imperial investigation:
In this chapter, empirical data collected from the three cases are presented.. Each company is briefly
introduced and the gathered data is presented in accordance with the study’s theoretical concepts;
Relationship marketing, foreign market entry, cross-cultural marketing, porters five forces and market
segmentation.
Table 6 illustrates all the Iranian traveling agencies that have been interviewed for the study; the table
displays information concerning each agency. The information is about the experience of the agency,
number of employees, location and number of interviews.
Table 6: company specifications
Information Case A Case B Case C
Number of interviews 2 1 1
Experience 20 years 10 years 7 years
Employees 15 10 17
4.1 Case A Case A is an Iranian traveling agency located in Stockholm with more than 20 years of
experience in the market; according to the Iranian embassy, this agency is the biggest agency in
terms of variety of offers and services in Sweden. Interviews were conducted with tow of the
owners of the traveling agency. The company is mainly focusing on tickets and has contracts
with different airlines; however it will also give consultation regarding accommodation and other
matters to the travelers.
Foreign market entry
It is important for companies to know the country they are planning to do business in; they are
several criteria’s that must be studied before getting in the country. Rules and regulation
regarding companies, taxation systems and labor forces are some of the important factors that
must be studied according to the manager of Case A. It is also crucial to know about the market
situation of the country. Does it have the right potential? Is it profitable? Are they any risks
involved with the investment? Since the owner of the traveling agency was a citizen of Sweden
before establishing the traveling agency it was easier to enter the market, of course he has been
living in Iran for a long time and he well knows the Iranian culture and behavior of travelers. It
was mentioned that, it can be a huge advantage for someone who has lived in both Sweden and
Iran before entering Swedish industry. Sweden is a bit tricky to get used to at first , so when you
have lived in the country for some time you will understand the rules and regulations , how to
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communicate with people and also understand the culture of the country. For instance rules
about the insurance and the banking system in Sweden are really complicated and it must be
understood well, before doing any business. The company must also have the knowledge
regarding airline companies and hotels and know how to sign contracts with them.
Before establishing agency A (Case A) the manager knew about the rules and regulation of both
Iran and Sweden, the number of competitors and strategies of offering and advertising. At the
beginning of the business the firm started advertising on Radio channels and magazines and after
a while they got the trust of the target group that they were aiming at and finally got in the
market.
Cross-cultural marketing
According to the interviewee, culture plays a very important role in business, especially if the
aim is to work in other countries. It’s a must to know about people’s culture in order to formulate
the right strategy and also talk with the proper language to the customers. Most the people who
work at the agency (Case A) have both Swedish and Iranian background; the reason for this is
because they can understand the clients and their needs. For instance when an Iranian client want
to travel to Iran for the Persian New Year, the person who sells traveling services to them must
also know about the events that are taken place in that moment in Iran, so that they can give the
travelers better consultation. Also when a Swedish person want to travel to Iran, knowing
Swedish culture can help employee to understand what the Swedish person is looking for in Iran
and make the trip more fun.
In order to solve the cultural barriers between Iran and Sweden the firm must have employees
who have lived in both countries or at least know about the culture of the two countries.
Porters 5 forces
20 years ago when the company was established they were less than 5 traveling agencies, so the
number of competitors was not that much but it still did impact the firm. It was important to
know the rivals and how they do business, it is also good to know the attitude they have in order
to understand how to work with them. The interviewee also stated that, if the rivals are friendly
and trustworthy they can help one another but the Iranian traveling agencies are not in a position
to work with one another. So as a result, case A focused on its self alone and planned to improve
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the customer service and loyalty to access the market and gain customers. Also the country has
very high standards in IT and internet; this can help the agencies to improve the quality of
customer service.
They are of course new traveling agencies getting started in Sweden but this does not alter the
business for Case A, because they already have the customers they wanted and their market share
is great. The main target group for Case A is the Iranian community in Sweden and the number
of Iranians living in Sweden is more than 120000, also a large number of this population is in
Stockholm and they know about the company. The price of the offers will of course change with
the number of demands, sometime the demand is large and offers are limited and sometimes the
opposite.
The companies that Case A work with are mainly traveling agencies and sometimes hotels, at the
beginning it was hard to get access to these firms and have contracts with them, but after some
research and negotiations the firm signed contract with several airline companies. The airline
companies have direct impact on the prices of the offers, so it is crucial to know what season to
book and what strategies to use.
Market segmentation
The company is mainly focusing on a specific segment of customers; these are mainly the
Iranian community in Sweden. The main clients of the agency are from the Iranian community,
so the firm is promoting the offers mainly to these groups. There are of course Swedish clients
that travel to Iran but the rate is not that significant , most of the Swedish travelers are going to
Iran because of business purposes and they get connected to the agency from Iranian embassy in
Stockholm.
It is easy to know your target group, the benefit is you won’t get distracted and you focus on that
particular population.
Relationship marketing
According to the interviewee, relationship has a high value in traveling industry, strong
relationship with both clients and other companies who work with the agency are beneficial. The
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agency works with different companies and establishing a good relationship will help to speed
things up and also gain trust and loyalty.
Trust and loyalty is very important and it is only gained through good network and relationship.
Communicating with the proper language can also help this process. The agency has established
good relationships with several airline companies and governmental organizations. According to
the interviewee Sweden has a very transparent regulation system and the country is based on
honesty and trust, in order to have good relationship with companies you must show them that
they can trust your agency and this is done through time and the proper negotiations. Trust and
commitment leads to long term business for a company in Sweden, once they know who you are
they will accept to do business with you.
According to the interviewee, customer service is the most important element in a service
company; it must be done with the right employees and proper management system. The person
who interacts with clients must have the right training and the proper work experience, the
agency has five people who work directly with customers and they are all experienced workers
in this area. They are well trained and know Swedish and Persian language. Customer service
can increase and alter the profitability of the company directly , once the client has a good
experience with the agency they will come back again , they will also share their experience with
others and the agency will get even more clients. Good customer service will also give a
competitive edge compared to other traveling agencies and even more clients. The strategy they
traveling agencies uses is to know the clients and sometimes even ask about their personal life,
most of the clients become friends and the agency will get even more trust and loyalty. However
when the agency is planning to establish good relationship with companies they focus on other
methods or strategies. One organization that is important for the firm is Iranian embassy; it is
very beneficial to have good contacts with the embassy in order to know about the Iranian
community, number of Swedish people who go to Iran every year. In some events the traveling
agency and Iranian embassy will work together to make plans in order to increase the population
of Swedish tourists in Iran.
