Methodology for International Market Selection – Recommendation of a Standard Procedure and Empirical Application to a Company in the Construction Business

Companies have been seeking opportunities outside the home country’sboundaries, identifying attractive foreign markets, looking either for new customers that are willing to purchase the company’s products and services, new suppliers that offer better products and services for smaller prices, or even new workers. This master thesis deals with the issue of international market selection, one important stage of the internationalization process of the firm. In order to optimize the allocation of the company’s scarce resources, it needs to identify international markets which offer the highest potential, in form of high attractiveness, low risk and high competitive position from the part of the firm. The company should also optimize the efficiency of the international marketing research. This can be done by using systematic international market selection procedures, which has a positive correlation to the level of international success of firms over selections made subjectively. Even though the issue of international market selection has received little attention in the field of international business and international marketing research, several models that describe how companies should (or actually do) proceed when identifying foreign countries as potential targets can be found in the literature. However, no standard procedure can be identified. The main objective of this thesis is then to recommend a standard procedure for international market selection, i.e. a procedure that can be applied by any company, regardless of its size and industry. In order to do that, some selected models are presented and analyzed, and important constructs that help to build a standard procedure are discussed. These refer, for example, to the environmental factors to be considered in an international market selection procedure, its quantity, the sequence in which they are analyzed, the number of stages, the evaluation methods for each stage and the inclusion or not of the analysis of the entry mode. The recommended procedure is then tested in the case study of a Germancompany in the construction business. Here the application of the procedure to a real case shows some issues, like the lack of available, reliable and comparable data