Page 171 - GLOBAL STRATEGIC MARKETING

6.6.1 Internal criteria

• Company objectives: The main objectives of the company can have
great influence in the selection of an entry mode. The lower the
aspirations, the more likely the selection of entry modes that has a
minimum amount of commitment (e.g. indirect exporting).

• The need for control: Most international companies prefer to have a
certain degree of control over their businesses. The higher the
desirability for control, the higher the degree of involvement (wholly

owned subsidiary).

• Internal resources, assets and capabilities: Companies with a high
level of resources are comfortable with a high degree of involvement

in the overseas market. It is advisable that they consider carefully the
distribution of their resources between different markets.

• Flexibility: The overseas environment changes constantly. To cope
with change, the company will need a certain amount of flexibility in
the selection of its entry modes.

6.6.2 External criteria

• Market size: Market potential can relate to the current size of the
market. Larger markets imply major resource commitments in the
form of joint ventures or wholly owned subsidiaries.

• Risk: The greater the risk factor, the less eager an international
company is to make commitments to the country concerned.

• Government regulations: Restrictions or trade barriers can change
the international company’s strategy when deciding to get involved.

• The competitive environment: The nature of the competitive
situation in the locality is another driver.