The number of Swedish tourist is increasing but in a very slow trend, communicating with the
embassy and doing the right advertisement can increase the number of tourists , Iran has a very
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good potential and the embassy is making the visa policy for Swedish citizens easier so they can
visit the country.
4.2 Case B Case B is an Iranian traveling agency located in Stockholm; the company has more than 15
employees and 10 years of experience. The owner of the firm works with several hotels and
other traveling agencies in Iran, also they have contract with different airline companies, and
they also have good relationships with Iranian embassy.
Foreign market entry
According to the interviewee, the owner of the traveling agency came from Iran 15 years ago, 5
years later after doing some research and understanding the market, rules and regulations in
Sweden he decided to open up a traveling agency. At the beginning it was hard to adapt to the
country and understand the company’s policies in Sweden but after a while it was manageable to
establish the agency according to the framework of the Swedish regulations. The insurance
system and loan system in Sweden supports most of the agencies but they must have the
requirements.
The interviewee mentioned that, for an investor who comes from Iran and does not have a
Swedish resident permit it is hard to get accepted by the banking and insurance system and most
of the time other people who have resident permit in Sweden must help the investors.
According to the owner, the strategy tactic used to enter the market in case B was to explore the
market and know about all the rules and regulations and competitors, and later on have plans and
act accordingly.
According to the interviewee the good thing about Sweden is the fact that if you follow the rules
and have honesty it is easy to take care of business, however the taxation system can sometimes
make it hard for companies. The more income a company has the more tax is deducted from
them, also the person who is aiming to open up a business in Sweden must fully understand the
labor force policies in Sweden, hence the investor must have a good knowledge about the rules
and regulation before getting in.
Cross-cultural marketing
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One of the most important things that one must know about a country is the behavior and the
culture of the country they want to do business in. In case B the manager established strong
relationships with Swedish people to know more about their cutler so he can use this as an
advantage in his business. Since the owner of the traveling agency is from Iran he knows the
culture of Iranian people very well. Case B decided to employ Swedish Iranians in order to solve
the cultural barrier problem, by doing this the employees can well understand the people and
provide them with what they are looking for.
It was mentioned that people who come from different countries have different point of views
and ideas when it comes to traveling, so it is good to understand the language of the clients. Case
B first started employing mainly Swedish people at the agency but then they realized that
sometimes they cannot give the proper consultation to the Iranian clients, because they have
problem understanding the culture. Therefor the agency had to make some changes and solve the
issue.
Porters 5 forces
The interviewee stated that, for entering the market in Sweden the only strategy used was to
know about the country’s rules and regulation, people and competitors. It takes time to get used
to the system and it is important to know the right people and have connections. Issue of trust is
also important, the agency claims that in 2005 they trusted some investors and made the wrong
strategy and almost lost the agency.
They are number of competitors in Stockholm that can sometimes make it hard for the agency to
stabilize its profitability, but at the end of the day all the agencies have their own market, for
instance some agencies are good in booking tickets, some agencies are focusing on tourism
industry and case B is somewhere in between. So the clients know what agency to choose
according to the demands they have.
Case B s policy is to mainly focus on its own clients and do not interfere with other agencies,
they have also mentioned that some of the agencies are working with them but they are mainly
Swedish agencies. So before entering the market they just focused on increasing the quality of
their offers and selling them at a price that people are satisfied. This was hard for the agency at
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the beginning but after finding the right companies they managed to come up with good offers
with reasonable prices for the clients.
The process of communicating with airline companies is very hard sometimes, and most of the
airlines that they work with are Iranian airlines. The agency also has contracts with some of the
hotels in different cities both in Sweden and Iran so they can create better offers for clients and
make it easy for them. The problem is some time the companies raise the prices and the agency
may lose profitability, because clients know them for low prices but this problem has been
solved through negotiations with the other party.
Market segmentation
Key clients of the agency are from the Iranian community in Sweden, but they also have
Swedish clients. However the focus is mainly on the Iranian citizens in Sweden and also the
students. In order to segment the market, the agency focuses mainly on Iranian community by
doing advertising and participating on different events such concerts and other ritual event.
They do advertise on radio and on Facebook and some Iranian popular websites in Sweden, but
they also get customers through Iranian embassy in Sweden. They are small number of Swedish
travelers who go to Iran for business purposes most of the time, and they will be introduced to
the agency through the embassy. They are also small number of Swedish tourists that go to Iran;
the agency has increased this number by 20%. A reason for this is because the embassy is
making the visa process for Swedish citizens easier so people can travel more. If the number of
Swedish tourist gets higher the agency will make its market segment bigger in the future.
The interesting matter that came up by the interviewee was that , most of the Swedish tourist
who travel to Iran are very satisfied with the country and they will recommend it to their friends
and families, unfortunately some of them have negative thoughts before going to Iran but after
visiting the place their opinion changes. Iranian embassy is definitely making some strategies to
increase the number of Swedish tourist in Iran but it needs more time and potential.
It was also mentioned that they cities that Swedish tourist are mainly interested are, Tehran,
Shiraz, Yazd and Isfahan.
Relationship marketing
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According to the agency has always intended to ensure good relationship with companies and
clients since they believe that with the proper relationship they can make the business easy.
They are many companies that work with the agency and this is all done through the right
strategy and relationship. The interviewee also mentioned that it is important to know the staffs
and how to distribute the responsibilities, some people are good in talking and some are more
practical people, normally those who are talkative are people that can handle negotiations with
other companies in order to make routs for good relationship.
