2014 | 9 | 5-31
Article title

Application Of Mcda Methods and Stochastic Dominance Rules in the Entry Mode Selection Process in International Expansion

Title variants
Languages of publication
When a company decides to enter overseas markets, it must take a number of strategic decisions, such as, for instance, a decision on the appropriate entry mode. The company has a wide array of choices: various forms of exporting, contractual modes such as licensing, franchising and management contracts, turnkey projects and subcontracting or equity-based modes including wholly-owned subsidiary or joint venture. The various entry modes differ greatly in resource commitment, degree of risk, level of control or profit potential. The appropriate choice of entry mode is a key element of the success of foreign operations and the future of the company. Hence, it is essential for the company to conduct a deliberate and conscious analysis of advantages and disadvantages of each entry mode from the point of view of internal and external factors that influence the choice of entry mode, taking into account the opinion of different participants of the decision- making process. The aim of this paper is to carry out the simulation of the entry mode selection, using MCDA methods and stochastic dominance (SD) rules, from the perspective of a dynamically developing company that manufactures and distributes hygiene, cosmetic and medical products for women, children and adults.
Physical description
  • Agarwal S. (1994), Socio-cultural Distance and the Choice o f Joint Ventures: A Contingency Perspective, Journal of International Marketing, Vol. 2, No. 2,63-80.
  • Agarwal S. and Ramaswami S.N. (1992), Choice o f Foreign Market Entry Mode: Impact o f Ownership, Location, and Internalization Factors, Journal of International Business Studies, Vol. 23, No. 1, 1-27.
  • Anderson E. and Coughlan A. (1987), International Market Entry and Expansion via Independent or Integrated Channels of Distribution, Journal of Marketing, Vol. 5, No. 1, 71-82.
  • Anderson E. and Gatignon H. (1986), Modes of Foreign Entry: A Transaction Cost Analysis and Propositions, Journal of International Business Studies, Vol. 17, No. 3, 1-26.
  • Ayal I. and Zif J. (1979), Market Expansion Strategies in Multinational Marketing, Journal of Marketing 1979, Vol. 43 (Spring), 84-94.
  • Benito G.R.G. and Lawrence S.W. (1994), Foreign Marketing Servicing: Beyond Choice of Entry Mode, Journal of International Marketing, Vol. 2, No. 2, 7-27.
  • Bradley F. and Gannon M. (2000), Does the Firm’s Technology and Marketing Profile Affect Foreign Market Entry? Journal of International Marketing, Vol. 8, No. 4, 12-36.
  • Brans J.P. and Vincke Ph. (1985), A Preference Ranking Organization Method: The PROMETHEE Method for Multiple Criteria Decision-Making’, Management Science, Vol. 31, 647-656.
  • Brans J.P., Vincke Ph. and Mareschal B. (1986), How to Select and How to Rank Projects: The PROMETHEE Method, European Journal of Operational Research, Vol. 24, 228-238.
  • Brouthers K.D. and Brouthers L.E. (2001), Explaining the National Cultural Distance Paradox, Journal of International Business Studies, Vol. 32, No. 1, 177-189.
  • Canabal A. and White G.O. (2008), Entry Mode Research: Past and Future, International Business Review, Vol. 17, 267-284.
  • Cavusgil S.T. (1985) Guidelines for Export Market Research, Business Horizons, Vol. 28, No. 6, 27-33.
  • Delios A. and Beamish P.W. (1999), Ownership Strategy of Japanese Firms: Transactional, Institutional, and Experience Influences, Strategic Management Journal, Vol. 20, 915-933.
  • Diakoulaki D. and Koumoutsos N. (1991), Cardinal Ranking o f Alternative Actions: Extension o f the PROMETHEE Method, European Journal of Operational Research, Vol. 53, 337-347.
  • Duliniec E. (2009), Marketing Międzynarodowy, Polskie Wydawnictwo Ekonomiczne, Warszawa.
  • Erramilli M.K. and Rao C.P. (1993), Service Firms’ International Entry-mode Choice: A Modified Transaction-cost Analysis Approach, Journal of Marketing, Vol. 57, 19-38.
  • Gannon M. (1993), Towards a Composite Theory of Foreign Market Entry Mode Choice: The Role o f Marketing Strategy Variables, Journal of Strategic Marketing, Vol. 1, 41-54.
  • Gomes-Casseres B. (1990), Firm Ownership Preferences and Host Government Restrictions: An Integrated Approach, Journal of International Business Studies, Vol. 21, No. 1, 1-27.
  • Gorynia M. (2007), Strategie zagranicznej ekspansji przedsiębiorstw, Polskie Wydawnictwo Ekonomiczne, Warszawa.
  • Górecka D. (2009), Wielokryterialne wspomaganie wyboru projektów europejskich, TNOiK „Dom Organizatora”, Toruń, 263-277.
  • Górecka D. (2010), Zastosowanie metod wielokryterialnych opartych na relacji przewyższania do oceny europejskich projektów inwestycyjnych [in:] Metody i zastosowania badań operacyjnych’10, M. Nowak (ed.), Wydawnictwo Uniwersytetu Ekonomicznego, Katowice, 117-120.
  • Górecka D. (2011), On the Choice o f Method in Multi-criteria Decision Aiding Process Concerning European Projects [in:] Multiple Criteria Decision Making '10-11, T. Trzaskalik, T. Wachowicz (eds.), Publisher of the Universityof Economics in Katowice, Katowice, 97-101.
  • Górecka D. and Szałucka M. (2013), Country Market Selection in International Expansion Using Multicriteria Decision Aiding Methods, Multiple Criteria Decision Making, Vol. 8, 31-55.
