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Theses
2011
An empirical study on the factors influencing
international marketing strategy development
among successful exporters in Australia
Ricky Yue-Mun Tang
Southern Cross University
Publication details
Tang, R 2011, 'An empirical study on the factors influencing international marketing strategy development among successful exporters
in Australia', DBA thesis, Southern Cross University, Lismore, NSW.
Copyright R Tang 2011
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AN EMPIRICAL STUDY ON THE FACTORS
INFLUENCING INTERNATIONAL MARKETING
STRATEGY DEVELOPMENT AMONG
SUCCESSFUL EXPORTERS IN AUSTRALIA
Ricky Yue-Mun Tang
BBus (Financial Planning) with Distinction
MBus (General Management & Marketing)
A thesis submitted to the Graduate College of Management,
Southern Cross University, Australia for partial fulfilment of the
requirement for the degree of Doctor of Business Administration
June
2011
DECLARATION OF ORIGINALITY
I certify that the substance of this thesis has not been previously submitted for
any degree at this or any other university. Also, I certify that to the best of my
knowledge any help received in preparing this work and all sources used,
have been acknowledged in this thesis.
Ricky Yue-Mun Tang
26th June 2011
ii
ACKNOWLEDGEMENTS
For me to complete this study, I like to express my gratitude to the many
individuals and organisations whose contributions are greatly acknowledged
and appreciated.
I would like to thank my principal supervisor Dr. Margo Poole for her
excellent supervision. Her guidance and constructive criticism, quick response
to problems and encouragement during the entire period of the study,
together with the careful reading of the drafts of my dissertation, is sincerely
acknowledged. Without her close guidance it would have been never possible
to complete this research project within the time frame it has been completed.
To Associate Professor Peter Miller, Associate Professor Shankar
Sankaran, Dr. Carmen Cox and Dr. Don McMurray, I wish to express my
sincere thanks for their valuable insights, support and encouragement in
enhancing this study, particularly in their advices during the pre-testing of the
survey questionnaire.
I also like to thank those organisations and their managers who
participated either in the qualitative or the quantitative parts of this research.
This includes all the participants of the qualitative research for their valuable
time in the rather lengthy interviews and the participants of the quantitative
research in responding to the survey by completing the questionnaire.
Special thanks to all my colleagues and professors, particularly those
who attended the doctoral symposium that I presented on the research, for
their interest, encouragement and valuable suggestions.
Finally, I thank my wife Susan, for her continual support and
encouragement during the entire period of the study.
iii
ABSTRACT
The development of international marketing strategy is fundamental to the
success of any business attempting to market their products and/or services
overseas. There are many factors, both internal and external that impact on
the decisions in the development of international marketing strategy. This
research will examine the international marketing strategy practices of
successful Australian exporters; investigate what factors these businesses
consider and how these factors are related to the effectiveness of the strategy
development decisions.
Hence, the objective of this study is to explore the research problem
relating to determining the factors considered by Australian successful
exporters in developing their international marketing strategies and the
relationship, if any, between the strategic developmental decisions and a
range of context variables. The findings of this research will benefit both the
academic and practitioner arena, contributing to a better and improved
understanding of the factors influencing the development of international
marketing strategies that would lead to an increase in Australia’s successful
exports to overseas markets.
The target population selected for this study were all successful
Australian exporters who were either finalists or winners of the various
categories of the Australian Export Awards for the five years from 2003 to
2007. This study was carried out solely in Australia from January 2007 to
February 2010.
The mixed methods research methodology employed in this study
includes qualitative methods through in-depth interviews in the exploratory
iv
research stage and quantitative methods using an online survey questionnaire
in the descriptive and causal research stage to test the hypotheses developed
from the literature review.
From the literature review carried out, several factors were found to
have an impact on the decisions for the development of international
marketing strategy. These include: market and industry factors in both
domestic
and
foreign
markets,
the
firm’s
internal
factors,
foreign
environmental factors and public and private support networks in the foreign
markets. Thus, four hypotheses were developed based on these factors to be
tested in the descriptive and explanatory research.
These factors were further validated in the qualitative study.
Subsequently, an online survey instrument in the form of a questionnaire was
designed with all of these factors as variables to be emailed to a sample of
respondents selected randomly from the target population. The collected data
was screened, cleaned and several statistical tests were performed using
SPSS version 14.0 for Windows software to analyse the data. However, due
to the lack of statistically significant results from the analysis of the survey
data, the four hypotheses were not supported.
It is believed that this study is one of the few undertaken to examine
the factors influencing the development of international marketing strategy of
Australian exporters. It is hoped that future research will replicate this study in
other countries. Such studies will not only substantiate this research, but also
offer new insights into understanding the factors influencing the decisions in
the development of an international marketing strategy on a global basis.
v
Key Words:
International Marketing Strategy – Strategy Development Process and
Factors – International Marketing – Strategic Marketing – Strategic
Management – Australian Exporters
vi
TABLE OF CONTENTS
DECLARATION OF ORIGINALITY
ACKNOWLEDGEMENTS
ABSTRACT
TABLE OF CONTENTS
LIST OF TABLES
LIST OF FIGURES
ABBREVIATIONS
II
III
IV
VII
X
XI
XII
1
INTRODUCTION
1.1 Background to the Research
1.2 Research Problem, Questions and Hypotheses
1.3 Justification for the Research
1.4 Methodology
1.5 Outline of the Thesis
1.6 Definitions
1.7 Limitations and Delimitations
1.8 Conclusion
2
2
5
7
9
10
13
14
15
2 LITERATURE REVIEW
2.1 Introduction
2.2 Review of Parent and Immediate Disciplines
2.2.1
International Trade Theories
2.2.1.1 Comparative Advantage Theory
2.2.1.2 Product Life Cycle Theory
2.2.1.3 Production Sharing Theory
2.2.1.4 Internalisation Theory
2.2.2
Globalisation
2.2.3
Management Decision Making Models
2.2.3.1 The Rational Model
2.2.3.2 The Bounded Rationality Model
2.2.3.3 The Political Model
2.2.3.4 The Process Model
2.2.4
Strategic Management
2.2.4.1 Strategy Development Process
2.2.5
Marketing Strategy
2.2.6
International Marketing
2.2.7
International Marketing Strategy
2.2.7.1 Factors Influencing the IMS Development Process
2.3 Hypotheses Developed from the Literature
2.4 Conclusion
17
17
18
19
20
25
27
28
30
34
38
41
43
44
46
54
60
66
70
82
90
93
vii
3
3.1
3.2
3.3
RESEARCH DESIGN AND METHODOLOGY
Introduction
Justification for the Paradigm and Methodology
Research Design
3.3.1
Qualitative Methodology
3.3.1.1 Qualitative Research Objectives Statement
3.3.1.2 Qualitative Research Sampling
3.3.1.3 The Qualitative Interview
3.3.1.4 Rigour of the Qualitative Research
3.3.1.5 Data Management and Analysis
3.3.2
Quantitative Methodology
3.3.2.1 Quantitative Research Objectives Statement
3.3.2.2 Quantitative Research Sampling
3.3.2.3
Data Collection
3.3.2.4 Questionnaire Design
3.3.2.4.1 Wording and Survey Items
3.3.2.4.2 Measurement Scales
3.3.2.4.3 General Appearance
3.3.2.5
Questionnaire Pre-testing
3.3.2.6
Pilot Study
3.3.2.7
Questionnaire Administration
3.3.2.8
Data Management and Analysis
3.3.2.9
Limitations of the Quantitative Methodology
3.4 Ethical Considerations
3.5 Conclusion
96
96
96
100
104
106
106
110
112
113
116
117
118
123
127
129
131
135
136
137
138
139
147
149
151
4 DATA ANALYSIS AND RESEARCH FINDINGS
4.1 Introduction
4.2 Qualitative Data Analysis
4.2.1 Profile of Interview Participants
4.2.2 Data Reduction and Display
4.2.3 Qualitative Data Findings
4.3 Quantitative Data Analysis
4.3.1 Classification of Data
4.3.2 Preliminary Analysis of Data
4.3.2.1 Data Screening and Entry
4.3.2.2 Composite Variables
4.3.2.3
Factor Analysis
4.3.2.4 Correlation Analysis
4.3.2.5 Univariate and Multivariate Outliers
4.3.2.6 Normality of Distribution
4.3.2.7 Descriptive Analysis of Data
4.3.3
Common Method Variance
4.3.4
Reliability and Validity
4.3.4.1 Reliability
4.3.4.2 Validity
4.3.5
Testing of Research Hypotheses
4.3.6
Non-Parametric Analysis
4.4 Summary of Research Findings
4.5 Conclusion
154
154
155
157
158
162
165
165
170
170
171
171
175
176
177
179
180
181
182
183
184
189
191
192
viii
5 CONCLUSIONS AND IMPLICATIONS
5.1 Introduction
5.2 Discussion of Hypotheses Underpinning the Research Questions
5.2.1 Review and Conclusion for Hypothesis One
5.2.1.1 Market and Industry Factors in Domestic Markets
5.2.1.2 Market and Industry Factors in Foreign Markets
5.2.2 Review and Conclusion for Hypothesis Two
5.2.3 Review and Conclusion for Hypothesis Three
5.2.4 Review and Conclusion for Hypothesis Four
5.3 Conclusions from the Research Findings Regarding the Research
Questions
5.4 Contributions of This Research
5.4.1 Implications for Theory
5.4.2 Implications for Policy and Practice
5.5 Limitations of this Research
5.6 Future Research
5.7 Conclusion
196
196
196
199
200
202
206
208
212
REFERENCES
226
APPENDICES
Appendix 1: Australian Export Awards (2007) Selection Criteria
Appendix 2: Semi-structured Interview Guide
Appendix 3: Sample Size Decision Table
Appendix 4: Online Survey Questionnaire
Appendix 5: Information Sheet for Survey
Appendix 6: Introductory email to the Survey
Appendix 7: Follow-up email to the Cover Letter
Appendix 8: Email reminder to the Survey
Appendix 9: Second Email Reminder
Appendix 10: SPSS Generated Outputs
250
250
252
254
255
263
265
266
267
268
269
ix
214
216
217
219
220
221
223
LIST OF TABLES
Table 2.1: Interdisciplinary Models of Decision-making ................................. 37
Table 2.2: Characteristics of Six Dimensions of Strategy Development ........ 57
Table 2.3: Growth Strategies - Products and Markets ................................... 64
Table 2.4: Factors to Consider in the Development of IMS............................. 90
Table 2.5: Summary of the Factors’ Effect on IMS Development Decisions ... 94
Table 3.1: Types of Business Research ..................................................... 101
Table 3.2: Qualitative Purposeful Sampling Strategies ................................ 107
Table 3.3: The Semi-structured Interview Approach.................................... 111
Table 3.4: Stages in Selection of a Sample ................................................. 118
Table 3.5: Advantages and Disadvantages of Typical Survey Methods ...... 124
Table 3.6: Types of Statistical Tests ............................................................ 143
Table 4.1: Profile of Interview Participants .................................................. 158
Table 4.2: In-depth Interviews Data Display ................................................ 159
Table 4.3: Response Rate of the Survey ..................................................... 166
Table 4.4: Distribution of Respondents by Industry Category ...................... 167
Table 4.5: Distribution of Respondent Firms by their Annual International
Turnover ...................................................................................................... 167
Table 4.6: Distribution of Respondent Firms by Ownership Types .............. 168
Table 4.7: Distribution of Respondent Firms by Length of International
Experience................................................................................................... 168
Table 4.8: Distribution of Respondent Firms Product/services by Number of
Countries Marketed ..................................................................................... 169
Table 4.9: Distribution of Respondents by Mode of Market Entry ................ 169
Table 4.10: Formation of Composite Variables............................................ 171
Table 4.11: KMO MSA and Bartlett's Test of Sphericity .............................. 173
Table 4.12: Factor Analysis Eigenvalues and Component Loadings ........... 174
Table 4.13: Skewness and Kurtosis ............................................................ 178
Table 4.14: Descriptive Statistics of Data .................................................... 179
Table 4.15: Cronbach’s alpha Value of Composite Variables ...................... 182
Table 4.16: Multiple Linear Regression Findings ......................................... 188
Table 4.17: Correlation between independent and dependent variables ..... 190
Table 4.18: Demographics of Respondents ................................................ 191
Table 4.19: Summary of Hypotheses Testing .............................................. 192
x
LIST OF FIGURES
Figure 1.1: Structure of the Thesis ................................................................ 11
Figure 2.1: Relationship of Parent and Immediate Disciplines ...................... 19
Figure 2.2: The Rational Decision-making Model .......................................... 39
Figure 2.3: Resources, Capabilities and the Creation of Value ..................... 51
Figure 2.4: Key Elements of Marketing Strategy ............................................ 62
Figure 2.5: The Role of Marketing in the Organisation .................................. 67
