The International Market Selection approach ( IMS ) is a function of previous experience, own resources and network membership.
As for the process, there are three main ways to get a path. First, by systematically collecting information or, second, opportunistically.
The latter could be split into
a) relationally link their activity to a partner or
b) mimetically following the path opened by others
The non-systematic are simply called opportunistic because, indeed, the companies did not seek to expand their activities beyond their limits, but finally, other circumstances brought the opportunity to do so.
Most of the empirical research shows that the systematic approach is more commonly followed by large companies, mainly because it requires time and investment. It is true that most SMEs are opportunistic because they do not have enough resources to assess the market. That is not reason enough for a try.
However, an opportunistic view is only reasonable when a company links its activity to a proven partner. This frequently happens in the automotive industry, where component suppliers maintain the flow with the manufacturer when it moves its plants to another country. In these cases, networking is a classic part of business behaviour as long as that industry is highly internationalized.
The other case, a mimetic approach, has no positive reason, just a desire to improve its position by pursuing legitimacy by following a path discovered by competitors. Understandably, isomorphic pressures can play a role in those decisions; however, a guarantee could never be assigned to the followers as to what worked and what the first actor achieved.
Aligning with the "institutional" path of the industry without research is just a "cascading" behaviour that makes no sense, considering how critical a good internationalization process can be for a company.
Even when a good IMS process requires time and money, the price is worth it, full of learning and, of course, good management practices.
#IMS #internationalbusiness #internationaltrade #marketstrategy #marketevaluation #marketanalysis
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