According to the interviewee establishing strong relationship with companies and clients can
have numerous benefits for the agency, but the most important one is the fact that it brings more
value to the firm, thus companies will trust to do business and sometimes diminish their prices
for the agency, since they value long term relationship more than profit. It is also very central to
have good relationship with the employees of the firm, this can lead to a friendly atmosphere,
most of the employees at case B are close friends and they are very comfortable working with
one another.
Customer service is very important at in case B, they try to respect the customer’s opinion and be
flexible with them. The employees who deal directly with clients are well trained, they are told
how to speak with clients, they have at least three years of work experience and they are tested
for a month to see if they have the right set of skills. The interviewee also mentioned that,
internet speeds are also very helpful in terms of facilitating the customer service quality; it is
easy to get connected to the clients and solve their problems online.
4.3 Case C traveling agency Case B agency is located in Gothenburg Sweden, it is considered as one of the biggest traveling
agencies in Gothenburg with more than 7 years of experience. The firm has contract with Iranian
airlines mainly and works with some hotel and traveling agencies in Iran. They also have good
relationship with the Iranian embassy in Stockholm.
Foreign market entry
The interviewee mentioned that it was hard to enter the market in Sweden, because of having
Iranian background, the rules are a bit hard to adapt to if you are from outside EU.
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The owner of the agency had very close Swedish Iranian friends and they explained the work
situation of Sweden, both the opportunities and barriers. After living in Sweden for three years
the best business opportunity was to get in to traveling agency business. This was possible
through the right connections both in Iran and Sweden; it was easier to use some of the Iranian
Swedish people to get more in to the culture of the country and to know about the business
policies in Sweden.
Sweden is a very complex country in terms of rules and regulations and sometimes people lose a
lot of money because of it, you may end up going through the wrong direction if you take wrong
advices. The best way to enter the market is to know people in Sweden, business people who are
in the market and have live in the country for some time, to recognize the behavior of the people.
Then the next step is to learn about the migration rules and the company rules.
Sweden has a very good potential in business if you have money and you know the regulation,
traveling business has its ups and downs but if it is run under the proper management it can be
satisfactory.
Cross-cultural marketing
The culture of a country that you live in, holds a very important role in formulating the right
strategy for your business, so it is important to know about the culture by living in the country
and having friends. For instance you must know how to make profit in different events or
holidays in a country. The point of knowing a culture is to know the people of that community
and does people are the future customers and it is not possible to do business with customer you
don’t know.
The agency mentioned that culture is very important as long as you interact with the clients
directly, but if your company is mainly working online from a website cultural issues might not
be that much of a problem. The agency has many policies to solve the cultural barriers; they
make sure that the message that is send to the target group is coded in the right way and decoded
as it was aimed to. It was stated that Swedish clients normally prefer to buy tickets online, but
Iranian clients call directly; more specifically Iranian people with higher age group tend to
become friends with the agency and call most of the time. These are all because of the cultural
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differences between the two countries and to solve this problem, the agency must have a good
online system as well as customer service.
The main clients of the agency are from the Iranian community but they have Swedish clients
and sometimes customers from other countries (Norway, Finland, and Denmark mostly). Most of
the clients have the same demand , to go to Iran with the easiest route and the best price , but the
difference is the Iranians need less consultation since they know about the country , while the
other non-Iranian group need to book hotels and someone to peek them up at the airport.
They are many people in Iran who help the agency, they arrange accommodation, traveling,
transportation and they help with all the demands of the foreign clients.
Finally the interviewee added that, when people know about the clients culture, they can explore
the needs and wants, hence it will be easier to make an offer for every group of customer.
Porters 5 forces
The strategy the agency used to enter the market, was to identify the competitors and know how
they do business, it is good to become friend with other people in the same business to use their
experience. The investor must know about the rules and regulation of the country before doing
any move, they must know the company types that a person can establish depending on the
business they are planning to run, the loan system and other relevant factors.
The manager has business degree with a lot of experience in business, the plan that he made in
order to enter the market was to identify the cities with the lowest tax and highest tax, population
of the people , location and situation of the companies building and who are willing to help with
the business plan. (It was not possible to go too much in to detail)
The competition is not too intense because there are few competitors in this industry, the only
competition strategy that the agency has is to focus on its clients, and gain competitive advantage
through high quality services and customer satisfaction.
The company adjusts the prices according to the situation of the market and the companies they
have contract with, some seasons the prices rise while in some season they are less customers
and prices automatically go down.
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The companies that work with the traveling agency at end will set up the final price offer for the
customer, if they increase the price of hotels or tickets, then the traveling agency will increase its
price accordingly. Operational expenses can also vary the final price of the offers for the agency,
the rent of the place, salary of the employees are some of these costs.
Market segmentation
The main target groups are Iranians who live in Sweden, more than 90% of the customers are
from Iran, they also have customers from Scandinavian countries but the focus is on the Iranian
group.
We focus on the Iranian group through the word of tongue and some small advertising methods
like, radio and the Iranian embassy.
They are Swedish tourist who go through our agency to Iran, but is a very small number of
group, most of them are people who are married to Iranians or have relationships with each
other. The tourism industry in Iran has potential but since the people in Sweden don’t know that
much about the country they won’t travel to the place that much.
A suggestion was that, Iranian embassy must do more advertising for the country and give
positive information regarding the situation of Iran, in order for Swedish people to have a
perception of what the country looks like. The agency cannot increase the number of Swedish
tourist because it needs money for advertising, the embassy must make events and gatherings for
Swedish people to know the country and when they do it is easy to create tours and send people
to Iran. It is also possible for the embassy to sign contract with Iranian agencies to increase the
number of tourists but it has not happened, however when Swedish people come to the agency to
go to Iran it is possible to arrange flights , hotels and tours through the connections that the
owner has.
Relationship marketing:
It is beneficial for any company to have good contact and relationship with its clients, the agency
has a policy to establish relationship through mutual respect and trust. it is good to have
relationship even with other rival Iranian traveling agencies, although most of them are not open
to share their plans and ideas , it is believed that having good contacts with other Iranian
traveling agencies can be beneficial for everyone.