Figure 2.6: The International Marketing Strategy Process .............................. 72
Figure 2.7: Generic International Marketing Strategies ................................. 75
Figure 2.8: Factors Influencing the Development of International Marketing
Strategy ......................................................................................................... 83
Figure 2.9: Model of the Hypotheses Relating to the Development of
International Marketing Strategy .................................................................... 92
Figure 3.1: Outline of the Research Design ................................................. 101
Figure 3.2: Literature Review and Research Methodologies Relationship .. 104
Figure 3.3: The Theory-before-Research Model.......................................... 105
Figure 3.4: In-depth Interviews by Industry Type and Firm Size .................. 109
Figure 3.5: An Interactive Model of Qualitative Data Analysis ..................... 115
Figure 3.6: The Four Phases of the Quantitative Research Process ............ 116
Figure 3.7: Principles of Questionnaire Design............................................. 128
Figure 3.8: Overview of the Stages in Quantitative Data Analysis ............... 140
xi
ABBREVIATIONS
AEAs
Australian Export Awards
ANOVA
Analysis of Variance
A$
Australian Dollar
AUD
Australian Dollar
AUSTRADE
Australian Trade Commission
CEO
Chief Executive Officer
DFAT
Department of Foreign Affairs and Trade, Australia
EEC
European Economic Communities
EU
European Union
EXEF
Foreign Environmental Factors
FINF
Firm’s Internal Factors
GDP
Gross Domestic Product
GNP
Gross National Product
GMS
Global Marketing Strategy
HREC
Human Research Ethics Committee
ICT
Information and Communication Technology
IFDM
Industry Factors in Domestic Markets
IFFM
Industry Factors in Foreign Markets
IMS
International Marketing Strategy
IMSD
International Marketing Strategy Development
Decisions Effectiveness
KMO
Kaiser-Meyer-Olkin
xii
ABBREVIATIONS
LDCs
Less Developed Countries
MFDM
Market Factors in Domestic Markets
MFFM
Market Factors in Foreign Markets
MLR
Multiple Linear Regression
MNCs
Multi-National Corporations
MSA
Measure of Sampling Adequacy
PDC
Primary Data Collection
PLC
Product Life Cycle
R&D
Research and Development
ROI
Return on Investment
SCU
Southern Cross University, Australia
SMEs
Small and Medium Sized Enterprises
SNFF
Support Networks Factors in Foreign Markets
SPSS
Statistical Package for the Social Sciences,
Quantitative Data Analysis Software
US
United States of America
xiii
CHAPTER ONE
Introduction
Chapter 1
Introduction
1.1
Background to the
Research
Chapter 2
Literature Review
1.2 Research Problem,
Questions and
Hypotheses
Chapter 3
Research Design
and Methodology
1.3
Justification for the
Research
Chapter 4
Data Analysis and
Research Findings
1.4
Methodology
Chapter 5
Conclusions and
Implications
1.5
Outline of the Thesis
1.6
Definitions
1.7
Limitations and
Delimitations
1.8
Conclusion
1
AN EMPIRICAL STUDY ON THE FACTORS INFLUENCING
INTERNATIONAL MARKETING STRATEGY DEVELOPMENT AMONG
SUCCESSFUL EXPORTERS IN AUSTRALIA
1
INTRODUCTION
1.1 Background to the Research
During the last four decades, international markets have undergone
tremendous changes with far reaching implications. Global political, social and
economic trends during this time have created major business opportunities
and challenges for international marketers. A continuous worldwide trend
towards economic liberalisation and the rise of new economies are
augmenting
such
opportunities
and
challenges.
Hence,
international
marketing is playing a vital role in world economic activities and its importance
is expected to grow further as markets become more globalised (Harcourt
2007).
In Australia, exports of goods and services totalling AUD$223 billion
are a significant component of the Australian economy and comprised around
23.7 percent of GDP in 2008 (Australia Department of Foreign Affairs and
Trade 2009). While exports exhibited strong growth in the period 1980 – 2001,
accounting for nearly one-third of GDP growth, in the five years to 2007 they
accounted for a little more than one-eighth of GDP growth (Australian
Department of Foreign Affairs and Trade 2008). Correspondingly, Australia’s
2
total export revenues grew at an annual average rate of only 6.6 percent in
the period 2001 - 2007, compared with 9.4 percent in the period 19832001(Australian Department of Foreign Affairs and Trade 2008).
Thus, in recent years there has been deterioration in the performance
of Australian exports and one would argue that this issue needs to be
explored and addressed by the export communities, including the Australian
government, international marketers and academicians.
As part of the solution to address the declining export performance,
and to meet the challenges and opportunities of the rapidly globalising
markets, Australia needs to improve its international competitiveness by
increasing the quality of management skills and knowledge in international
marketing; and bolstering research, development and innovation.
However, to succeed in global markets, improving Australia’s
international competitiveness will be imperative and streamlining development
of appropriate international marketing strategy by exporters will, in part,
contribute to this improvement in their international competiveness. The
decisions about which marketing strategies to employ, the selection of the
foreign market(s) to enter (Rahman 2001; 2006) and how to enter these
market(s) (Malhotra et al. 2003) are recognised as key aspects in exporting to
international markets (Fletcher & Brown 2005).
There are many international marketing strategies and there are many
ways to enter overseas markets. Hence, no one firm is likely to have the
resources to develop profitable international businesses based on all of these
marketing strategies. Therefore, developing the right international marketing
strategy is not only vital for businesses’ success, but could also raise
3
Australia’s international competiveness in the global marketplace and
increase its export performance.
Moreover, there appears to be a strong association between
international marketing strategy and export performance measures. This is
evidenced by the numerous research carried out in this area with the
conclusion that the implementation of a well-developed international
marketing strategy can indeed determine export success, as the majority of
the marketing strategy variables were significantly associated with overall
export performance (Aaby & Slater 1989; Cooper & Kleinschmidt 1985; Crespy
et al. 1993; Julian & Ahmed 2005; Koh 1991; Lages 2000; Lages &
Montgomery 2004; Leonidou et al. 2002; Louter et al. 1991; Lu & Julian 2008;
Ogunmokun & Ng 2004; Thirkell & Ramadhani 1998; Zou & Stan 1998).
The importance and the need for systematic development and
implementation of appropriate international marketing strategies has been
stressed by many researchers (Bennett & Blythe 2002; Bradley 2005; Doole &
Lowe 2008; Fifield & Lewis 1998), and several models on the influencing
factors in the development of international marketing strategies has been
prescribed (Bradley 2005; Doole & Lowe 2008; Fifield & Lewis 1998).
However, not many of these models have been empirically tested.
Furthermore, to date, there has been limited research carried out within
Australia on this particular issue.
4
1.2 Research Problem, Questions and Hypotheses
This study is designed to address the following research problem:
To be successful, Australian exporters need to determine the key factors
influencing the development of their international marketing strategies and the
relationship, if any, between the strategic developmental decisions and a
range of contextual variables.
Accordingly, the key questions this research will address are:
Q1 - What are the key factors influencing the development of international
marketing strategies among successful Australian exporters?
Q2 - Are the key factors influencing the development of international
marketing strategies among successful Australian exporters related to the
effectiveness of the strategy development decisions?
Following from this, the following hypotheses, developed from the
literature review in Chapter Two, are investigated in this research:
Hypothesis 1:
The consideration of market and industry factors in both
domestic and foreign markets are positively related to the
effectiveness of the development decisions of a firm’s
international marketing strategy.
This is separated into four sub-hypotheses, each of which represents a
market or industry factor in both domestic and foreign markets as follows:
5
Hypothesis 1a: The consideration of market factors in domestic markets is
positively related to the effectiveness of the development
decisions of a firm’s international marketing strategy.
Hypothesis 1b: The consideration of industry factors in domestic markets is
positively related to the effectiveness of the development
decisions of a firm’s international marketing strategy.
Hypothesis 1c: The consideration of market factors in foreign markets is
positively related to the effectiveness of the development
decisions of a firm’s international marketing strategy.
Hypothesis 1d: The consideration of industry factors in foreign markets is
positively related to the effectiveness of the development
decisions of a firm’s international marketing strategy.
Hypothesis 2: The consideration of the firm's internal factors is positively
related to the effectiveness of the development decisions of
a firm’s international marketing strategy.
Hypothesis 3: The consideration of foreign environmental factors is positively
related to the effectiveness of the development decisions of
a firm’s international marketing strategy.
Hypothesis 4: The consideration of public and private support networks in
foreign markets is positively related to the effectiveness of
the development decisions of a firm’s international marketing
strategy.
6
1.3 Justification for the Research
The global market is large, complex and diverse (Keegan & Green 2007). To
successfully market products and services to these international markets, the
development of appropriate international marketing strategies play a major
role in the success or failure of the firm’s endeavour. However, many
mistakes are made by international marketers and there exists a welldeveloped literature of market failures committed abroad by international
marketers (Dalgic & Heijblom 1996; Hartley 2004; Knight 1995; White 2002).
While many go unpublicised, such mistakes occur frequently in
international marketing (Dalgic & Heijblom 1996). Mistakes relating to
international marketing strategy occur through inadequate or inappropriate
development and implementation of international marketing strategies. The
outcomes are almost always more expensive than the costs associated with
systematic analysis and the development and implementation of appropriate
international marketing strategies that would have prevented their occurrence
(White 2002).
Hence, the international firm needs to systematically evaluate its
international marketing strategy on a regular basis to confirm that the firm’s
assets are directed toward markets with the best returns and opportunities.
However, because the resources of a firm are limited, they must be allocated
in such a way as to maximise potential success across the markets served
(Bradley 2005; Doole & Lowe 2008).
This development process encourages the firm to evaluate information
about market size, competition, regulations, and environmental factors that
will form the basis for the development of an international marketing strategy.
7
The goal of this process is twofold: firms want to minimise the mistakes of (1)
ignoring markets that offer viable opportunities for the firm's products and/or
services, and (2) wasting time on markets that offer little or no potential (Root
1998). Both of these errors could be costly for international marketers.
Accordingly, it is important that international marketers should have
some pre-set decision variables to help them develop their international
marketing strategies as well as understand the key factors that influence the
effectiveness of the development decisions of their strategy. There are a
range of decision variables and models in international marketing strategy
literature (Bradley 2005; Doole & Lowe 2008; Fifield & Lewis 1998); however
the formulation of theoretical constructs has not been followed by systematic
empirical testing of these constructs in order that these variables become
integrated into the general body of international marketing strategy theory.
Although there has been substantial research on export market
performance of Australian international businesses related to export /
international marketing strategies (Julian & Ahmed 2005; Julian & O'Cass
2004; Lu & Julian 2008; O'Cass & Julian 2003; Ogunmokun & Ng 2004;
Ogunmokun & Wong 2004), reported research on the development process of
international marketing strategy among Australian exporters has been
minimal. As such, by empirical testing of the variables influencing the
development process of international marketing strategy among successful
exporters in Australia, this research is a step towards filling that gap.
Hence, this study represents one of the few empirical investigations of
the international strategy development process in Australia. As such, it has
both academic and practical contributions. From an academic perspective,
8
this research, (1) successfully integrates and applies existing knowledge in
decision-making theories, trade theories, strategic management theories,
marketing strategy theories and international marketing theories, (2) identifies
and establishes the key factors related to the development process of
international marketing strategy, (3) identifies and tests specific constructs for
making international marketing strategy development decisions, and develops
measurement scales for those constructs, and (4) integrates qualitative and
quantitative research methodologies to give greater insight into the research
question.
