Network Process Model for Group Choice of a Multinational Enterprises’ Entry Mode

Abstract

Entry mode selection is an important and practical task for an enterprise when entering a foreign market. No method in the literature applies directly. The aim of this paper is to discuss and develop an entry mode selection model. Based on an Analytic Network Process (ANP) framework, the model is for a photoelectric lens company in Taiwan looking to invest in the Vietnamese or Thai markets. The ANP is a general theory of relative measurement used to composite-priority-ration scales from individual-ration scales that represent the differential influence of factors that interact to control determinants. Based upon the theories of Transaction Cost Economics and Institutional Approach, four determinants are significant: general transaction costs, asset specificity, internal environmental institutions, and host-country environmental institutions and the 12 indicators embedded in them. Because some portions of the data are inaccessible, hypothetical numbers supplement the actual data to illustrate the processes. The paper also illustrates how a group of judges comprised of company stakeholders can implement the ANP model for selecting entry modes. Keywords: entry mode selection, Analytical Network Process (ANP), Analytical Hieratical Process (AHP)