TASKS

Tasks

Table of Contents

INTRODUCTION3

MARKET IDENTIFICATION, SCREENING AND SELECTION4

INDUSTRIALISED AND LESS-DEVELOPED COUNTRY MARKETS9

CONCLUSION14

REFERENCES16

APPENDIX20

Introduction

The international marketing literature highlights the importance of systematically evaluating and selecting potential foreign markets ([Anderson and Strandkov, 1998:48], [Brouthers and Nakos, 2005:84], [Kumar et al., 1993:74] and [Rahman, 2003:65]). The resulting process is deemed to be linear, logical, and non-recursive (Gillespie et al., 2007:78). According to Kumar et al. (1993), the process takes a three-stage approach: screening, identification, and selection. Rahman (2003) identifies how successful Australian international businesses select their international markets.

A two-stage process emerged from this work based on the evaluation of market size attractiveness and market structural attractiveness. Wood and Robertson (2000) identify market potential, legal issues, politics, infrastructure, economics, and culture as the most important market selection criteria for US-based exporters. Brouthers and Nakos' (2005) work on Greek exporting SMEs finds that those firms that had developed their own systematic way of selecting and targeting foreign markets by focusing on objective criteria tended to perform better than firms that adopt an ad-hoc approach relying on intuition and/or personal feelings to make their market selection choice. Other studies such as (Koch, 2001a:98) and (Koch, 2001b:35) discuss market selection in light of entry mode choice.

Market Identification, Screening And Selection

Little research exists concerning how international franchisors choose partners in international markets. International joint venture activity ([Al-Khalifa and Peterson, 1999:1], [Geringer, 1991:14], [Salavrakos and Stewart, 2006:35], [Tatoglu, 2000:47] and [Ulas, 2005:79]) and strategic alliances ([Dong and Glaister, 2006:84], [Hitt et al., 2004:65] and Hitt et al., 2000 M.A. Hitt, M.T. Dacin, E. Levitas, J.L. Arregle and A. Borza, Partner selection in emerging and developed contexts: resource-based and organisational learning perspectives, Acad Manage J 43 (3) (2000), pp. 449-471. Full Text via CrossRef[Hitt et al., 2000:7]) dominate this body of work. Hitt et al. (2004) examine the institutional effects on strategic alliance partner selection in transition economies, focusing specifically on the Chinese and Russian markets.

They find that Chinese firms take a long-term view of alliance partner selection, focusing on the partner's intangible assets as well as technological and managerial capabilities. Russian firms, on the other hand, because of their less stable institutional environment, focus on more short-term objectives such as access to financial capital and complementary capabilities. Tatoglu (2000) identifies a range of partner selection criteria for Western firms entering Turkey through the joint venture method. He finds that a partner's knowledge of the local market, trust between top management teams, and reputation of partner were the three top-ranked factors.

The sectoral coverage in this study is wide, covering eleven individual sectors from chemicals to consultancy, yet it does not include the retail sector. In addition, Ulas' (2005) findings on the same market also identify the partner's financial situation, relationship with distribution network, and harmony in business approach and strategies as important partner selection criteria. Partner selection for Greek joint ventures in Eastern Europe (Salavrakos and Stewart, 2006:44) and joint venture partner selection in Bahrain (Al-Khalifa and Peterson, 1999:74) both exhibit broadly similar ...