From both policy and practical perspectives, this research will be: (1)
useful to firms of different sizes, (2) provide guidance to government agencies
such as Austrade, that offer information and advice to organisations planning
to export, and (3) has the potential to be the basis of a decision support
system for the development of an organisation's international marketing
strategy.
1.4 Methodology
The mixed methods research methodology employed in this study integrates
both qualitative and quantitative methods. Qualitative and quantitative
research differ in many ways, but they complement each other (Neuman
2006). Furthermore, the use of multiple methods or triangulation reflects an
attempt to secure an in-depth understanding of the phenomenon in question
(Creswell & Plano Clark 2007). Because different lenses or perspectives
result from the use of different methods, often more than one method may be
used within a project so the researcher can gain a more holistic view of the
9
setting (Morse 1994). The justification for this mixed methodology is discussed
in Section 3.2.
In-depth interviews were used in the exploratory stage of the research
to identify and validate the constructs of theories on the development of
international marketing strategy that arose from the literature review as well as
contributing input for specific constructs of international marketing strategy
development in the design of the survey instrument.
Several factors were found to have an impact on the decisions
developed in the literature review. These included market and industry factors
in both domestic and foreign markets, the firm’s internal factors, foreign
environmental factors, and public and private support networks in the foreign
markets.
Following these factors, four hypotheses were developed from the
literature review to be tested in the descriptive and explanatory (causal) stage
of the research through an online web-based survey. Details of the qualitative
research procedures are discussed in Section 3.3.1 and the quantitative
research procedures in Section 3.3.2.
1.5 Outline of the Thesis
This section provides an overall outline of the thesis structure and an
explanation of the appropriateness of this structure. This thesis was
constructed following the outline of Perry’s (1998) five chapters thesis model,
which in the main, conforms to that generally undertaken for dissertations
within the discipline of marketing (Perry 1998) and is presented in Figure 1.1
on the next page.
10
Figure 1.: Structure of the Thesis
Body of Knowledge
Chapter 2
Literature Review
-
Chapter 5
Conclusions and Implications
Justification of the research
problem and research gap
-
Research problem solved
Implications and contributions
Chapter 1
Introduction
-
The research problem
Overview of the research
Chapter 3
Research Methodology
-
Chapter 4
Data Analysis
Justification of the research
paradigm
Detailed description and
justification of the research process
-
Analysis of responses
Testing of
relationships
Research Project
Source: Adapted from Perry (1998)
Perry (1998) described the thesis as requiring a structure that unifies it
around one key idea or issue. The key issue in this dissertation is the
research problem, introduced in Section 1.2: To determine the key factors
considered by successful Australian exporters in developing their international
marketing strategies and the relationship, if any, between the strategic
developmental decisions and a range of contextual variables.
Chapter One provides the introduction, describes the background to
the research and sets the scene for the thesis by providing an overview of the
dissertation. It identifies the research problem to be addressed and states the
11
research questions and hypotheses. It also provides both theoretical and
practical justification for the research to be undertaken, as well as giving an
overview of the methodology and analytical approach adopted. Finally, the
definitions and limitations of the study are discussed, and structure of the
dissertation is explained.
Chapter Two presents a review of the literature related to the factors
influencing the development of international marketing strategy. It also draws
considerably from the literature in developing and justifying the research
problem, confirming the research questions and formulating the hypotheses.
This examination of the relevant literature is used to build the theoretical
foundation of the thesis.
Chapter Three presents the methodology used to undertake the study
and covers, in detail, the research process followed in this study. Both
qualitative and quantitative research methodologies are discussed and
justified. Issues relating to the development, refinement and administration of
the data collection instrument are then explored. Finally, anticipated analytical
procedures are examined and ethical considerations are discussed.
Chapter Four discusses the analysis of both qualitative and quantitative
data and addresses the hypotheses developed in Chapter Two. The profile of
respondents is reviewed and preliminary analysis is undertaken. Factor
analysis is undertaken and the data are screened to assess reliability and
validity. Finally, the results of the analysis relating to the hypotheses are
presented.
Chapter Five consists of a detailed discussion in which the findings of
the study are evaluated by considering the contribution to theory, implications
12
in both theoretical and practical terms, as well as limitations and implications
for further research in light of the findings.
1.6 Definitions
Definitions used by researchers may be specific to a particular study and are
not necessarily applicable to other studies. The definitions provided here
clarify the meanings of significant terms used in this dissertation. They are
listed in alphabetical order.

Australian Government Agencies refer to the Federal government
agencies like Austrade, the Department of Foreign Affairs and Trade
offices as well as states and territories trade and investment offices.

International Marketing Strategy Development refers to a complex set
of activities, decisions, processes and routines involved in the design of
international marketing plans.

International Marketing Strategy Development Decisions Effectiveness
refers to the measure of the effectiveness of those decisions made
during the development of a company’s international marketing
strategies that would impact on the organisation’s export success in
overseas markets.

Successful Exporters refer to finalists and winners in the various
categories of the annual Australian Export Awards. The selection
criterion for the Australian Export Awards is in Appendix 1.
13
1.7 Limitations and Delimitations
Australia is a small, open economy and a relatively minor player
internationally with less than two percent share of the world GDP and less
than one percent share of the annual international trade in 2007 (World Trade
Organization 2008). As this research has been carried out in Australia only,
the findings of this research may not be considered as an international
phenomenon. To determine international validity, these tests need to be
replicated with similar firms in other countries.
Another limitation of this research is that the findings of the variables
are reflective of the international marketing strategy development behaviour of
successful exporters in Australia. This research identifies the factors that
affect the development process of international marketing strategy and the
measurement scales of each of those factors. It does not take into
consideration the individual weighting that may be assigned by each firm to
those factors and its measurement scales.
Also, time may be a factor in the development and implementation of
international marketing strategy. An international marketing strategy that has
the potential for a particular product/service today may not continue to have
the same potential in a few years hence. Similarly, an international marketing
strategy that is not appropriate today may, in the future, hold greater potential.
This research does not examine this time factor and its importance in the
development of international marketing strategy.
Finally, the scope of this research is also limited by the research
questions this study addresses. All the above stated limitations of this study
are beyond the scope of the research questions. Further, it is inappropriate to
14
try to investigate all the important diverse issues related to a broad topic like
international marketing strategy in one research project.
1.8 Conclusion
This introductory chapter has set the stage for the study. In this chapter the
research problem, research questions and hypotheses have been introduced
and the need for this research justified. The methodology used in this
research has also be briefly described and justified. Definitions of the key
terms have been presented, limitations described, and the dissertation has
been outlined. With this foundation, the dissertation will now proceed to give a
detailed description of the research.
In the next chapter, the relevant literature that sets the foundation of
the study will be reviewed and specific research hypotheses underpinning the
research questions will be developed.
15
CHAPTER TWO
Literature Review
Chapter 1
Introduction
Chapter 2
Literature Review
2.1
Introduction
Chapter 3
Research Design
and Methodology
2.2 Review of Parent
and Immediate
Disciplines
Chapter 4
Data Analysis and
Research Findings
2.3 Hypotheses
developed from the
Literature
Chapter 5
Conclusions and
Implications
2.4
Conclusion
16
2
LITERATURE REVIEW
2.1
Introduction
In the first chapter, the overview of this thesis was addressed. In this chapter,
a review of the literature from several key business disciplines will build the
theoretical foundation of this study. The focus of this review is to draw and
consolidate knowledge from different yet related literature in an effort to
synthesise a general model of successful international marketers' strategy
development behaviour; and to establish to what extent existing models that
have been proposed incorporate these theories in explaining the firm's
international marketing strategy development process. Theories from several
disciplines will be examined. Research hypotheses will be drawn from these
different related areas which are argued to contribute to our knowledge of the
development process of international marketing strategies.
Firstly, the structure and map of the chapter sections are outlined.
Following this, the three parent disciplines of this research, namely
International Trade (Section 2.2.1) and Globalisation (Section 2.2.2);
Management Decision Making (Section 2.2.3); and Strategic Management
(Section 2.2.4) are then considered. These parent disciplines provide the
background for the immediate disciplines, which focus on Marketing Strategy
(Section 2.2.5), and International Marketing (Section 2.2.6) as well as the key
factors affecting the development process of international marketing strategy
(Section 2.2.7) in organisations.
17
Finally, from the review of this literature, four hypotheses are
developed to address the research questions on what are the key factors
influencing the development of international marketing strategies among
successful Australian exporters and how are those factors related to the
effectiveness of the strategy development decisions?
As important insights into the development processes of international
marketing strategy can be gained from examining theories and ongoing
research in the fields of international marketing, strategic management,
marketing strategy, international trade and globalisation, and management
decision making, the development processes of international marketing
strategy models proposed in the literature will be examined within this broader
context to identify any factors not currently being accounted for.
2.2
Review of Parent and Immediate Disciplines
Given the large amount of disciplinary literature that relates in some way to
this research, only the critical antecedents have been examined. According to
Phillips and Pugh (1987) a literature review should examine disciplines
immediate to the research problem, and also demonstrate a familiarity with
relevant parent disciplines which they described as focus and background
theories, respectively.
Management decision
making models, international trade and
globalisation theories and strategic management theories are all parent
disciplines of international marketing strategy. Whereas, international
marketing and marketing strategy theories may be viewed as immediate
18
disciplines. Figure 2.1 shows the relationship of the disciplines that will be
analysed in the subsequent sections of this chapter.
Figure 2.: Relationship of Parent and Immediate Disciplines
Management
Decision
Making
International
Marketing
IMMEDIATE
Marketing
Strategy
Strategic
Management
PARENT
International
Trade and
Globalisation
International
Marketing Strategy
Source: Developed for this research
2.2.1
International Trade Theories
International trade theories have been used to explain why trade and
investments take place. As affirmed by Waud et al. (1992, p.868) “Every
country finds it advantageous to trade with other countries. In varying
degrees, all economies are linked with one another by trade flows and
financial networks which circle the globe”. Furthermore, the theories of
international trade have been instrumental in establishing convincingly the
gains to be made from international specialisation and trade (Ethier 1997;
Frey 1986; Griffin & Pustay 2007; Kenen 2000; Krugman & Obstfield 2006;
Markusen et al. 1995).
19
In general, trade occurs because nations have different resource
endowments and technological capabilities (Markusen et al. 1995). Because
of these differences, each nation can gain by specialising in those products
that it produces efficiently, and by trading for those it produces inefficiently or
cannot produce at all. In brief, international trade allows nations to increase
the productivity of their resources through specialisation and to realise a
higher standard of living than is possible in the absence of trade.
These international trade theories, which explain why nations trade
with each other, are related concepts to international marketing. These
theories are aimed at understanding product flows between countries, either
in the form of imports or exports. In this respect, international marketing and
international trade are concerned with the same phenomenon (Jeannet &
Hennessey 2004; Krugman & Obstfield 2006; Rivera-Batiz & Rivera-Batiz
1994; Sachs & Larrain 2001; Yarbough & Yarbough 2005).
The international trade theories to be examined in relation to the
international marketing strategy are: (1) the comparative advantage theory,
(2) product life cycle theory, (3) production sharing theory, and (4)
internalisation theory.
2.2.1.1
Comparative Advantage Theory
The comparative advantage theory was developed by nineteenth-century
British economist David Ricardo. It states that a country should produce and
export those goods and services for which it is relatively more productive than
are other countries, and import those goods and services for which other
countries are relatively more productive than it is (Ricardo 1963).
20
Ricardo (1963) argued that trade could be beneficial on the basis of
comparative advantage and not just absolute advantage. Even when a nation
has absolute advantage in everything it produces, it will also have a greater
advantage in some goods than others. By choosing to produce goods in
which it has a greater advantage, the more efficient nation can allocate scarce
resources more effectively. The output forgone or opportunity cost is less
when resources are taken away from less advantaged goods and put to use
in the production of more advantaged goods. When each country chooses to
produce by specialising on the basis of lower opportunity cost, the resulting
resource allocation would be in accordance with the principle of comparative
advantage. Since economic efficiency among trading nations improves as a
result of trade based on comparative advantage, countries would be better off
in terms of total wealth after trade (Ricardo 1963).