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Trust and commitment is so important, the owner mentioned that people and companies are
becoming more and more complex because of the competition , it is getting hard to trust
companies but if all the plans go according to the rules and regulations it can work. At the end all
the companies are trying to get profit for what they do but the difference is some actually earn
what they get and some don’t. The agency is working in a very honest way, it is honest with the
clients and also the companies they work with, but they cannot fully trust other companies
because of some issues in the past. The interviewee mentioned that the policy of the agency is to
follow the rules and make smart strategies, this does not mean they look at every one as threats,
they are professional and don’t separate business from friendship.
The interviewee had some grievances regarding relationship in business, they mentioned that
they are two types of relationship in business, a relationship that is based on respect and loyalty
which is business oriented, meaning that you work with a client or a company for some time and
this brings comfort and satisfaction for both sides and you know one another, so working
becomes easy. The other type of relationship is the one that companies or clients use to take
advantages from the other party, or as what they call favors. If you are close friend with someone
it must be separated from business, you cannot reduce your prices or do risky business because
of friendships.
People working in the agency are well experienced to handle clients; the business is strategically
planned in a way to make everyone happy. The employees talk to the clients in a very
professional way and respectful manner, it is hard to make all the clients happy but the people
working at the agency know how to talk to every client and understand their needs.
The employees are interviewed 3 times before starting, they must know Swedish and Farsi and
English, preferably and be able to handle complex situation. The management system tries to
work with the employees at the beginning to make sure they are working in the right position and
once they are sure the employee is ready to work on its own.
5 Analysis The data analysis chapter presents a cross-case analysis of the collected data, elaborated in the
previous chapter. The cross-case analysis follows the theoretical framework of this study; the
main concepts are Porters five forces, foreign market entry, cross-cultural marketing, Market
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segmentation and relationship marketing. This chapter is also dedicated towards setting the
basis for answering the research questions.
5.1 Foreign market entry According to Ofek and Turut (2008) in is essential for a company to study the country they are
planning to do business in, to recognize the pros and cons. This can help the company to plan the
right strategy before entering the market, understanding rules and regulations of a country,
cultural perspective of the people are some of these factors (Agarwal and Ramaswami, 1991;
Buckley and Casson 1998).
In all cases from A to C the companies did prepare themselves before opening up traveling
agency, they studied the regulation of the country, the banking system and the culture. In Case A
the owner lived in the country for five years before entering the market, it was mentioned that,
this period was a good time to know the people, the regulations of companies and other
competitors. In case B and C the same tactic was preformed, they studied the market, rules and
regulations and found the right connections or people who could help.
Ofek and Turut (2008) also claimed that a good way to scrutinize a foreign market is to know the
opportunities and barriers, in all cases it was argued that, benefit of working in Sweden is the
regulation system which is transparent but takes some time to adjust to. What all the agencies
had in common as obstacle was the process of adapting to the regulation of the country, the
banking system and insurance policy was also discussed in all the cases. Before starting business
in Sweden, all the cases planned to know the rules and regulations, the market and the culture
and behavior of the people but this process can become much shorter if the investor has lived in
the country for some time. These are also known as external and internal factor of business that
needs to be taken in to account prior to any investment (Wiegand 1991; ikeledo and Sivakumar
1999).
Table 7: summary of foreign market entry in all the cases
Foreign market
entry
Case A Case B Case C
Strategy
1) Study the regulation
2) Live in the country for a
while
3) understand the culture
1) Study the regulation
2) Live in the country for a
while
3) understand the culture
4) Study the taxation system
and labor force rules.
1) Live in the country for
some time.
2) Find the right connections,
3) explore the market
4) understand the rules and
regulation.
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Strategy
5) Use people who have lived
in the country to help you
shape your idea about the
country.
5) find the competitors
5.2 Cross-cultural marketing
Culture can be dined as a mental program of an individual that will be shaped by the society or
the group that the personal lives in (Hofstede, 2010). Culture is a very important factor to
consider before entering a foreign market, Crosse-cultural marketing claims that companies must
consider the importance of the countries cultures before entering the market (Malhotra et al
1996; Andreas and Malte 2011)
All the traveling agencies stated that culture is a key concept and must be well understood before
starting business. In case A the interviewee claims that knowing the culture of both Sweden and
Iran can help the agency to create offers for the travelers, for instance how to make offers in the
Iranian new year and make it compatible with Swedish calendar. All the managers and owners of
the agencies from case A to C are from Iran, this means they have a good knowledge about
Iranian culture; they have also lived in Sweden for long time which means they also understand
Swedish culture. All the agencies have solved the cultural issues by employing Swedish Iranians,
so they know how to communicate with both Swedish and Iranian clients.
Chen and Gursoy (2000) states that knowing the culture and behavior of the clients can help the
traveling companies to provide better offers.
In case A the manager claims that, by knowing tradition and culture of a traveler the agency can
make suitable arrangements or offers for every client, the agency can also give better
recommendation and advice to the customers, this also helps the quality of customer service. For
instance Swedish clients have different thoughts and perception when traveling while Iranian
travelers are looking for other criteria’s before starting the trip. Case B also has the same point
of view as case A they also have identical solutions to solve the problem.
In case C the manager also claims that, employing Swedish Iranians can help solve the cultural
barriers but they also mentioned that Swedish people like to book the offers online while Iranians
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like to call to the agency, as a result they have used a strategy to handle Swedish clients online
through their website. Lastly manager of Case C added that understanding the culture of the
country you do business in, will help you to code the offer in the proper language so the target
group can decode the offer in a way that was aimed to.
Another think that all the agencies had in common was the fact that all the agencies stated that,
understanding the culture of a client can help the agency to communicate with the proper
language and explore the needs of the customers.
Table 8: summary of cross-cultural marketing in all the cases
Cross-cultural
marketing
Case A Case B Case C
Strategy -Employ Swedish Iranians
-conduct suitable consultation
with each client according to
their culture.
-employ Swedish Iranians
-Create offers according to
the customers cultural
background
- employ Swedish Iranians
- consult clients according to
their cultural background.
- Code offers to every
segment according to their
culture.
