Market Entry Strategy

by using Decision Making Model

Class Instructor: Thomas L. Saaty

Rozann W. Saaty

Prepared by: Tai-jen Chen (tchen@katz.pitt.edu)

Jiun-ming Wu (jwu@katz.pitt.edu)
Introduction
Asia is one of the powerful economies in the world. Recently, the booming
economies in India and China attract many multinational companies to invest or joint
venture. As a global marketer, we would like to have a customized model to assist us
to make the decisions more correctly and accurately. Therefore, we apply the theory
and concept of the Analytic Network Process to help us build a market entry strategy
model.
This model is not only useful to the IT industry but also could be used by the other
corporations who are trying to get involve in the Asia market. Our strategy to select
the criteria is mostly attributed to the marketing concept, such as SWOT, Five forces,
and 4 P's. By plugging in the data from the knowledgeable marketers, we can easily
get the best choice with sensitivity analysis, and detailed information about each
alternative.

Top level model architecture

Strategic criteria
According to the targeting and segmentation strategies in the market field, we define
the most important strategic criteria to evaluate and weight the BOCR.
Rating

Detailed descriptions in BOCR model

Benefits
In order to evaluate the benefits of all the alternative countries, we utilize three
control criteria: Economic Benefits, Social Benefits, and Political Benefits. In each
criteria, we also break down to some categories for rating the alternatives.

Economic
2.Economic Characteris
1.Economic F
2.Economic S
3.Market Siz
Opportunities
In order to evaluate the opportunities when entering the market, we focus on the
economic and social opportunities, especially on the opportunities in the investment
expenditures and global brand image.

Economic
8.Investment
1.Sunk
2.Retur
Costs 3.New M
In order to find the alternatives that are the least costly for us, we utilize two
control criteria: economic costs and social costs. In this cost model, we examine the
financial costs, such as tax and sales wages, and marketing expenditures, such as

9.Demography
promotion costs. In addition, in the social costs, we review the essence of business
in order to know the business situations in the countries.

Economic
7.Financing Situa
1.Tax
Risks
2.Ren
3.Sale
To analyze the risks is very important especially when dealing with the global
business. We break down to three categories of risks: economic risks, political
risks, and social risks.

Economic 4.Ope

12.Marketing
3.Industry Exp
Characteristic
1.Competitio
1.Adve
2.Tech. Adva
2.Mark
Overall Results
Additive (negative)
Multiplicative

This model told us: currently, China will be the best entry point to the Asia market.
The second one is India. The overall value is very close to China. It may be our
second choice. In order to know the advantages and disadvantages of each
alternatives, we will go deeper to review the full report.

Result analysis
Results from Benefits
From the figure below, we know China is the best choice in the economic
criteria. Although China is one of the “mostly unfree” economies in the world,
the market size, technical advancements, taxes, and renting costs give China lots
of advantages to stand out from the other alternatives.

On the other hand, we can see the Japan is the best choice in political and social
criteria. Because of its political stability, enterprises characteristics, and the good
relationships with sales channels, Japan

Alternative Rankings

Graphic Alternatives Total Normal Ideal Ranking

China 0.8414 0.2991 1.0000 1
India 0.7433 0.2642 0.8834 2
Japan 0.7048 0.2505 0.8376 3
Korea 0.5238 0.1862 0.6226 4

China Total Priority Rank Japan Total Priority Rank

Economic 0.1984 1 Economic 0.1047 3
Political 0.1215 4 Political 0.2134 1
Social 0.0942 4 Social 0.1594 1

India Total Priority Rank Korea Total Priority Rank

Economic 0.1332 2 Economic 0.0821 4
Political 0.1823 2 Political 0.1494 3
Social 0.1401 2 Social 0.1149 3

Results from Costs

Obviously, the costs in Japan are very high because of its well-development
economy. Compared with Japan and Korea, China and India have lots of costs
advantages.

Alternative Rankings

Graphic Alternatives Total Normal Ideal Ranking

China 0.5216 0.1863 0.5216 4
India 0.5315 0.1899 0.5315 3
Japan 1.0000 0.3572 1.0000 1
Korea 0.7464 0.2666 0.7464 2

China Total Priority Rank J a p a Tn o t a l P r Ri o ar ni t ky

Economic 0.1118 3 E c o n o m 0i c. 2 1 6 8 1
Social 0.0984 4 S o c ia l 0 .1 8 4 5 1

India Total Priority Rank K o r e Ta o t a l P r Ri o ar ni t ky

Economic 0.1112 4 E c o n o m 0i c. 1 5 8 0 2
Social 0.1049 3 S o c ia l 0 .1 4 4 3 2

Results from opportunities

 Currently, because the China and India are booming their economies, there
will be abundant opportunities in both countries. However, in the social
opportunities, because Japan has strong global marketing abilities, such as
branding, in this category Japan will have more advantage than China and India.

Alternative Rankings

Graphic Alternatives Total Normal Ideal Ranking

China 0.9641 0.2875 1.0000 1
India 0.8406 0.2507 0.8719 3
Japan 0.8943 0.2666 0.9276 2
Korea 0.6547 0.1952 0.6791 4

China Total Priority Rank J a p a nT o t a l P r iRo ar int yk

Economic 0.1773 1 E c o n o m 0ic . 1 4 9 2 2
Social 0.1322 3 S o c ia l 0 .1 4 8 1 1
Global Brand
Image!!
India Total Priority Rank K o r e aT o t a l P r iRo ar int yk
Economic 0.1427 3 E c o n o m 0ic . 1 0 2 0 4
Social 0.1352 2 S o c ia l 0 .1 2 0 6 4

Results from risks

Since China has lots of political issues, the risks are very high in political as
well as social. In Japan, because of highly competitive market, it brings the high
risks in investing in Japan market.

Alternative Rankings

Graphic Alternatives Total Normal Ideal Ranking

China 0.9529 0.3134 1.0000 1
India 0.8235 0.2708 0.8642 2
Japan 0.6277 0.2065 0.6588 4
Korea 0.6364 0.2093 0.6678 3

China Total Priority Rank Japan Total Priority Rank

Economic 0.1261 4 Economic 0.1486 1

Political 0.2373 1 Political 0.0849 4

Social 0.1693 1 Social 0.1213 4

India Total Priority Rank Korea Total Priority Rank

Economic 0.1306 3 Economic 0.1391 2

Political 0.1813 2 Political 0.0965 3

Social 0.1498 2 Social 0.1253 3

 Sensitivity Analysis

Benefits Costs
Costs

Sensitivity Analysis

Opportunities Risks
Risks
Conclusion
This time, our goal is to find out the cost-effective market. Therefore, China is
the best choice for our requirements. However, the model is telling us more:
 If we want to build up a global brand, Japan will be our best choice!
 If we are not the “risk-taker”, we may choose India to prevent from high
political and social risks.

Once the model is built, we can adjust the weight immediately according to
any event in politics or economy happens. Plus, in the future, we can break the
alternatives down to “city” level with just a few modifications but we can get
more detailed information and support our decisions.