Another alternative theory of international trade traces the source of
comparative advantage to the relative scarcity of the factors of production in
different countries. Developed by two Swedish economists, Eli Hecksher
(1949) and Bertil Ohlin (1933) and known as the Theory of relative factor
endowments or Hecksher-Ohlin Theory, it states that a country will have a
comparative advantage in producing products that intensively use resources
(factors of production) it has in abundance (Heckscher & Ohlin 1991).
According to the Hecksher-Ohlin Theory, factor endowments of
resources and labour differ among nations. Thus, countries export goods that
use their most abundant resources intensively and import the goods that
require intensive use of their most scarce factors. However, some research
21
argues for the consideration of both innate and acquired assets (Krugman
1994; Porter 1990b).
The Hecksher-Ohlin Theory suggests a strong relationship between
potential international business transactions and a nation's endowments of the
factors of production. Later on, Hirsch (1967) adds market size as a potential
indicator. He emphasises the relationship between international trade,
comparative costs, and a nation's market size; stating that countries that are
likely targets for initial exports and sources of early manufacturing competition
have similar domestic markets.
Based on the above theories, advanced economies having similar
climate and factor proportions should not trade with one another since there
are no comparative advantages. However, much trade does occur among
developed nations and thus there must be other variables in addition to factor
endowments, which play a significant role in determining trade volume and
practices.
Porter (1990b) analysed over one hundred case studies of industries in
ten leading developed nations, and developed the Theory of National
Competitive
Advantage
which
identified
four
major
determinants
of
international competitiveness: (1) factor conditions – the nation’s position in
factors of production, such as skilled labour or infrastructure, necessary to
compete in a given industry; (2) demand conditions – the nature of home
demand for the industry’s product or service; (3) related and supporting
industries – the presence or absence in the nation of supplier industries and
related industries that are internationally competitive; and (4) firm strategy,
structure, and rivalry – the conditions in the nation governing how businesses
22
are created, organised and managed, and the nature of domestic rivalry. Also
identified were chance events and government influences, which are deemed
minor determinants (Porter 1990b).
However, international trade theories are not without its limitations. In
reality, international trade is far more complex than the limiting assumptions
upon which the theories of international trade are based. A firm's costs are
based not only on factor costs, such as wages and materials, but also on the
volume of production (Ross et al. 2005). This pragmatic observation, which
was first suggested by the Boston Consulting Group, is now widely known as
the Experience Theory. Hence, even though a firm may be paying higher
wages and experiencing other higher factor costs than it would encounter in
other parts of the world, if it has a volume advantage over competitors, its net
cost position may still be lower.
Another limitation of classical trade theories is that they ignore product
and marketing differentiation (Griffin & Pustay 2007). A firm's ability to
compete in national or international markets is only partly determined by its
cost position. Of great significance are the actual product and marketing
differentiation and the effectiveness of the firm's customer offering in relation
to competitive offerings. When several competitors practice undifferentiated
marketing, the result is intense competition in the largest market or market
segments and under-satisfaction of the smaller ones. Kuehn and Day (1962)
called this tendency to chase the largest market the majority fallacy. The
recognition of this fallacy had led firms, particularly in domestic marketing
situations to increase their interest in entering smaller neglected markets or
23
market segments. Increasingly, firms are trying to find a match between their
markets and their abilities.
Also, trade theories are primarily concerned with commodities rather
than with manufactured goods or value-added products (Griffin & Pustay
2007). They assume that all suppliers have identical products with similar
quality and physical attributes. However, this practice of assuming product
homogeneity is not likely to be made among those familiar with marketing.
More often than not, products are endowed with psychological attributes. As
such, brand name products are often promoted as having additional value
based on psychological nuance (Kapferer 2004).
A further shortcoming of classical trade theories is that the trade
patterns as described in the theories are in reality frequently affected by trade
restrictions. The direction of flow of trade, according to some critics of free
trade, is no longer determined by a country's natural comparative advantage.
Rather, a country can create relative advantage by relying on outsourcing and
other trade barriers such as tariffs and quotas (Porter 1998). Therefore,
protectionism can alter the trade patterns as described by trade theories.
Despite these limitations, however, the theory of comparative
advantage does demonstrate that trade between countries can lead to
increases in world output and can be mutually beneficial to all nations of the
world.
24
2.2.1.2
Product Life Cycle Theory
The theory of comparative advantage is a classical explanation of world trade.
In the 1960s, researchers Richard Vernon and Louis Wells, Jr. at the Harvard
Business School offered a new explanation of international trade and
investment patterns. The new approach uses the concept of product life cycle
(PLC) in marketing and traces the roles of innovation, market expansion,
comparative advantage, and strategic responses of global rivals in
international production, trade and investment decisions (Vernon 1966).
According to Richard Vernon’s theory, the international product life
cycle consists of three stages: (1) new product, (2) maturing product, and (3)
standardised product. In the first stage, the firm develops and introduces an
innovative product in response to a perceived need in the domestic market,
with production initially commencing in the country where its R&D occurred,
typically a developed country. In next stage, demand for the product expands
dramatically as consumers recognise its value and the innovating firm
increases its production to satisfy domestic and foreign demand for the
product. In the last stage, the market for the product stabilises. The product
becomes more of a commodity, and firms are pressured to lower their
manufacturing costs by shifting production to facilities in countries with lower
labour costs. As a result, the product begins to be imported into the innovating
firm’s home market.
The 1960s also saw the development of a new set of theories of
international trade around the basic concept of technological gap (Hirsch
1965; Hufbauer 1966; Posner 1961). Such theories analysed how product
innovation in one country leads to cumulative technological advantages and to
25
trade advantages. The extent and duration of the trade advantages will
depend on the extent of the cumulative advantages for the innovative firm, on
the speed with which demand for the new product spreads, and on the speed
with which other domestic and foreign firms start imitating the new product.
The product life cycle (PLC) model, which is based on this concept, states
that products go through the following four stages (Wells 1968):
Phase 1: Innovating country export strength builds
Phase 2: Foreign production starts
Phase 3: Foreign production becomes competitive in export markets
Phase 4: Import competition begins in domestic (innovating country)
markets.
The product life cycle theory of world trade holds that advanced
countries like the United States (US) play the innovative role in product
development. Later on, other relatively advanced countries take over the
market position held by the innovative country (Darlin 1988). The secondstage countries would go through the same cycle as did the innovative
country and, in turn, would lose their markets to the next group of countries,
such as third world countries. Thus, a product initially produced in advanced
countries would eventually be produced only in less developed countries, with
the result that the innovating countries would meet the needs for that product
through import from less developed countries (LDCs). This theory establishes
that depending on what stage of a particular industry life cycle stage a country
is in, it will show different levels of market attractiveness at different points of
time. In other words, market attractiveness will be industry specific rather than
only dependent on the overall size of the economy.
26
The PLC theory offered an explanation of the timing, the level, and the
direction of exports and investments. The PLC theory also suggests various
environmental factors that might be useful in the development of international
marketing strategies. Vernon (1966) and Wells (1968) suggested that market
size and level of economic development were important in explaining trade
and investment patterns in the early and middle stages of the PLC, while
factors of production costs are significant in explaining the role of developing
countries in later stages. Some researchers have identified potential problems
with this theory, including a US bias when it was first proposed, and that it is
perhaps best used for consumer durables, synthetic materials and electronic
products, rather than luxury goods and high-technology products (Grossman
& Helpman 1989). Despite these problems, however, the PLC reasoning
appears sound and it continues to be offered as an explanation of trade and
investment patterns (Terpstra & Sarathy 2000).
2.2.1.3
Production Sharing Theory
In the late 1970s, Peter Drucker (1977) introduced a new concept of
international business and trade called Production Sharing. The theory of
production sharing suggests that developed countries will turn to developing
countries where the availability of labour is a major asset. Currently,
production sharing seems to be quite prevalent, and growing at a rapid pace
especially in the East Asian region (Gaulier et al. 2007; Ng & Yeats 1999).
However, it is a new phenomenon for which there are no classical or neoclassical explanatory theories.
27
Production sharing is evidenced through transnational business
integration with relationships made possible by technological and business
forces (Drucker 1977). Production sharing offers both the developed and
developing countries a chance to share their resources and strengths for
mutual benefit. It also provides an explanation of why firms develop their
international marketing strategy for certain countries even if these
international markets are deemed unattractive through more traditional
measures of size and growth.
2.2.1.4
Internalisation Theory
One conceptualisation that has proved popular and successful with followers
of the international business literature is the theory embracing internalisation.
One of its contributors referred to the Theory of Internalisation as the modern
theory of multinational enterprise (Rugman 1997). The internalisation theory
provides an economic rationale for the existence of multi-national corporations
(MNCs) and relies heavily on the concept of transaction costs when
internationalising businesses.
Multinational corporations often serve a market across national
boundaries either by exporting from a production facility located in the country
of the parent firm, or from a third country subsidiary or it can set up production
facilities in the market itself. The sourcing decision rests mainly on the costs
and benefits to the firm, taking into consideration industry specific factors (e.g.
nature of the product), region specific factors (e.g. geographic location),
nation specific factors (e.g. political climate), and firm specific factors (e.g.
managerial ability to internalise) (Rugman 1997).
28
The internalisation theory primarily focuses on the motives and
decision processes within the multinational firm, but the theory is not fully
successful in explaining international production, partly because its efficiency
approach restricts flexibility and applicability. Decisions on international
production, whether related to the location or to the type of involvement, are
strategic decisions and although efficiency elements may play a role, the
strategic aspects are more likely to be prominent (Letto-Gillies 1994).
Nevertheless, this theory supports the fact that international marketing
strategy factors are industry and firm dependent, since it explains that
international firm's marketing strategy, not only to service but also to source
products to service other country markets.
In summary, trade theories provide logical explanations about why
nations trade with one another, but such theories are limited by their
underlying assumptions. Most of the world's trade rules are based on a
traditional model that assumes that (1) trade is bilateral, (2) the exporting
country has a comparative advantage, (3) trade involves products originating
primarily in the exporting country, and (4) competition primarily focuses on the
importing country's market.
However, today's realities are quite different. Firstly, trade is a
multilateral process. Secondly, it is not easy to determine a country's
comparative advantage, as evidenced by countries that often export and
import the same product. Thirdly, trade is often based on products assembled
from components that are produced in various countries. Finally, competition
usually extends beyond the importing country to include the exporting country
29
and third countries. Hence, trade theories should be considered as broad
frameworks that merely describe trade in an ideal situation (Krugman 1983).
Though with its limitations, international trade theories do influence the
development decisions of international marketing strategy, particularly the
economic development and resources endowment measures of each
international market. Thus, it could be argued that the understanding of trade
flows between countries will impact the effectiveness of international
marketing strategy decisions.
2.2.2
Globalisation
The origin of globalisation lies with the rapid growth in world trade since the
1950s and the spread of foreign direct investment led by the US, EEC (now
EU) and Japan in the 1960s (Waters 2001). However, it has only been in the
late 1980s that internationalisation processes have integrated in a more
systematic fashion, covering parameters including cross-country investment,
production, marketing, trade and more general inter-firm alliances and
collaborations (Rodrik 2000).
According to Nulty (1990), this rapid expansion in world trade had been
supported by a 50% increase in foreign direct investment and even more
growth in international stock, bond, and foreign exchange markets. The global
economy is now close to 50% integration versus 25% in 1980 and 10% in
1950 (Heenan 1988a). Countries throughout the world are courting
multinational corporations as never before in the hope of capturing jobs,
technology, capital, and greater economic prosperity (Buckley & Ghauri 2006;
Heenan 1988b).
30
The most significant development in the world economy in recent
decades has been the increasing globalisation of economic activities. It is
emerging as the norm in a growing range of economic activities (Dicken
2003). The world economy is in transition towards a structural shift in
international markets and in the production base of advanced countries
(Feenstra 1998). As stated by Cohen and Zysman (1988), it will change how
production is organised, where it occurs and who plays what role in the
process.