5.3 Porters five forces
They are five forces that shape every industry these are: threat of substitute, threat of entry,
bargaining power of buyer, bargaining power of supplier and rivalry among existing firms
(Porter , 1979; MalekShirabadi et al 2013). Five forces will help every industry to analyze the
market and formulate the right strategy that helps later on to make smart profitability
(Karagiannopoulos et al. 2005).
It was witnessed that in all the cases, investors took porters five forces in to use before starting
their business, but they had situational differences in each case. For instance in case A, the
agency is 20 years old and it was easier for them to enter the market, because the number of
competitors in that time was really low. In case B and C the number of competitors had a
positive trend since they were established years after Case A. One think that is common in all
the cases is the lack of trust between the agencies; they do not work with one another since they
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don’t fully trust each other. In all the cases it was mentioned that it would be beneficial for the
Iranian agencies to cooperate with one another but no one makes the move.
What all the cases had in common prior to entry was being able to master the rules and
regulations of Sweden; this involves loan system, banking and insurance policies, contract law,
labor and rules regarding companies.
All the agencies mainly focus on their own clients, the customers go the each agency according
to their demand and wants, for instance people looking for cheap prices choose agency B,
Swedish people will more likely choose agency C because is easier for them to book tickets,
more traditional Iranians will choose case A , since they are very friendly with their clients.
For a company to be successful, it is essential to plan an entry strategy prior to any investment
(Heger and Rohrbeck, 2012). In case A the strategy was to improve the customer service to gain
competitive edge form the competitors by employing experienced customer service members and
creating a friendly environment. In case B the strategy was to explore the market in order to give
the best prices and gain price sensitive clients. Case C focused more internationally, they planed
their business in a way that both Iranians and Swedish clients feel comfortable. But in case C the
owner also gave some more specific details regarding the entry strategy of their firm, they
mentioned that the location of the agency was important, they choose to work in a city with a
good taxing policy and accessible target group for business.
In all cases bargaining power of buyer was addressed to a segmented Iranian target group, all the
agencies stated that the target group that they focus on is Iranian community in Sweden. In all
the cases it was quantified that, customer have the power to alter the business, when the demand
is high the price is also high and vice versa.
It must be mentioned that all the agencies have their own clients and the switching cost are low,
the client won’t change to other agencies that easily once they get used to the service of one
agency.
In case A the company that mainly works with the agency is the airline companies, while in Case
B the agency has contracts with airline companies, hotels and touring agencies. In case C they
companies that have contract with the agencies are mainly Airlines and hotels.
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In all the cases it was stated that the supplier companies, or in this case the companies that have
contracts with the agencies can also alter the final price of the offers, for instance when the
airline companies increase their prices it affect the agencies prices and they must increase too. It
was also mentioned that they not many airline companies available to switch to others, there for
the agencies have no choice but to increase or decrease the prices accordingly.
Table 9: summary of porters 5 forces in all the cases
Porters 5 Forces Case A Case B Case C
Entry strategy -Understanding the rules of
the country before starting
-employing the right people
-Increasing the quality of
customer service
-mastering the regulations
-Explore the market
-becoming cheaper that the
competitors.
- Mastering the regulation
-thinking more internationally
-Location of the agency
-Taxation system of each city
in Sweden
-Accessibility of target
groups
-Competing with other
agencies
-Unique customer service
-Focusing on your customers
and not get distracted
-cheapest prices
-Focusing on your customers
and not get distracted
-Gaining both Swedish
market shares and Iranian
market shares
-Focusing on your customers
and not get distracted
Bargaining power of buyer -clients are mainly from the
Iranian community in Sweden
-More demand leads to more
prices.
-clients are mainly from the
Iranian community in Sweden
- More demand leads to more
prices.
-clients are mainly from the
Iranian community in Sweden
and other Swedish clients
- More demand leads to more
prices.
Bargaining power of supplier -Airline companies
(Increase in price by the
supplier leads to increase in
price by the agency)
-low switch cost
-Airline companies
-Hotels
- touring agencies
(Increase in price by the
supplier leads to increase in
price by the agency)
-low switching cost
-Airline companies
-Hotels
- other traveling agencies
(Increase in price by the
supplier leads to increase in
price by the agency)
-low switching cost
Bargaining power of buyer: -Demand in customers leads -Demand in customers leads - Demand in customers leads
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to increase or decrease in
prices
-low switching cost
to increase or decrease in
prices
-low switching cost
to increase or decrease in
prices
-low switching cost
5.4 Market segmentation Market segmentation is a key marketing strategy which recognizes that not every customer wants
exactly the same product (goods or service) or in the same manner to the elements of the
marketing mix (Smith ,1956; Dickson and Ginter, 1987). All the traveling agencies mentioned
that they have segmented the market and they are mainly focusing on the Iranian community
Sweden. All the interviewed agencies stated that, they have clients from Sweden or other
countries but since the number is not that significant compared to the Iranian client, they mainly
target the Iranian segment through advertising and word of tongue.
All the cases had similar ways of dividing the market in to segments, case A targeted the Iranian
community through local Iranian radio channels and popular Iranian websites, Case B used the
same method but they also participated in different events as sponsor, they mentioned that they
are active in Facebook and websites. Case C mainly focuses on the target group through the
radio and sometimes magazines, all the agencies have good relationship with the Iranian
embassy in Stockholm and this will enable them to have more clients.
In tourism and traveling industry market segmentation can increase the quality and reduce the
distraction of the companies (Dolničar, 2004; Dolnicare, 2008). The same conclusion was
extracted from the empirical. All the agencies mentioned that, when focusing on specific market
segment you can design the offers in a way that matches the needs of those specific target groups
without distraction. For instance in case B, the manager mentioned that the majority of Iranians
clients are price sensitive , so by focusing on the behavior and the demand of Iranians we can
understand that by lowering the price we can have more clients from this segment.