  • Gronhaug K. and Kvitastein O. (1993), Distributional Involvement in International Strategic Business Units, International Business Review, Vol. 2, No. 1, 1-14.
  • Hennart J.F. (1991), The Transaction Costs Theory o f Joint Ventures: An Empirical Study of Japanese Subsidiaries in the United States, Management Science, Vol. 37, No. 4, 483-497.
  • Hill Ch. et al. (1990), An Eclectic Theory o f the Choice o f International Entry Mode, Strategic Journal Management, Vol.11, No. 2, 117-128.
  • Hinkle D. (1965), The Change of Personal Constructs from the Viewpoint of a Theory of Construct Implications, Ph.D. Dissertation, Ohio State University, Ohio.
  • Johnson G. et al. (2008), Exploring Corporate Strategy, FT Prentice Hall, Harlow.
  • Johanson J. and Vahlne J.E. (1997), The Internationalization Process o f the Firm - A Model o f Knowledge Development and Increasing Foreign Market Commitments, Journal of Business Studies, 1977, Vol. 8, No. 1, 23-32.
  • Kim W.C. and Hwang P. (1992), Global Strategy and Multinationals Entry Mode Choice, Journal of International Business Studies, Vol. 23, No. 1, 29-54.
  • Koch A.J. (2001), Selecting Overseas Markets and Entry Modes: Two Decision Process or One? Marketing Inteligence & Planning, Vol. 19, No. 1, 351-361.
  • Kogut B. and Singh H. (1988), The Effects of National Culture on the Choice of Entry Mode, Journal of International Business Studies, Vol. 19 (Fall), 411-431.
  • Kotler P. (2005), Marketing, Rebis, Poznań.
  • Kumar V. et al. (1994), An Interactive Multicriteria Approach to Identifying Potential Foreign Markets, Journal of International Marketing, Vol. 2, No. 1, 29-52.
  • Lee J. (1986), Determinants o f Offshore Production in Developing Countries, Journal of Development Economics, Vol. 20, No. 1, 1-13.
  • Li J. (1995), Foreign Entry and Survival: Effects o f Strategic Choices on Performance in International Markets, Strategic Management Journal, Vol. 20, No. 5, 333-351.
  • Luo Y. (1999), Entry and Cooperative Strategies in International Business Expansion, Quorum Books, Westport.
  • Martel J.M. and Zaraś K. (1995), Stochastic Dominance in Multicriteria Analysis under Risk, Theory and Decision, 39, 31-49.
  • Nowak M. (2004), Preference and Veto Thresholds in Multicriteria Analysis Based on Stochastic Dominance, European Journal of Operational Research, 158, 339-350.
  • Nowak M. (2005), Investment Project Evaluation by Simulation and Multiple Criteria Decision Aiding Procedure, Journal of Civil Engineering and Management,11, 193-202.
  • Papadopoulos N. et al. (2002), Toward a Tradeoff Model for International Market Selection, International Business Review, Vol. 11, 165-192.
  • Rogers M. and Bruen M. (1998), A New System for Weighting Environmental Criteria for Use within ELECTRE III, European Journal of Operational Research, Vol. 107, Iss. 3, 552-563.
  • Root, F.R. (1994), Entry Strategies for International Markets, Jossey-Bass, San Francisco.
  • Russow L.C. and Okoroafo S.C. (1996), On the Way towards Developing a Global Screening Model, International Marketing Review, Vol. 13, No. 1, 46-64.
  • Rymarczyk J. (2004), Internacjonalizacja i globalizacja przedsiębiorstwa, Polskie Wydawnictwo Ekonomiczne, Warszawa.
  • Saaty T.L. (2006), Fundamentals o f Decision Making and Priority Theory with the Analytic Hierarchy Process, Vol. VI of the AHP Series, RWS Publications, Pittsburgh.
  • Saaty T.L. and Vargas L.G. (1991), The Logic o f Priorities. Applications o f the Analytic Hierarchy Process in Business, Energy, Health & Transportation, Vol. III of the AHP Series, RWS Publications, Pittsburgh.
  • Sakarya S. et al. (2007), Market Selection for International Expansion. Assessing Opportunities in Emerging Markets, International Marketing Review, Vol. 24, No. 2, 208-238.
  • Sarkar M. and Cavusgil S.T. (1996), Trends in International Business Thought and Literature: A Review of International Market Entry Mode Research: Integration and Synthesis, The International Executive, Vol. 38, No. 6, 825-847.
  • Sitek E. (2000), Inwestycje bezpośrednie przedsiębiorstwa na rynku zagranicznym, Wydawnictwo Wydziału Zarządzania Politechniki Częstochowskiej, Częstochowa.
  • Toruńskie Zakłady Materiałów Opatrunkowych, (7 March 2014).
  • Vernon R. (1966), International Investment and International Trade in the Product Cycle, The Quarterly Journal of Economics, Vol. 80, No. 2, 190-207.
  • Whitelock J. and Jobber D. (2004), An Evaluation of External Factors in the Decision of UK Industrial Firms to Enter a New Non-domestic Market: An Exploratory Study, European Journal of Marketing, Vol. 38, No. 11/12, 1437-1455.
  • Wind Y. and Perlmutter H. (1977), On the Identification of Frontier Issues in International Marketing, Columbia Journal of World Business, Vol. 12 (Winter),131-139.
  • Woodcock C. et al. (1994), Ownership-based Entry Mode Strategies and International Performance, Journal of International Business Studies, Vol. 25, No. 2, 253-273.
Document Type
Publication order reference
YADDA identifier
JavaScript is turned off in your web browser. Turn it on to take full advantage of this site, then refresh the page.