A number of broad forces have stimulated growth in international
competition and widespread globalisation. Early on, Porter (1986) identified
these forces as the growing similarity of countries, fluid global capital market,
falling tariff barriers, technological restructuring, integrating the role of
technology and new global competitors. Today's global economy is genuinely
borderless. Information, capital, and innovation flow all over the world,
enabled by technology and fuelled by the consumer's desire for access to the
best products and services.
In a globalised economy, there are implications for marketing. Due to
the globalisation influence, international marketers will find more opportunities
for global branding and the advantages it delivers, such as greater economies
of scale and broader appeal to globetrotting consumers (Dailey & Carley
2003).
This globalisation effect is also fuelled through webs of strategic
alliances. According to Naisbitt (1994) one of the reasons for the growth of
strategic alliances is the need for firms to remain flexible so they are more
capable of adjusting to changing market conditions. The author argued in
31
favour of the paradox, "the bigger the world economy, the more powerful its
smallest players" (Naisbitt 1994, p. 12).
Increasingly, global firms are trying to achieve synergy through
coordinated marketing efforts. "From a firm or organisational based
perspective globalisation entails the international expansion and integration of
key corporate functions such as production, marketing and R&D, as well as
the growth in international collaboration and networking with other firms and
institutions" (Howells & Wood 1993, p. 3).
As the intensity of global competition increases, many firms are forced
to re-evaluate their niche in the world market place. For some firms, this
revaluation results in strengthening their domestic position against competing
foreign products. Other firms respond by aggressively expanding their
operations into foreign markets. For many, collaborative agreements with
other businesses are an effective alternative to the more traditional
approaches. These partnerships, which can extend to strategic alliances, may
be viewed as an intermediate position between a focus on domestic markets
and full-scale global operation (Doz 1987).
Management's
assumptions
or
beliefs,
both
conscious
and
unconscious about the nature of the world, also affect the development of an
organisation’s international marketing strategy and their response to
globalising its operations. The worldview can be described as ethnocentric,
polycentric, regiocentric or geocentric (Keegan & Green 2007; Muhlbacher et
al. 1999).
Management personnel at a firm with a prevailing ethnocentric
orientation may consciously make a decision to move in the direction of
32
geocentrism. A person who assumes that his or her country is superior to the
rest of the world is said to have an ethnocentric orientation. At some firms, the
ethnocentric orientation means that opportunities outside the home country
are ignored. Ethnocentric firms that do conduct business outside the home
country can be described as international firms. They view foreign operations
as being secondary or subordinate to domestic ones (Keegan & Green 2007;
Muhlbacher et al. 1999).
The term polycentric describes management's belief or assumption that
each country in which a firm does business is unique, thus presenting an
opposing view to ethnocentrism. This assumption lays the groundwork for
each subsidiary to develop its own unique business and marketing strategies
in order to succeed; the term multinational firm is often used to describe such
a structure (Keegan & Green 2007; Muhlbacher et al. 1999).
In a firm with a regiocentric orientation, management views regions as
unique and seeks to develop an integrated regional strategy. A firm with a
geocentric orientation views the entire world as a potential market and strives
to develop integrated world market strategies. A firm whose management has
a regiocentric or geocentric orientation is referred to as a global or
transnational firm (Keegan & Green 2007; Muhlbacher et al. 1999). Several
researchers suggest that many firms are seeking to strengthen their regional
competitiveness rather than moving directly to develop global responses to
changes in the competitive environment (Morrison et al. 1991; Schlie & Yip
2000).
Given the trend towards globalisation, a firm needs to establish
whether its approach to international marketing will be local or global, and the
33
extent of standardisation as opposed to differentiation of its offering for each
foreign market and between its domestic and its overseas markets. An
appreciation of both the micro advantages and macro disadvantages of
globalisation needs to be considered in the context of the firm’s international
strategic development (Fletcher & Brown 2005).
The above discussion on globalisation identifies several important
factors to be considered in the development of international marketing
strategy. Some of the most important factors to consider are: (1) growth in
international competition with the world economy shifting towards international
markets, (2) global branding for broader appeal and economies of scale, (3)
potential of achieving synergy through coordinated marketing efforts, (4)
consideration of management’s assumptions or beliefs when globalising its
operation, and (5) establishing whether the organisation’s approach to
international marketing will be local or global, and the extent of
standardisation as opposed to differentiation of its offering.
2.2.3
Management Decision Making Models
Managers have various approaches to decision making depending on the
particular situation (Robbins et al. 2006). In general, decisions can be either
programmed or non-programmed (Pugh 1997; Simon 1977).
Programmed decisions usually involve highly repetitive and routine
problems in which the procedures for decision making are well established,
applied frequently, easily triggered and require immediate action made by
middle to lower groups within an organisation (Lawson & Shen 1998; Simon
1997). In contrast, non-programmed decisions are used when predetermined
34
decision rules are impractical, as in novel or ill-structured situations (Bass
1983). Most managerial decisions are non-programmed and involve
significant uncertainty (Bartol et al. 2004; Lawson & Shen 1998; Robbins et al.
2006; Simon 1997).
The proportion of non-programmed decisions that managers make
increases at each hierarchical level (Bartol et al. 2004). Because these
decisions require effective decision making skills and creativity, they provide
the biggest challenge to managers. Larrick (1993) points out that preferences
for risk or certainty arises not only from the perceived value of outcomes and
their probability, but more importantly from the belief that the outcomes will
enhance or erode one's self-esteem and efficacy as a decision maker.
In general, most people believe that they reason clearly, exercise
sound judgment and make decisions rationally and logically. However, many
investigators have identified a number of systematic errors and fallacies that
people tend to commit when thinking and making decisions (National Advisory
Mental Health Council 1996).
For example, people are influenced by whether a choice is framed in
terms of gains or losses. Similarly, people often take risks because they do
not assume that they will have to suffer the consequences. Thus, people's
choices are often unduly tilted in the direction of what they want to believe, the
confirmatory bias effect. Lastly, in making decisions, people tend to overestimate how many other persons agree with their attitudes and beliefs, a
judgmental bias known as the false-consensus bias (Larrick 1993). It is
important to be aware of these forces that moderate decision-making so
35
decision-makers can appreciate the value of both the rational, objective forces
and the cognitive and affective forces that will shape the decision.
Larrick (1993) noted that people usually respond to the emotional
consequences of decision making, which were reflected in their feelings of
success or failure, enhanced or lowered self-esteem and self-efficacy, elation
or disappointment. According to Josephs, Larrick, Steele and Nisbett (1992),
when feedback on a decision is poor, people often feel regret, which can
tarnish their self-image and lead to self-doubt about the wisdom of the original
decision. In this regard, risk preferences are shaped by the motivation to
protect one's self-image.
Josephs et al. (1992) reported that when faced with risky decisions,
persons with low self-esteem were more risk averse when they expected
feedback on their decisions, whereas persons with high self-esteem never
made regret-minimising choices. It appears, then, that the ability to maintain a
good self-image in the face of regret is an important determinant of a person's
preference for taking risks. Moreover, Browne (1993) and Harrison (1999)
suggested that decision-making involves perceived, rather than objective,
measures of risk.
Larrick (1993) suggested that primarily cognitive forces determine risk
preferences when a given decision poses little or no threat to self-esteem.
However, as the potential of a threat to self-esteem increases (for example,
when one regrets an earlier, publicly made, decision), risk preferences are
determined mainly by the motivation to protect and enhance one's self-image
and self-esteem.
36
Thus multiple internal human forces are manipulated by external
factors. All of this will then determine the capacity of a decision maker to
undergo the process and arrive at an appropriate solution. When considering
the impact that such societal and individual forces will have on decisionmaking it becomes clear that the social system will fundamentally impact the
quality of the decision-making.
Hence, the interdisciplinary aspects of decision-making are best
illustrated within the framework of proposed models. Such models show
graphically how much emphasis applicable disciplines receive in decisionmaking. Moreover, models represent a particular segment of the real world at
a given time and place under varying conditions. Such a model should enable
the decision maker to predict real-world phenomena with valuable consistency
and accuracy.
Browne (1993) and Harrison (1993) point out that there are four
decision models. These are the rationality, bounded-rationality, political
models and process models, as shown in the Table 2.1, and briefly discussed
in this section.
Table 2.: Interdisciplinary Models of Decision-making
Model
Rational
(classical)
Criterion
Maximised
outcome
Key Ingredients
Objectives: specific states of
nature; subjective
probabilities; quantified
utilities; exhaustive
alternatives; computational
decision-making strategy;
short-term horizon; highly
structured process
37
Key Assumptions
Fixed objectives unlimited
information, no cognitive
limitations; no time and cost
constraints; quantifiable and
controlled variables; closed
system; quantitatively limited
outcomes
Model
Criterion
Key Ingredients
Key Assumptions
Organisational
(neoclassical)
Satisficing
outcome
Objectives: general states of
nature limited subjective
probabilities; partially
quantified utilities; nonexhaustive alternatives;
sensitive environment;
judgmental decision-making
strategy; short-term horizon;
moderately structured
process
Attainable objectives: limited
information; cognitive
limitations; time and cost
constraints; partially
quantifiable and intransitive
alternatives; open system;
qualitatively and moderately
quantitatively limited
Political
(adaptive)
Acceptable
outcome
Objectives: general states of
nature; no probabilities;
unquantifiable utilities; nonexhaustive alternatives;
dominant environment;
compromise or bargaining
decision-making strategy;
restricted number of
outcomes; short-term horizon;
incremental steps; loosely
structured process
Limited objective: unlimited
information; no cognitive
limitations; no time and cost
constraints; non-quantifiable
and generally transitive
alternative; open system;
environmentally-limited
outcomes; no "right" decision
Process
(managerial)
Objectives
oriented
outcome
Objectives: general states of
nature; generally subjective
probabilities; objectivesoriented utilities; exhaustive
alternatives; sensitive to
environment constraints;
judgemental decision-making
strategy with selective use of
computation and
compromise; long-term
horizon; limited number of
outcomes; highly structured
process
Highly dynamic objective:
limited information; cognitive
limitations; time and cost
constraints generally nonquantifiable and intransitive
alternatives; open system;
sequential decision-making
functions; objective-oriented
outcomes
Source: Adapted from Harrison (1993)
2.2.3.1
The Rational Model
The Rational Model is the classical approach in the field of decision theory. It
is based on the assumptions that decision makers are entirely rational and
seek the best or most effective alternatives that consistently maximise value
within the specified constraints of a given problem (Browne 1993; Langley
38
1989; Simon 1986). Their aim is making optimal decisions on the basis of a
careful evaluation of alternative course of actions.
This model provides the foundation for the quantitative disciplines of
economics, mathematics and statistics (Bartol et al. 2004). Indeed, the
Rational Model is the main reason many people regard decision making as
essentially quantitative (Harrison 1993).
The Rational Model explicitly presumes that if a given variable cannot
be assigned a numeric value, it should be disregarded or assumed away as a
constant or given value. It is a model that operates within a closed
environment with a single fixed objective and precise number of variables. It
views the decision-making process as a linear, sequential series of activities
(Harrison & Harrison 1999; Minkes 1987) as depicted in Figure 2.2.
Figure 2.: The Rational Decision-making Model
Define the Problem
Identify the Decision Criteria
Allocate weights to the Criteria
Develop the Alternatives
Evaluate the Alternatives
Select the best Alternative
Source: Adapted from Harrison and Harrison (1999)
39
It involves diagnosing and defining the problem, identifying the decision
criteria by gathering and analysing the facts relevant to the problem, allocating
weights to the previously identified criteria, developing and evaluating
alternative solutions and selecting the best alternative (Harrison & Harrison
1999).
In general, individuals and organisations aspire to make as many
decisions as possible on the basis of rational considerations. However,
obstacles such as constraints on resources, the nature of the organisations,
and limited information that can be assembled and processed by the decisionmaking group within a given time can hinder it from doing so.