All the agencies mentioned that they are Swedish travelers that buy tickets from them; they are
also clients from other Scandinavian countries. However the rate of Swedish travelers vary from
each case , case A has the lowest Swedish travelers and case B has the highest rate. The travelers
are mainly visiting Iran for business purposes and they are linked to the agencies through the
Iranian embassy. They are also Swedish travelers that visit Iran as tourist but the rate is not that
significant, case B and C are more involved in tourism activities and they both mentioned that
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for the rate of tourism to increase, the embassy must do more advertising and invite people to
know the country. The agencies claimed that Iranian embassy is planning to increase the tourism
relations between Iran and Sweden by reducing the visa procedure for Swedish citizens but they
are still a lot that needs to be done.
Table 10: summary of Market segmentation in all the cases
Market
segmentation
Case A Case B Case C
Target group -Iranian community -Iranian community -Iranian community
Strategy tactic for
segmentation
-Radio
-website
-word of tongue
-calendars
-Radio
-websites
-Magazines
-events
-Radio
-websites
-Magazines
5.5 Relationship marketing Relationship marketing is about establishing long term relationship with the customers through network,
connections, trust and commitment, it is very important for service Providers to establish good
relationship with their clients. No doubt this causes many direct and indirect impacts on the interests and
the profits of the firm (Morgan and Hunt, 1994; Evers et al 2012).
In all the cases from A to C it was accepted that relationship is a very crucial concept in business
, all the managers admitted that by improving the relationship of the agency with other
companies they can have a long lasting business. Trust and commitment was also considered as
two fundamental element in a good relationship, all the interviewees mentioned that in Sweden
the tradition of business is based on trust and commitment and without it there is no relationship.
Theron et al (2007) claims, companies in Business to business area must have good relationship
in order to gain strong network and connection.
All the agencies are working with different companies and they all admitted that, by having
quality relationship with other companies they can maintain a long lasting relationship and
develop a respectable network for future business. In case A the manager has motivated all the
employees to respect and be friendly with other companies; this will lead to a good relationship
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and strong network. In case B the manager has a similar but different strategy, they identify the
employee that is smart and talkative and give the responsibility of interacting with other
companies to that person. The Manager of Case B mentioned that every work is completed
through a decent relationship; therefore it is also important to conduct a good a relationship
internally. As a result the manager encourages every employee to also have good relationship
with one another, in order to have a productive and friendly environment.
Case C has also the same policy toward relationship marketing; but they also mentioned that
business relationship is very beneficial as long as it does not lead to favors for anyone; this
means that business must be separated from personal life. In case B the policy is to have a very
strong network both in Sweden and Iran, this cannot be done without a good relationship. It must
be added that, the agency is in a very good stage of relationship with all the companies and this
gives them a very big domain of connections and networks.
Customer service is a branch of relationship marketing that can increase the value of a company,
it focuses on increasing the quality of customer service and gaining customer satisfaction, this
process is don through respecting the clients opinion and formulating an strategy to satisfy their
needs (Mithas et al 2005; Alveraz et al 2010; Senn et al 2013).
In all the cases it was agreed that high quality customer service can increase the value of the
agency. In case A the strategy is to, encourage the employees to have friendly conversations the
customers and try to fulfill all their demands. Case A and Case C have different opinions when
it comes to customer service strategies, in Case A it is important to become close friends with the
clients , a lot of clients are also close friends with the employees and this is very valuable for the
agency. In Case C the policy is to keep all the clients happy, but in a more professional manner,
the employees must be clear with the customers and respect their opinions but they cannot be too
friendly with the clines since it is not that beneficial for the company. The employees are given
instruction to avarice entering into people personal lives or becoming friends.
In case B the same strategy as Case A has been used, they believe that a friendly environment
and respectful language toward the clients can be an advantage for the company, in both case A
and B complaint management is handles in a very friendly and respectful manner, they try to
make the customers satisfied.
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Sichtmann et al (2011) claims that, in order to have high quality customer service, the employees
must be selected and monitored professionally. In case A the manager has employed experiences
customer service employees and they speak both Swedish and Persian, in Case B the same
strategy has been adopted. They also monitor the employees for some time to make sure the
results are positive.
In Case C they are more demanding from the customer service department , therefore before
employing any one they are some stages that the employees must go through in order to fulfill
the criteria’s. First they must have at three interviews with the manager, after passing this stage
they must work under the supervision of the manager for some time in order to make sure they
understand how to handle different situations.
Tritos et al (2010) states that, Customers attitude and behavior are also very crucial to take in to
account by the customer service team in any company. All the agencies are mainly dealing with
Swedish and Iranian clients and they have solved this issue by employing people who have both
Swedish and Iranian background. Hence, the employees know how to handle customers with
different attitude and behaviors.
Table 11: summary of relationship marketing in all the cases
Relationship
marketing
Case A Case B Case C
Customer service -It must be handle in a
friendly manner
.respecting the clients
.Becoming friend with all the
customers
It must be handle in a
friendly manner
.respecting the clients
.Becoming friend with all
the customers
It must be handle in a
professional manner
.respecting the clients
-Separating personal life from
business life
Control theory -Employees must know both
Swedish and Persian
-The employees must have
work experience.
-Employees must know both
Swedish and Persian
-The employees have work
experience.
Employees must know both
Swedish and Persian
-the employees must have
work experience.
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-The employee must be
friendly with the clients.
-The employee must be
friendly with the clients.
-The employee must pass the
requirements
Relationship
marketing benefit
-Helps the long term
profitability.
-Makes the business easy.
-is gained through trust and
commitment.
-Helps the long term
profitability.
-Makes the business easy.
-is gained through trust and
commitment.
-Helps the long term
profitability.
-Makes the business easy.
-is gained through trust and
commitment.
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6 Conclusion This chapter of the paper gives answers to purpose and research questions of the study in the
discussion part. It also provides suggestions for researchers and managers who are interested in
this topic. The chapter ends with limitations of the study and suggestions for future research.
6.1 Discussion of the Results This study is based on analyzing three Iranian traveling agencies in Sweden with a qualitative
research method. The investigation sought to gather data and information concerning how these
traveling agencies build up their business in Sweden despite all the cultural and background
differences. It was noticed that the agencies use similar strategies to compete with one another.
