International Market Entry Decisions: A Knowledge-Based Approach

2006-03-18
As far as the growing potential in the overseas construction markets is concerned, it is becoming more important for the medium to large-size construction companies to take their parts in the global construction market. An international market selection decision may be considered as a highly complex problem since it involves several correlated parameters regarding the project, market, host country and the company in question. Moreover, there is no mathematical formulation that can easily associate all these factors together with the company strategies to give a bidding decision. There are models developed by many researchers on this subject, using different techniques such as cross impact analysis (Han & Diekmann, 2001), Analytic Hierarchy Process (AHP) (Hastak & Shaked, 2000; Gunhan & Arditi, 2005) and neural networks (Dikmen & Birgönül, 2004). Each tool has its own assumptions and shortcomings in terms of selecting input and output criteria, data collection, solution method and user intervention. The major objective of this paper is to introduce a knowledge-based approach, which adopts case-based reasoning (CBR) approach to facilitate international market entry decisions by the exploitation of past experiences that reside in the organizational memory (OM). One of the main aims of this study is to demonstrate how learning from the experiences of competitors can be utilized to assist strategic decision-making. Within the context of this research, a decision support tool namely, CBR-INT, has been constructed by using 215 real international project data and 16 features related with the project, market and the country. CBR-INT is used to predict the potential profitability of the project and the competitiveness level of the company when giving ‘bid/no-bid’ decisions in international markets. The reliability of the model is proved to be high for both prediction of potential profitability and level of competitiveness.
Citation Formats
B. Ozorhon, İ. Dikmen Toker, and M. T. Birgönül, “International Market Entry Decisions: A Knowledge-Based Approach,” 2006, p. 377, Accessed: 00, 2021. [Online]. Available: https://hdl.handle.net/11511/80863.