The Rational Model is based on the assumption that all the significant
variables in a given decision-making situation can be quantified to some
degree. It further assumes that decision makers have complete information
about the opportunity or problems, have complete information about all
alternatives and the consequences of selecting one alternative over another,
and make a decision solely on the basis of expectations about future
outcomes, rather than on power or political considerations (Harrison &
Harrison 1999).
Thus, the Rational Model is of limited use in most real-world
managerial decisions involving high level of uncertainty. This model may have
limited applicability in making operational decisions characterised by high
levels of certainty in their outcomes or in conducting academic instruction to
illustrate
hypothetical
relationships
among
variables.
40
selective
decision-making
2.2.3.2
The Bounded Rationality Model
This model, also referred to as the Organisational Model, has been put forth
as a more accurate description of how decisions are actually made in many
organisations (Cyert & March 1963; March & Simon 1993; Simon 1955;
1997). A fundamental assumption of this model is that decision makers
behave rationally within the constraints of their cognitive capabilities to attend
to, and define, the problem and gain information about alternatives.
In other words, decision makers aspire to make optimal choices but are
limited by the many boundaries to rationality, including the following:
(1)
Decision makers lack the cognitive resources to maximise,
(2)
Do not know the relevant probabilities of outcomes,
(3)
Rarely evaluate all outcomes with sufficient precision, and
(4)
Decisions may be based on criteria other than the rational and logical
evaluation of information, such as consideration of member's
preferences and coalitions in the organisation (Simon 1977; 1997).
As a consequence of the cognitive constraints of not being able to
gather and process all the possible information, decision makers satisfice
rather than optimise by selecting the alternative that appears good enough to
solve the problem (Simon 1977; 1997).
The Bounded Rationality Model tends to be eclectic in that it combines
the behavioural disciplines with quantitative analysis to arrive at an outcome
that fits the constraints caused by the external environment (Harrison 1993).
This model is similar to the Rational Model, and like the Rational Model, this
model is best suited for decisions made using relatively stable, routine
organisational processes with a high level of certainly on the outcome, so
41
decision making within this model is normally made at lower levels in the
organisation (Harrison 1993).
According to Simon (1955; 1977; 1997), there are five significant
deviations from the Rational Model which reflect the behavioural aspects of
managerial decision making in organisations.
(1)
Factored decisions: managerial decisions are often so complex that
only a limited number of their aspects can be attended to at a time.
Thus, managerial decision makers must divide decisions into a number
of roughly interdependent parts and deal with the parts one by one
within the various units of the organisation.
(2)
Satisficing outcome: Maximising outcomes, which is characteristic of
the rational model, is replaced by the satisficing of outcomes in the
organisational model.
(3)
Search: Organisations generate alternatives by relatively stable,
sequential search procedures.
(4)
Uncertainty avoidance: Uncertainty tends to be avoided by making
choices, which emphasise short-run feedback to provide for timely
changes in emerging outcomes which appear to diverge from the
objective at hand.
(5)
Repertoires: Organisations tend to have second and third alternatives,
which may be implemented if feedback indicates that a presumed
satisfying choice is not yielding a desirable outcome (Simon 1955;
1977; 1997).
As shown in Table 2.1 on page 37, this Organisational Model
represents a significant departure from the classical model. Fixed objectives
42
are replaced by attainable objectives, which may be scaled downward if the
search does not reveal adequate alternatives. The Organisational Model
acknowledges the constraints of limited information, cognitive limitations and
time and cost limitations. As such, the Organisational Model introduces the
disciplines of philosophy, psychology and sociology into the decision-making
situation. This model is open to environmental influences and accepts
outcomes on their qualitative as well as their quantitative merits (Simon 1977;
1997).
2.2.3.3
The Political Model
The Political Model suggests that decisions result from bargaining by
individuals or coalitions, rather than from the operation of routine
organisational information gathering and processing (Harrison 1993). Cyert
and March (1963) argued that organisations should be understood as
consisting of shifting coalitions that form and reform around issues of concern
to them and their view recognises the role of conflict and conflict resolution in
the decision-making process.
Accordingly, decision-making is a matter of seeking a solution that is
acceptable to all parties and following a strategy of incrementalism in search
of what is possible, rather than what is optimal or satisficing (Harrison 1993).
This model is almost totally behavioural in its orientation (Lawson &
Shen 1998). The primary criterion for decision-making in the Political Model is
an outcome that is acceptable to many external constituencies. Consequently,
the Political Model employs a bargaining or compromise decision-making
strategy.
43
This incremental approach to decision-making limits the definition of
the problem, the information search processes, the number of alternatives
and the number of participants to only those who have a stake in the outcome
and power either to block or implement the decision. Harrison (1999) and
Browne (1993) noted that political decision-making usually includes:
(1)
Considering only alternatives that differ slightly, marginally, or
incrementally from existing policies or practices,
(2)
Considering a small number of alternatives and only those with limited
consequences,
(3)
Continually massaging or redefining the problem and alternative to
make the decision acceptable to all parties, and
(4)
Focusing on short term problems.
The Political Model of decision-making is characteristic of most
organisations in the public sector and seems unlike to be used widely in the
private sector (Harrison 1993).
2.2.3.4
The Process Model
In the Process Model, decision-making has a strong managerial emphasis
and its objectives are focused on achieving outcomes. This model is suitable
when decisions are made in a climate of uncertainty on the outcome. Such
decisions include those made at mid and senior levels of management both in
the private and the public sectors where the consequences are of a high level
of significance to the organisation (Harrison 1993).
Moreover, the Process Model is ideal for these kinds of decisions
because it is forward looking in that it has a planning emphasis not apparent
44
in the other models of decision-making (Elbing 1978). Harrison (1993) also
points out that the Process Model is oriented towards innovation and
organisational change with a particular emphasis on long-term results. It relies
principally on the judgement of the decision maker, but not on the exclusion of
computation or compromise to fit special decision-making situations. It
enhances the role of all types of decision-making (Harrison 1993).
Research has shown that the Process Model is a primary contributor to
decision success (Harrison 1993). The net result of its initial adoption or its
selective emphasis should be decisions that are more likely to attain
managerial objectives and fulfil organisational purposes.
Harrison and Harrison (1999) and Drucker et al. (2001) noted that the
components of the decision-making process model include the following
functions:
(1)
Setting managerial objectives
(2)
Searching for alternatives
(3)
Comparing and evaluating alternatives
(4)
Choosing the decision
(5)
Implementing the decision
(6)
Following up and controlling the decision
In summary, each of the models is designed to take the personal and
social impacts of decision-making and process them into stages such that
each can be independently analysed. The models however are based on
general societal characteristics rather than specific situations. Consequently,
they cannot be readily applied where the personal and social forces are
inconsistent with the models’ assumptions.
45
However, according to Courtney (2001), the decision making process
is moving towards a new paradigm in today’s environment where there is an
overwhelming amount of data to examine with emphasis towards considering
many other viewpoints than just the technical perspective. Rather than simply
analysing the technical perspective, this new process advocates developing
different perspectives as insights are gained and updated with the creation of
tacit knowledge and learning taking place.
Thus, in light of the development of international marketing strategy,
one factor that is anticipated to play an influencing role in management
decisions is the overall feel about certain international marketing strategies;
whether the market data evaluated are consistent with management's overall
feel or not, will play a decisive role in its development process. Therefore, it is
argued here that the understanding of management decision making process
and theories will have impact on the effectiveness of international marketing
strategy decisions.
2.2.4
Strategic Management
Strategy is defined in the Oxford English Dictionary (1993, p. 3085) as “the art
or skill of careful planning towards an advantage or a desired end, and a plan
for successful action based on the rationality and interdependence of the
moves of opposing or competing participants”. In the business context, it can
be defined as “those decisions which have high medium-term to long-term
impact on the activities of the organisation, including the implementation of
those decisions, to create value for customers and key stakeholders and to
outperform competitors” (Hubbard 2004, p. 1).
46
Strategy relates to decision making and its implementation. It is about
long term impacts of important decisions for the organisation, and the
integration and focus of business functions. Strategy is also related to
outperforming competitors and creating value for customers and key
stakeholders (Hubbard 2004).
Strategy is a deliberate, structured process by which a business
searches and analyses its environment and resources in order to (1) select
opportunities defined in terms of markets to be served and products to serve
them and (2) make discrete decisions to invest resources in order to achieve
identified objectives (Bower 1970; Mintzberg et al. 2002).
The early concept of strategy according to Henry Mintzberg has many
dimensions and approaches. These include Strategy as a Plan, Strategy as a
Ploy, Strategy as a Pattern, Strategy as a Position, and Strategy as a
Perspective (Mintzberg 1987). Strategy is a plan: a consciously intended
course of purposeful action, a set of guidelines to deal with a situation. As a
plan, a strategy can be a ploy, as being a specific manoeuvre intended to
outwit an opponent or competitor. Strategy as a pattern in the sense of
consistency in actions, activities and behaviour, whether or not intended.
Strategy as a position means the way organisations position themselves to
the competition and locating the organisation in what management theorists
term as an environment. By this definition, strategy becomes the mediating
force or match, according to Hofer and Schendel (1978), between firm and
environment; that is, between the internal and external context. Strategy as a
perspective has its content consisting not just of a chosen position, but of an
ingrained way of perceiving the world. Many management scholars have used
47
terms such as the theory of the business and its driving force (Drucker 2007;
Tregoe & Zimmerman 1983) to explain this phenomenon.
Much of the current literature in international marketing and strategic
marketing does in general portray international marketing strategy as a plan, a
pattern, a ploy, a position, and as a perspective (Bennett & Blythe 2002;
Bradley 2005; Doole & Lowe 2008; Fifield & Lewis 1998; Jeannet &
Hennessey 2004). This literature directs marketers to consider market and
industry factors in the development process, as well as the matching aspect
between the firm’s internal factors and its external environment.
Michael Porter stated that “the essence of strategy is choosing to
perform activities differently than rivals do” (Porter 1996, p. 64) and “strategy is
the creation of a unique and valuable position involving a different set of
activities [from competitors] … creating a fit among a company’s activities”
(Porter 1996, p. 68). This supports the view of defining strategy as a ploy, a
specific manoeuvre designed to outwit competitors and strategy as a position
which is consistent with Porter’s view of strategy in terms of his generic
strategies which can be applied to broad or narrow markets.
Porter's (1985) framework of generic strategies constitute strategies
that are widely applicable across industries regardless of technological base,
nature of competition, industry life cycle, number of competitors and
geographical spread. Porter believed there are two “basic types of competitive
advantage a firm can possess: low cost or differentiation” (1985, p. 11).
Combining these with a firm's scope of activities provides three general
competitive strategies for above average performance in an industry: cost
leadership, differentiation, and focus.
48
In order to maintain sustainable competitive advantage necessary to
achieve growth, Porter (1990b) proposed that an organisation should adopt
any one of the three generic strategies. However, each poses particular
challenges for organisations in international markets:
(1)
Cost leadership requires the business to establish a lower cost base
than its local or international competitors. The sources of cost
advantage may include proprietary technology, economies of scale,
access to raw materials and process design. This strategy utilises its
low-cost advantage to attract customers by offering lower prices while
maintaining industry comparable returns. Particularly for SMEs and due
to their limited financial resources, they are vulnerable to either local
firms or larger multi-nationals temporarily cutting prices to force the firm
out of the market as they tend to spend little on marketing activity.
Alternatively, instability in the economic climate or fluctuations in
currency exchange rates can result in newer, lower priced competitors
emerging.
(2)
Differentiation is achieved through emphasising particular benefits in
the product, service, or marketing mix, which customers think are
important and a significant improvement over competitive offers.
Organisations that achieve and sustain such a difference will be an
above-average performer in its industry if its price premium exceeds
the extra cost incurred in being unique. Whilst most organisations are
flexible, adaptable and responsive to customer needs, the cost of
maintaining high levels of differentiation over competitors in a number
49
of international markets can be demanding of management time and
financial resources, especially for SMEs.
(3)
Focus is when the firm concentrates on one or more narrow segments
in the industry and thus builds up specialist knowledge of each
segment. Typically, this strategy necessitates high levels of customer
and technical service support which can be resource intensive. Unless
the organisation has created a highly specialised niche, it may be
difficult to defend against local and international competition (Porter
1990a).