They must first adapt to the culture of Swedish people and then try to understand the business
regulations. It was noticed that all the agencies have lived in Sweden for some time before
starting their business. It helped owners to understand the rituals and behaviors of the people
Swedish. It was very crucial for the investors to understand the taxations and labor system in
Sweden in order to plan the right strategy.
Most of the agencies staffs are Swedish Iranian; this was mentioned as one of the solutions to the
cultural differences between the two countries. The targeted customers are mainly from the
Iranian community in Sweden, since this group is the most traveled group to go to Iran. So the
market is segmented and the target group is mostly the Iranian community in Sweden. There are
small rate of Swedish tourism and travelers that go to Iran, but the rate is not that significant. It
was noted that the Iranian embassy is aiming to improve its tourism relationship with Sweden
but nothing substantial has been done. Some of the Iranian agencies are focusing on Swedish
tourists and travelers, they arrange hotels and tours but they don’t believe that the rate of
Swedish travelers will go up in the near future.
6.2 discussion of Research questions The purpose of this study is to investigate how an Iranian traveling agency can be established in
Sweden. The country has potential for investors to consider investing in traveling business. They
are many Iranians living in Sweden, the country has almost 12000. They are not so many Iranian
traveling agencies in Sweden according to the Iranian embassy in Stockholm. The market is
open for any interested investor to enter the industry, it can be witnessed that the market has the
potential for investors.
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However they are barriers that must be solved before entry, Sweden and Iran are two very
different countries when it comes to culture and backgrounds. This means the Iranian investor
must fully proper before starting business in Sweden.
From the above, the following research questions where calculated.
6.2.1 What opportunities does an Iranian traveling agency have in Sweden
By the gathered empirical investigations and analysis, it can be concluded that, they are small
number of Iranian traveling agencies in Sweden and the population of Iranian community is
relatively high, this can be count as an opportunity for the investors. The rules and regulations
are very transparent and straight forward which is also in favor of the investors.
It is also possible to adjust to the cultural differences; all the managers have lived in Sweden for
some time before starting their business. The governmental organizations and other companies
are also very trust worthy, this means that the business environment is healthy and has high
standards. The country is also well developed and has very high standards in terms of internet
speed and IT.
Having high speed internet allows the companies to make purchasing easy and fast, they can also
get connected to their clients a lot easier, most of the agencies in Sweden have strong and user
friendly websites, also the Iranian agencies are using websites to sell tickets.
It must be mentioned that the target group for Iranian agencies are mainly the Iranian community
in Sweden and this number is high, so this means that the market has the potential to give
profitability
6.2.2 What kind of barriers do Iranian investors have when establishing a traveling agency
in Sweden despite the cultural and background differences of the two countries
If the investor is not from EU, they must go through different procedures for establishing a
company in Sweden. Iran is also out of EU this means that, the person that comes from Iran to
invest in Sweden must fully be aware of the Swedish rules and regulations, they must also find
connections or people who can help them speed up the process since it might take some time to
know about the system.
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It is not possible for the investor to focus too much on Swedish travelers, the market is targeted
on the Iranian community, they are opportunities for future business but for now it is not worth
the potential.
The tax system and insurance system is complex in Sweden, according to the investigations, it
must be mentioned that each city has different taxing policy which must be studied well. Labor
force is also multifaceted, an investor that comes from Iran need to be aware of the labor
regulations and salaries before employing any one.
It will also take some time to fully understand the banking and insurance policies, people from
out of EU cannot rely on any loans for their business in Sweden unless the investor is getting
help from a Swedish citizen.
They cultural and background differences can make the procedure slower and it must be solved
in order not to affect the business, in this case the investors lived in the country for some times
and employed Swedish Iranians to work for their agency.
6.3 Implications This section is divided into two subsections, the first of which will address the implications from
a theoretical perspective. The second subsection will then examine the more practical
implications this study has brought forth.
6.3.1 Implication for theory
For the sake of theoretical implications, this study has tested five theories, in order to gain dipper
understanding of the topic. The followings are the theories that have been tested in this study.
According to Ofek and Turut (2008), investors must do the right planning and research before
entering a foreign market. Foreign market entry was tested positive according to the empirical
data, since all the investors did study the market and the regulations of Sweden before starting
their business. According to Morgan and Hunt (1994) it is beneficial for companies to establish
strong relationship through trust and commitment in order to ensure long term profitability
.Relationship marketing was beneficial since it stresses the importance of trust and commitment
and loyalty in long term business and also matches the business tradition in swede. Also within
relationship marketing, high quality customer service was proven to be positive for the
companies, because it makes the clients happy and satisfied.
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According to Dickson and Ginter (1987) it is much more beneficial for tourism firms such as
traveling agencies to carefully segment their market and create offers for each target group
according to their needs. Market segmentation makes the target group more specific and easy to
focus, this also has been tested positive since all the agencies from case A to C have been using
this strategy. Malhotra et al (1996) argues that, investors must understand the culture of a
country before entering the market. Cross-cultural marketing stresses the importance of culture
in business, this theory was relevant for this investigation and all the agencies did take culture as
an important element in business.
6.3.2 Implication for managers
After conducting the research, they are number of managerial recommendations that are useful
for any investor who is willing to enter Sweden for business. Sweden is country that follows
rules and regulations and they believe in equality, it is highly recommended for the managers to
study the business regulations of the country before starting any business.
Market is typically selected as a result of extensive market analyses and there should be a real
evaluation preceding mode selection decisions. On the other hand, these processes did not evolve
completely without direction or simply as a consequence of chance meetings and events. Rather,
the companies’ managers were typically interested in attracting customers from Swedish market,
even if they had not determined beforehand which these customers are. Markets were initially
chosen if they appeared to have something to offer, not because the markets in question were
considered to offer the greatest potential. In fact, the companies did not know which markets to
consider optimal, but at least they judged them to be interesting enough. Similarly, the
companies entered into relationships with counterparts, not because these were the best ones in
any objective sense, but because they had something tangible to offer. In essence, readiness to
act on what were perceived as beneficial opportunities existed early on. These points to emergent
new market entry processes and a strong impact of managerial influences on process formation,
as suggested by much of the SME internationalization literature, which all of the companies in
this study was included. This pattern holds for all tourism agencies, were more active in
searching for opportunities initially.
