Application Of Mcda Methods and Stochastic Dominance Rules in the Entry Mode Selection Process in International Expansion

When a company decides to enter overseas markets, it must take a number of strategic decisions, such as, for instance, a decision on the appropriate entry mode. The company has a wide array of choices: various forms of exporting, contractual modes such as licensing, franchising and management contracts, turnkey projects and subcontracting or equity-based modes including wholly-owned subsidiary or joint venture. The various entry modes differ greatly in resource commitment, degree of risk, level of control or profit potential. The appropriate choice of entry mode is a key element of the success of foreign operations and the future of the company. Hence, it is essential for the company to conduct a deliberate and conscious analysis of advantages and disadvantages of each entry mode from the point of view of internal and external factors that influence the choice of entry mode, taking into account the opinion of different participants of the decision- making process. The aim of this paper is to carry out the simulation of the entry mode selection, using MCDA methods and stochastic dominance (SD) rules, from the perspective of a dynamically developing company that manufactures and distributes hygiene, cosmetic and medical products for women, children and adults.