A decision model to aid entry-mode strategy selection

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Virginia Tech

With the phenomenon of internationalization gaining in importance, it is crucial for companies to be aware of what the internationalization process involves. An important part of the process is selecting optimal entry modes for foreign target markets. The objective of this research has been to develop guidelines to aid in such a selection.

A theoretical decision model was first developed based on existing research literature. The literature, however, did not adequately address the influence of company objectives on the entry-mode selection process. To overcome this deficiency, the theoretical model was super-imposed with real-world data gathered via interviews with industry personnel actively involved in the entry-mode decision making process. This yielded the final decision framework. This framework approaches the selection process in three steps--1) elimination of unfeasible entry modes, 2) selection of objective and factor concordant entry modes, and 3) selection of the optimal entry mode for a given target market.