Despite the fundamental importance of Porter’s generic strategies,
surprisingly there is little research evidence about their success. Studies
during the 1990s tended to conclude that they are contingent upon the
operating environment (Chan & Wong 1999) and that some researchers
believe that a combination of strategies is possible (Kim & Mauborgne 2008;
Miller & Dess 1993; Ridderstrale & Nordstrom 2008). They suggest that the
original either/or choice is just one of the choices possible.
“A strategy of a corporation forms a comprehensive master plan stating
how the corporation will achieve its mission and objectives. It maximises
competitive advantage and minimises competitive disadvantage” (Wheelan &
Hunger 2007, p. 16). The essence of creating competitive advantage and
outperforming competitors, which is the aim of strategy, is to create superior
value for the customers with activities carried out by the organisation using its
superior resources and capabilities.
Resources can be a source of competitive advantage by themselves,
but it is generally of little use without capabilities. Both resources and
50
capabilities are required to generate strategic capabilities for the organisation
in order to create competitive advantage and provide superior value for the
customers as shown in Figure 2.3.
Figure 2.: Resources, Capabilities and the Creation of Value
Resources
Strategic
Capabilities
Competitive
Advantage
Customer
Value
Capabilities
Source: Adapted from Hubbard (2004)
Furthermore, the resource-based view of the theoretical approach to
strategy argues that all sustainable competitive advantage is built on the
unique resources that the organisation has within it. This resource-based view
was popularised by Prahalad and Hamel (1990) who developed a concept
called the core competence of the organisation. For an organisation to create
a sustainable competitive advantage from its capabilities, these resources
need to be valuable, rare, imperfectly imitable and difficult to substitute.
It is therefore essential in undertaking analysis to identify the
organisation’s core competencies and the long-term market needs it serves,
together with the unique capabilities required to deliver value profitably to that
market. In the development of international marketing strategy, this would
51
mean assessing an organisation's international capabilities to match the
needs of the target market (Muhlbacher et al. 1999).
The issue of competitive advantage as the major driving force in
marketing strategy decision making has been well recognised by many other
researchers (Bharadwaj et al. 1993; Faulkner 2002; Jaworski & Kohli 1993;
Ling-Yee & Ogunmokun 2001; Morgan & Hunt 1999; Slater & Narver 1994;
Woodruff 1997). Firms internationalise to overcome competition and to exploit
their competitive advantages in new markets. Hence, when developing
international marketing strategy, the organisation must consider the firm's
capabilities with market opportunities. The arena of competition must be
chosen with the firm's resources focused on that arena in pursuit of the firm's
objectives (Prahalad & Hamel 1990).
The corporate mission determines the parameters of the specific
objectives to be defined by top management. Wheelan and Hunger (2007)
identified some of the areas in which an organisation might establish its goals
and objectives, which include profitability, market share and growth. These
objectives are listed as the results of planned activities. All these objectives
are also relevant in the international marketing strategy development process.
The concept of a corporate mission implies that throughout the
organisation's many activities, there should be a unifying theme and that
those firms with such a common thread are better able to direct and
administer their activities (Dess 1987). In developing new products, entering
new markets or acquiring new firms, such a corporation looks for strategic fit.
That is, the likelihood that new activities will mesh with the present ones in
such a way that the firm's overall effectiveness and efficiency will be
52
increased. This implies that when developing international marketing strategy,
not only should the international marketing strategy have synergy with the
organisation's existing strategic capabilities, but also synergy with its existing
and targeted markets (Doole & Lowe 2008).
Strategic choices have wide-ranging ripple effects through the
organisation. They determine the key success factors, dictate the programs
and projects to initiate and continue, define the skills and resources to
mobilise or acquire, and shape expectations for profit and growth
performance. In brief, they give meaning and direction to the myriad activities
of the business (Day 2007).
Once the choice is made, the organisation must strive to compete,
survive, and prosper within the forces at work in the chosen marketplace and
within the general profit potential of that market (Hubbard 2004). At the same
time, it must accept that most of its learning, and therefore the character and
value of its resource base, will be shaped by the chosen environment. Both
environment and organisation will evolve and adapt interdependently. It has
been generally accepted in the literature that strategy creates fit between a
firm and its environment (Varadarajan & Clark 1994).
Thus, international marketers when developing their international
marketing strategy should evaluate strategic fit in making their decisions.
Strategic fit in terms of achieving objectives regarding growth, profits and
market share as well as fit between its own practices and those of the target
markets, as business practices of international markets vary widely.
The above discussion on the current relevant literature in strategic
management and marketing strategy identifies important factors to be
53
considered in the development of international marketing strategy. Some of
the most important dimensions to consider are: (1) consideration of
competition and the organisation’s competitive advantages, (2) potential of
achieving competitive advantage through relationship building and alliances,
(3) assessment of the organisation’s own competencies and finding a fit with
the target markets, (4) assessment of fit between the organisation’s objectives
regarding market share, growth and profit, and (5) finding synergy with the
organisation’s strategic capabilities as well as with its existing and targeted
markets.
2.2.4.1
Strategy Development Process
An organisation’s strategy normally starts with a clear intended plan, after
analysing the various environmental, industry and organisational factors,
discussing them with other managers, and expressing them in a formal plan
(Hubbard 2004). This is the intended strategy which is an expression of the
desired strategic direction deliberately formulated and planned by managers
(Mintzberg et al. 2008).
This intended strategy development process can be achieved with
strategic planning, as often, strategy development is equated with formalised
strategic planning systems (Bradford & Duncan 1999; Bryson 2004; Haines
2000). However, the practice of top-down strategic planning seems to be
declining in recent years with the shift to line managers taking responsibility for
their strategy development (McLarney 2003). The development process of
intended strategy can also be accomplished by holding strategic workshops
54
with project groups, engaging outside strategy consultants and/or imposed
externally by powerful external stakeholders (Johnson et al. 2005).
On the other hand, the development process of emergent strategy as
the realised strategy occurs as a result of daily routines, activities and
processes within the organisation that give rise to decisions that become the
long-term direction of that organisation (Mintzberg & Waters 1985).
The organisational processes that might account for the development of
emergent strategy are logical incrementalism, resources allocation routines,
cultural processes and political processes (Johnson et al. 2005).
Logical incrementalism according to Quinn (1980) involves “learning
from partial commitments rather than through global formulations of total
strategies” (Quinn 1980, p. 58). That is, emergent strategy is developed by
experimentation which relies on the social processes within the organisation to
sense environmental changes and try out new ideas.
Resources allocation routines on the development process of emergent
strategy on the other hand, identify the process in which strategy emerges in
organisations through formalised routines and systems of the organisation.
That is, strategy develops as the outcome of resource allocation routines in
organisations, sometimes known as the Bower-Burgelman explanation (Bower
1986; Burgelman 1983a). This development process was also found to be
similar in other later studies in this area (Noda & Bower 1996).
Organisational
culture
and
politics
also
influence
the
strategy
development process. The culture of an organisation has a strong impact on
the emergent and incremental development of strategy through the way things
were done around here. This in effect is organisational culture driving the
55
strategy and hence influencing the strategy development process (Mintzberg
1994).
This was confirmed by a study by Menon et al. (1999) which found that
innovative culture is the fundamental antecedent of effective marketing
strategy making and that strategy creativity directly affects market
performance of an organisation. This implies that organisational culture and
managerial creativity are important attributes in the development of strategy.
Power politics in an organisation can also have a serious effect on the
strategy development process through the outcome of the processes of
bargaining and negotiation among powerful internal and external interest
groups or stakeholders (Buchanan & Boddy 1992).
Within all these processes, individuals do seem to play an important part
in strategy development. Strategic leadership from the CEO, business founder,
and top management influence the development of strategy through their
vision. Such visionary capacity can be explained in terms of their intuition.
Research indicates that this capacity of managers to use their intuition in
decision making also plays an important role in strategy development (Clarke &
Mackaness 2001).
As can be seen, different explanatory theories as to the nature of the
strategy development process have been advanced. Rather than assume a
unitary explanation of the strategy development process, it is recognised that
the process is likely to be multifaceted (Eisenhardt & Zbaracki 1992). Much
literature in the field emphasises a deliberate process of managerial choice
(Bailey & Johnson 1995; Bailey et al. 2000; Hart & Banbury 1994). In the
Bailey and Johnson (1995) research on the strategy development process,
56
the three broad approaches to strategy development: (1) strategic choice, (2)
social processes, and (3) environmental factors are split into six distinct
dimensions. In their studies, these are labelled as command, planning,
incremental, political, cultural and enforced choice.
Table 2.2 summarises the characteristics of these six dimensions,
citing studies examining each of the dimensions which are related to other
models of strategy development, most notably to Hart and Banbury’s (1994)
five dimensions of strategy development, labelled as command, rational,
transactive, generative and symbolic, which correspond closely to Bailey and
Johnson’s (1995) command, planning, incremental, political and cultural
dimensions.
Table 2.: Characteristics of Six Dimensions of Strategy Development
Command
Description
Key References
A particular individual is seen to have a high degree
of control over the strategy followed; for example
the chief executive or a similar figure with
institutionalised authority. Less commonly, such
influence may relate to the power of a small group
of individuals at the top of the organisation. Control
and influence may be exercised in different ways,
for example through personality, the rigid
enactment of rules or through expertise.
Alternatively, strategic aspirations and strategy may
emerge from a vision associated with the powerful
individual(s), which represents the desired future
state of the organisation.
(Bourgeois & Brodwin
1984)
57
(Bennis & Nanus
1985)
(Shrivastava & Grant
1985)
(Westley & Mintzberg
1989)
(Kotter 1990)
Description
Planning
Incremental
Political
Cultural
An intentional process involving a logical,
sequential, analytic and deliberate set of
procedures. The organisation and its environment
are systematically analysed. Strategic options are
generated and systematically evaluated. Based on
this assessment, the option is chosen that is judged
to maximize the value of outcomes in relation to
organisational goals. The selected option is
subsequently detailed in the form of precise
implementation plans, and systems for monitoring
and controlling the strategy are determined. There
is an assumption here that strategy is developed by
top executives and implemented by those below.
Strategic choice takes place through 'successive
limited comparisons'. Strategic goals and objectives
of the organisation are not likely to be precise but
general in nature. The uncertainty of the
environment is accepted and as such managers
are not able to know how it will change: rather they
attempt to be sensitive to it through constant
scanning and evaluation. Commitment to a
strategic option may be tentative and subject to
review in the early stages of development.
Organisations are political arenas in which
decision-making and strategy development is a
political matter. Differences amongst stakeholders
are resolved through bargaining, negotiation and
compromise. Coalitions may form to pursue shared
objectives and to sponsor different strategic
options. The level of influence these stakeholders
are able to exercise is conditional upon the
organisation's dependency upon such groups for
resources. Further, information is not politically
neutral, but rather is a source of power for those
who control it.
Strategy is influenced by taken-for-granted frames
of reference shared amongst organisational
members. These frames of reference help to
simplify the complexity of situations, provide a
ready-made interpretation of new situations, enable
decisions to be made in a way which makes
contextual sense and provide a guide to
appropriate behaviour. Their usefulness increases
as situations become more ambiguous and the
efficiency of formal decision-making processes
decreases. These frames of reference are
underpinned by routines, rituals, stories and other
symbolic artefacts which represent and reinforce
the organisational culture. These cultural artefacts
embed frames of reference in organisational
activities and provide a repertoire for action; but are
in turn likely to be resistant to change.
58
Key References
(Ansoff 1965)
(Steiner 1969)
(Mintzberg 1978)
(Argenti 1980)
(Rowe et al. 1993)
(Lindblom 1959)
(Mintzberg et al.
