Entry Mode Taxonomy for International Construction Markets

Abstract

The global construction market is large, expanding, fragmented, regionally fluctuating, heterogynous, risky, and highly competitive. To survive and grow in this arena full of opportunities as well as pitfalls, international contractors must use the most appropriate entry modes for targeted overseas markets. The globalization process in the construction industry has seen various entry modes adopted by international contractors to meet specific internal and external business and project environments, and new innovative entry modes continue to emerge. It is, therefore, important for contractors to understand a comprehensive set of entry mode options and their respective characteristics, structure, formulation process, advantages, and disadvantages. Through analysis of 94 market entry cases, this paper identifies and defines a taxonomy of 10 basic entry modes for international construction markets, including strategic alliance, build-operate-transfer equity project, joint venture project, representative office, licensing, local agent, joint venture company, sole venture company, branch office/company, and sole venture project.