Foreign market entry decision model for construction companies

There exist several reasons for construction firms to expand their business into international markets. But these markets entail many risks. International construction is much riskier than domestic construction. The complex international environment is affected by diverse variables that are not part of the domestic markets; this complex environment creates risks never encountered in domestic conditions. That is the reason why a disciplined and well-informed strategy is essential when deciding whether to enter international markets. The complex variables that affect the performance of construction companies in overseas markets need to be considered in this decision. Interactions between complex factors can be structured in a model that can help to make a judgment and/or decision. Since the variables involved in the decision-making problem have social, economic, political values, in other words tangible and intangible values, the chosen model must be convenient for the measurement of these factors. The model in this research is based on the Analytic Hierarchy Process, which is based on the innate human ability to use information and experience to estimate relative magnitudes through paired comparisons. The Analytic Hierarchy Process is improved by the addition of a Delphi survey. The main objective of this research study is to develop an evaluation and decision-making model for construction firms that want to expand their business into the international arena. This research has resulted in the development of a Foreign Market Entry Decision Model which allows construction companies to test themselves for international business expansion. It sensitizes U.S. construction companies to possibilities in the international markets and highlights the importance of various factors in international construction. It should be noted that the model is company-specific rather than project-specific. An important original contribution is the use of the combined AHP/Delphi approach in the development of the model.