Knowing about the Swedish culture will also give a broader point of view to managers and
investors, they can understand the people’s needs and wants, they will also know about their
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rituals. It is advised to live in the country for some time before starting any investment, or do
some consultation with the right people.
The companies also believe in trust and commitment and they are open for good business
relationships, it is advised for managers to follow the same business tradition, meaning that they
must understand that trust and honesty has high values in Sweden and must be respected. In the
search for opportunities on new markets, personal relations and networks should be frequently
used by the responsible managers.
Characteristics of tourism and the tourism product also affected management processes. In the
tourism industry, specific advantages are attached to employing a foreign intermediary. Since the
service is sold before it is consumed, the sale often taking place in another country, the purchase
is arguably associated with more risk in the mind of the customer compared to the purchase of a
product that can be evaluated beforehand. The customer is, thus, forced to place a great deal of
trust in the seller, trust that might be easier for a local seller to elicit than for a foreign seller.
Buying tourism products in a foreign country may also be linked to high transaction costs for the
customer, perhaps primarily search costs. These can be reduced if the customer trusts his local
reseller.
All the firms used the Internet to some extent, although none used it strategically to reach
specific markets. During the internationalization processes, learning by doing is clearly
important. It must be stated that being an EU citizen gives the investor much more opportunities
in business, the managers must fully be aware of the regulations and options they have
beforehand. Knowing about the bank system, taxations and insurance is also very crucial, it is
advised to have consultations with lawyers and accountants before signing any business contract.
6.4 Limitation of the study The limitations of this study generates mainly from the chosen research approach which was
qualitative approach and partly from the research strategy which was multiple case study.
Regarding this matter, one of the main boundaries or limitations of qualitative research includes
the capability to generalize the result to other cases since; qualitative research typically includes
providing in-depth and detailed material regarding a specific population or case. Qualitative
research is often tailored to the needs of one population or a specific case under study (Bryman
& Bell, 2007). Therefore, it would be complex to extrapolate the findings and draw general
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conclusion from the results of qualitative studies (Ibid). Since the study is based on only three
traveling agencies in Sweden the study lacks statistical generalizability.
It was also noticed that the Iranian traveling agencies are working in the same style and fashion,
so it was difficult to have diverse perspectives.
Moreover, data collection method of this study may have affected the result of the study. Since
semi-structured interviews were conducted to collect the data, therefore, the study had to rely on
respondents’ descriptions of their companies’ work, which could have been overstated or
understated concerning applying innovation in waste management processes. Furthermore, tow
interview was conducted for one case and one interview for the other two cases due to the
limited time; hence the numbers of interviews in totally was low. If more interviews could be
made with different people in the same traveling agencies it could lead to more answers and data,
as a result it could give a broader perspective to the subject.
Another limitation was the ambiguity of some of the theories which might have influenced the
answers. It was sometimes hard for the despondence to fully understand the concept they want to
answer, therefore extra explanations where given to them.
6.5 future researches This study was conducted through qualitative research approach focusing on three Iranian
traveling agencies. For further research it is advised to carry out a quantitative research method
and also involved other traveling agencies beside Iranian agencies, in order to have larger scale
of samples and compare the style of work between them, later on make a generalization of the
results. It is also better to interview several people from each agency.
Notably, very little research exists regarding the adaptation of tourism firms in economies that
are especially dependent on international tourism. Further, this thesis have studied tourism
companies whose internationalization processes have developed relatively independently, i.e.
firms that have not internationalized by bigger cooperation’s or/and other companies to reach
their foreign markets. Studying the internationalization processes in projects might yield
contrasting findings, which better help understand the phenomenon of tourism company
internationalization. The rapid growth in Internet usage, as well as the development of ways in
which the Internet can be employed strategically by travel agencies achieve direct sales, are other
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areas calling for more research. It is also recommended to focus more on the tourism relationship
between Iran and Sweden more specifically since it was not possible to investigate this area more
in depth.
6.6. Concluding remark
Tourism industry has very high potential for investors around the world. According to Raju
(2009) expected growth from tourism and traveling industry in Europe alone is around $106785
billion in 2014. There are many golden opportunities in tourism and traveling industry for
investors, learning the culture, rules and regulations of countries can help investors to determent
the market of a country. The geographical locations of the country and attractions play important
role in traveling business.
The tourism and hospitality industry is identified by the products which are needed to satisfy the
demand for travel accommodation, food and beverage away from home.
Demand for accommodation is a function of travel and tourism. Tourism as a service industry
comprises of several allied activities which together produce the tourist product. With the right
preparations and research every investor can benefit from this profitable industry.
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Appendix:
1. How does your company formulate the right strategy to enter the market?
2. What is your entry strategy? What criteria’s do you measure before entering a foreign market?
3. How does your company compete with the other similar firms in the industry?
4. How do you compete with the rivals in the industry? How about new rivals?
5. (Bargaining power of buyer) How big is your target group? Are they limited or not? Does it alter the
prices?
6. (Bargaining power of supplier) what is the power of suppliers (companies you have contracted with) in
this industry? How will their actions affect costs, supplies and developments?
7. Does culture of the country you enter impact your strategy?
8. How does culture affect the performance of your company?
9. How do you solve the cultural barriers?
10. Do you think travelers with deferent cultural background have deferent behaviors and expectations from
the traveling?
11. Does your company follow any cultural strategies in every country they enter?
12. Do you think good relationship with clients, stakeholders and companies you work with can improve your
business?
13. What is the role of commitment and trust in your firm?
14. Does having a good network and relationship with other companies increase profitability in the long run?
How?
15. Does high quality customer service increase the value of the firm?
16. Do you think is important to know how to speak with each client (the language of customers)?
17. How do you select the employees who interact with clients?
18. Does high quality customer service give competitive advantage?
19. What opportunities and barriers do you have in Sweden?
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20. What is your main target group?
21. How do you segment your market?
22. Can customer segmentation help your traveling agency?
23. Do you have any Swedish travelers or tourist going to Iran? How is the rate?
