Development of entry location, entry timing and entry mode decision model for construction firms in international markets

Abstract

The international market expansion process involves a combination of many strategic entry decisions. Most previous studies have dealt with entry location, entry timing and entry mode (ELETEM) decisions in an isolated way by considering one dimension or a combination of dimensions in particular. Although there have been various models relating to international market entry decisions, there is currently no model that attempts to integrate the factors linking the ELETEM decisions for construction firms. The purpose is to determine a linkage between the ELETEM decisions by incorporating the factors that are mutually inclusive and have significant influence on these decisions. Forty-five (45) Malaysian contractors undertaking projects in international markets responded to the survey. The findings suggested that the mutually inclusive and significant factors (MISFs) influencing the ELETEM decisions were: the firm’s ability to assess market signals and opportunities, the firm’s resources and the firm’s experience in similar works. It was observed that the firms had adopted long-term strategies, repositioned their knowledge from research and development activities and readapted their resources and experience in their global operations. The findings led to the development of the ELETEM decision model to guide interested firms in making better decisions for their future international ventures.

Keywords:

• Construction firms
• entry location
• entry timing
• entry mode
• international market

Acknowledgements

The authors would like to thank the Institute of Infrastructure Engineering and Sustainability Management (IIESM), Faculty of Civil Engineering, UiTM, for providing technical support needed and also to the Research Management Institute, UiTM, Malaysia and Ministry of Science, Technology and Innovation (MOSTI) for granting the financial support (E-science fund: 100-RMI/SF 16/6/2 (33/2012)) for this research. We are also grateful to the professionals and managers from Malaysian construction firms, Malaysian Construction Industry Development Board and other institutions that have participated in this research.

Disclosure statement

No potential conflict of interest was reported by the authors.