Entry Mode Sequencing Model for Emerging International Construction Firms

Abstract

Entry mode selection is one of the critical decisions in construction firms’ international market entry strategies. In the course of internationalization, rather than focusing on a single entry mode, it is essential for entrants to syndicate or sequence various entry modes to ensure their sustainable growth. Thus, this study aims to establish an entry mode sequencing model and identify the interrelationships among the different entry modes. To achieve this, after verifying the nine most commonly adopted international entry modes in the construction sector through case studies and preliminary surveys, an entry mode sequencing model was developed by drawing on experts’ opinions and using the interpretative structural modeling (ISM) method. The developed model depicts a six-level structural relationship between the entry modes on the basis of their sequencing pattern, with cooperative and temporary entry modes such as strategic alliance and local agent at the bottom of the hierarchy and competitive and permanent modes such as sole venture company at the top. In addition, an impact matrix cross-reference multiplication applied to a classification (MICMAC) analysis was performed to identify the interrelationships of the entry modes by examining their dependency and driving power. Last, a framework for firms to select a potential developing infrastructure market is presented based on the different host country’s factors. The insights offered by this study contribute to the body of knowledge on the theme of internationalization in the construction industry and can aid practitioners and international market aspirants to accomplish sustainable international progression.