Characterizing entry modes for international construction markets: Paving the way to a selection model

Abstract

Purpose

The decision on market entry mode, or how to enter a selected market, is of critical importance for international contractors' profit making and sustainable growth. Based on a previous study, which successively identified ten basic entry modes specifically for international construction markets, this paper aims to focus on differentiating these entry modes in terms of organizational setting characteristics, compatibility, transferability, feasibility regarding different markets, and strategic effects so as to develop a systematic and comprehensive selection method for international construction market entry modes.

Design/methodology/approach

Market entry cases were collected through extensive archival analysis and interviews of practitioners. By a comparative analysis, how the entry modes differ by organizational setting characteristics is analyzed, and how they can be combined or sequenced to deliver a market entry process is empirically explored. The strategic effects which constitute the basis for selection among the entry modes and their combinations are identified, which include risk exposure, return, resource commitment, control, and flexibility.

Findings

How the basic entry modes can be combined and sequenced is mapped. The applicability of selected entry modes regarding 42 main country markets is reported. It is found that mobile entry modes and permanent entry modes differ in resource commitment, investment risk and strategic flexibility. Based on the results of the comparative case study, a process model for market entry mode selection is proposed.

Originality/value

The study provides theoretical implications for future studies to develop the market entry mode selection method. Practitioners can also obtain a better understanding of the relationship between the basic entry modes as well as the constraints and principles governing the selection between them.

Citation

Chen, C. and Messner, J. (2011), "Characterizing entry modes for international construction markets: Paving the way to a selection model", Engineering, Construction and Architectural Management, Vol. 18 No. 6, pp. 547-567. https://doi.org/10.1108/09699981111180872