| Summary: | This study strives to explore the phenomenon of emerging market penetration by travel service firms, and examine how these firms’ strategies may vary in different institutional circumstances.Driven by structural and demographic changes in both affluent and new world economic powers, the development of world tourism is expected to continue in the coming decades. In particular, emerging economies have shown a substantial proliferation of tourist-generating ability. On a global scale, it is noticeable that travel service firms have been highly active in exploring markets in emerging economies. The world’s fastest developing travel service market, China provides an excellent context to study how firms cope in a rapidly changing institutional environment. The literature review shows that the importance of this subject is not properly justified. Against this background, addressing the emerging market penetration issue for travel service firms is deemed to be theoretically significant and of actual value to businesses. This study is the first to explore the use of social networks as emerging markets penetration strategies by travel service firms. After thoroughly evaluating the prevalence and effectiveness of various international business theories in explaining the use of networks in emerging economies, the synthesis of institutional theory and resource based view was considered to be the sound theoretical choice. The empirical work is carried out by adopting a theoretical sampling approach, with interview and case study used as the main research methods. This approach is suitable in capturing a holistic picture of the phenomenon, as well as comprehensively illuminating the institutional environment of the target market and the use of social networks as market penetration mechanisms. The author examines the impacts of political, legal, social-cultural as well as industrial institutions on travel service firms’ emerging market strategies, and presents two key findings. First of all, the results of research suggest that social networks, including both business to government (B2G) and business to business (B2B) relationships are (when used as travel service firms’ emerging market penetration strategies) strongly institutional oriented. Secondly, it is discovered that the travel service firms attempting to penetrate into emerging economies are of a heterogeneous nature. Therefore, the exploitation of the institutional oriented network approach is not confined to a single form. Cross-sector, large scale tour operators, ethnic SME tour operators and regional tour operators receiving preferential treatment from the Chinese government, each type has its own manifestation of the institutional oriented networks. Based on the key findings, this study introduces a dynamic emerging market penetration framework incorporating the most influential institutional forces. The study fills a gap in the current international tourism research, and enhances understanding towards travel and tourism markets in emerging economies. It is hoped that this study will also serve as a stimulus for further discussion on other emerging tourism markets. The framework developed from this research will provide strategic implications for travel service companies aimed at emerging markets, and be applicable in other service sectors with similar characteristics.
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