1976)
(Quinn 1980)
(Quinn 1982)
(Johnson 1988)
(Cyert & March 1963)
(Pettigrew 1973)
(Hinings et al. 1974)
(Pfeffer & Salancik
1978)
(Wilson 1982)
(Feldman 1986)
(Hickson et al. 1986)
(Weick 1979)
(Deal & Kennedy
1982)
(Schon 1995)
(Gioia & Poole 1984)
(Trice & Beyer 1985)
(Johnson 1987)
(Spender 1989)
Description
Enforced
Choice
Factors in the environment encourage the adoption
of organisational structures and activities which
best fit that environment. These external
constraints may take the form of regulative
coercion, competitive or economic pressures or
normative pressures as to what constitutes
legitimate organisational action. These pressures
limit the role organisational member play in the
choice of strategy. So the strategies an
organisation can follow tend to be common to
organisations within their industrial sector or
organisational field; with changes coming about
through variations in organisations' processes and
systems which may occur unintentionally or through
imperfect imitation of successful structures,
systems or processes.
Key References
(Aldrich 1979)
(DiMaggio & Powell
1983)
(Hannan & Freeman
1989)
(Deephouse 1996)
Source: Adapted from Bailey, Johnson & Daniels (2000)
From the above discussion of the various strategy development
processes and dimensions, several important general points are raised. Firstly,
there seems to be no right way in which strategies are developed. Strategies
developed in an uncertain and fast changing environment are not likely to be
the same when developed in an environment of certainty and little change.
Secondly, the processes of strategy development differ over time and in
difference contexts. The strategy development processes in an organisation
going through rapid changes are not likely to be the same when the
organisation is in a steady state.
Thirdly, the perceptions of how strategies develop will be seen differently
by different people. Senior executives and middle managers of private
businesses, small business entrepreneurs and managers of public sectors or
government and its agencies each see the process of strategy development
differently (Bailey & Johnson 1995).
59
Finally, there are likely to be multiple developmental processes at work.
In fact, there is evidence that organisations that employ multiple processes of
strategy development seem to perform better than those that take a singular
approach (Hart & Banbury 1994).
2.2.5
Marketing Strategy
Porter’s (1985) generic strategy of low cost, differentiation, and focus remain
the dominant influencing strategy decision models in a range of frameworks
guiding strategy decision (Aaker 2007; Day 1999).
Furthermore, Sudharshan (1995) has postulated that marketing strategy
is a function of an organisation’s marketing relationships with their customers
and channel members. According to Jarratt and Fayed (2001, p. 70),
“research has identified a change in emphasis for marketing, with the
marketer of the future being involved in the management of relationships that
underpin customer value creation, and being directly involved in the strategic
processes that create key capabilities underpinning competitive advantage”.
Hence, some researchers are proposing customer relationships as the key
resources in determining the organisation’s competitive position (Pitt & Morris
1995; Webster 1992).
Other marketing scholars (Bharadwaj et al. 1993; Day & Wensley 1988;
Jaworski & Kohli 1993; 1996; Kohli & Jaworski 1990; Narver & Slater 1990;
Slater & Narver 1994) have directed marketing strategy decision makers to
adopt a competitive advantage, organisational market-orientation foundation to
developing marketing strategy, supporting marketing strategy decisions based
on information management and dissemination, organisational skills and
60
resources, and current competitive comparisons. Some literature (Markides &
Williamson 1994; Prahalad & Hamel 1990; Stalk et al. 1992) also suggests
that strategy be re-thought in terms of the key capabilities that can be
accessed through strategic alliances.
Strategic marketing is marketing decisions made within a framework of
corporate inputs, portfolio and finance consideration, and strategic intelligence
synthesis. Marketing strategies are functional strategies developed at the
business unit level by marketing personnel within the marketing department
(Jain 2004). The role of middle management marketers’ increasing influence on
strategic direction resulting in positive impact on organisational performance
was confirmed by Schilit (1987). These roles include championing initiatives
(Hutt et al. 1988), synthesising information (Nonaka 1988), facilitating
adaptability (Burgelman 1983b), and implementing deliberate strategy (Nutt
1987).
The concept of strategic marketing revolves around the 3Cs of
Corporation, Customer and Competition within an external environment of
social, technological, political / legal and economic changes as depicted in
Figure 2.4 on the next page.
61
Figure 2.: Key Elements of Marketing Strategy
Source: Adapted from Jain (2004)
Based on the interplay of the three strategic components of corporation,
customer and competitor, the formulation of marketing strategy requires three
decisions on where to compete; how to compete; and when to compete.
Strategic marketing focuses on choosing the right products for the right growth
markets at the right time. Hence, marketing strategy is the creation of a unique
and valuable position involving a chosen set of activities that are different from
its rivals to achieve its designated intentions (Jain 2004). Thus, marketing
strategies focus on ways in which the business can differentiate itself effectively
62
from its competitors, capitalising on its distinctive strengths to deliver better
value to its customers (Jain 2004).
Marketing strategy places emphasis on long-term orientation with
implications that require greater monitoring of the environment and strategic
intelligence inputs. Other inputs required for making strategic marketing
decisions can come from various stakeholders in the organisation, corporate
culture and the organisational resources. These corporate inputs will assist in
formulating the marketing strategies for a sustainable competitive advantage
for the organisation (Doole & Lowe 2005).
Strategic marketing places emphasis on the varying roles of the different
products / markets. It premises that different products within different product
life cycles serve different purposes and expectations for the business and
therefore require different marketing strategies (Harrell & Taylor 1981). With the
application of the product portfolio approach advanced by Boston Consulting
Group’s portfolio matrix, this is now commonly used to formulate marketing
strategies for different products in different markets (Haspeslagh 1982).
Because marketing strategy interfaces with, and affects the perspectives
of an entire organisation, strategic marketing decision making is closely related
to other functional units, in particular the finance function of the organisation
(Ruekert & Walker 1987). In recent years, frameworks such as the value-based
planning approach have been developed to relate marketing to finance in
making strategic decisions (Almquist & Wyner 2001; Kotler & Keller 2006).
In the development process of strategy, the first step is to consider the
situation analysis and determine issues and opportunities to be addressed.
After this, the business needs to establish their strategic options; that is
63
growth, maintain, harvest or divest (Hubbard 2004). When the business
intends to pursue growth as an option, there are several different approaches
to strategy development and the theories to be addressed include:
Strategies Based on Competitive Advantage
Porter (1985) argued that strategy encompasses two generic options of how
to compete: differentiation or cost leadership. Within this framework, a
business must decide where to compete; that is total market or focus. In
addition, Porter believed these strategies are mutually exclusive - you can
only pursue one or the other. In today's dynamic environment, this may not be
true as some scholars believe that a combination of strategies is possible
(Chan & Wong 1999; Miller & Dess 1993).
Strategies Based on Products and Markets
One way of developing organisational strategies is to focus on the directions
the organisation can take in order to grow. Table 2.3 representing the productmarket matrix presents the available choices of four strategies an organisation
can take in order to grow. It indicates that an organisation can grow by better
managing what it is presently doing or by finding new things to do.
Table 2.: Growth Strategies - Products and Markets
Products
Markets
Present Customers
New Customers
Present Products
New Products
Market Penetration
Product Development
Market Development
Diversification
Source: Adapted from Hubbard (2004)
64
Market penetration focuses primarily on increasing sales of present
products to present customers. That is, getting existing customers to buy
more products or finding new uses. Market development pursues growth
through seeking new customers for its present products. Product development
through new products / improvements or product extensions developed would
be directed primarily to present segments, and diversification can lead the
organisation to an entirely new and even unrelated business. It involves
seeking new products (often through acquisition) for customers currently not
being served by the firm (Hubbard 2004; Jarratt 2006).
Strategies Based on Value
As competition increases, the concept of customer value has become
significant for marketers (Peter & Donnelly 2003). It is an extension of the
marketing concept by going beyond satisfying customer needs. This focuses
not only on customer needs, but on how to create value for customers (Mittal
2001; Rust et al. 2000).
It is unlikely that a business can be all things to all people. Thus, to
succeed, many organisations are opting to build long term relationships with
their customers by offering a unique value that only they can offer (Hubbard
2004). This provides a competitive advantage that is very difficult for
competitors to copy. It appears that many organisations have succeeded by
choosing to deliver superior customer value using one of three value
strategies:
(1)
Best price (termed operational excellence)
(2)
Best product (termed product leadership)
65
(3)
Best service (termed customer intimacy) (Jain 2004)
To summarise, strategic marketing processes are multi-level processes
where the outcomes of decisions are shaped by the interest and commitments
of individuals and groups, the organisational momentum, important changes in
the environment, and the manipulation of the structural context surrounding
decisions rather than a linear progression from strategy formulation to strategy
implementation. These multi-level processes will impact the effectiveness of
international marketing strategy decisions through the 3Cs of Corporation,
Customer and Competition within an external environment of social,
technological, political / legal and economic changes.
2.2.6
International Marketing
Marketing, the parent discipline of international marketing is defined by Kotler
(1999, p. 13) as: “the process of planning and executing the conception,
pricing, promotion and distribution of goods, services, and ideas to create
exchanges with target groups that satisfy customer and organisational
objectives”.
With the flourishing of relationship marketing in the 1900s, this
traditional approach to marketing has, however, been increasingly questioned
in recent years. The new relationship approach, whilst recognising the key
elements mentioned above, reflects the need to create an integrated crossfunctional focus of marketing - one which emphasises keeping, as well as
winning customers (Payne 1995).
More recently the focus of marketing is shifting to embrace both
customer acquisition and customer retention, ensuring that appropriate
66
amounts of time, money and managerial resources are directed at both of
these key tasks. Marketing involves competing through competencies and
capabilities, and building value to customers through managing relationships
that deliver value (Golfetto & Gibbert 2006; Payne & Holt 2001).
As discussed in Section 2.2.5, recent literature suggests an increasing
need for market-led or market oriented marketing strategies to cope with the
changing marketing environment, to provide competitive advantage, and
create value for customers.
Thus, in taking a leading role in the development and the
implementation of strategy, the role of marketing can be re-defined in a way
as shown in Figure 2.5.
Figure 2.: The Role of Marketing in the Organisation
Identify and communicate customer wants and needs
throughout the organisation
Determine the competitive positioning to match the needs
of the customers with company capabilities
Marshal all relevant organisational resources to deliver
customer satisfaction
Source: Adapted from Hooley, Saunders, & Piercy (2004)
The first essential task of marketing is to identify the requirements of
customers and to communicate them effectively throughout the organisation.
This may involve conducting or commissioning relevant customer research to
67
uncover first, who the customers are, and second, what will give them
satisfaction (Hooley et al. 2004).
Recognising that markets are heterogeneous and typically made up of
various market segments each having different requirements, leads to the
need to decide clearly which target market(s) the organisation will seek to
serve (Hooley et al. 2004). That decision is based on two sets of factors: first,
how attractive the alternative potential targets are; and second, how well the
firm can serve each potential target market relative to the competition (Hooley
et al. 2004).
The third important task of marketing is to marshal all the relevant
organisational resources to plan and execute the delivery of customer
satisfaction. This may involve ensuring that all members of the organisation
are co-ordinated in their efforts to manage the relationship and satisfy the
customers (Hooley et al. 2004).
Terpstra and Sarathy (2000, p. 4) defined international marketing as
“finding and satisfying global customer needs better than the competition,
both domestic and international, and of coordinating marketing activities within
the constraints of the global environment”. This definition is still considered in
the traditional context and reflects on how international marketing concepts
are falling behind the developments in the mother discipline of marketing.
Nevertheless, this definition of international marketing very much
retains the basic marketing principle satisfaction (Terpstra & Sarathy 2000).
The fact that transactions take place across national borders highlights the
difference between domestic and international marketing. The international
marketer is subject to a new set of macro environmental factors, different
68
constraints on business conduct and frequent conflicts resulting from different
laws, regulations, cultures and societies. The basic principles of marketing still
apply, but their applications, complexity, and intensity vary substantially
(Terpstra & Sarathy 2000).
Conversely, most scholars on international marketing (Czinkota &
Ronkanien 2006; Fletcher & Brown 2005; Jain 1996; Jeannet & Hennessey
2004; Johansson 2005; Keegan 2001; Keegan & Green 1997; Terpstra &
Sarathy 2000) have agreed that the basic nature of marketing does not
change from domestic to international marketing, but marketing outside
national boundaries does pose special problems as it operates simultaneously
in more than one kind of environment.
In relation to the development of international marketing strategy, there
are four major approaches in which businesses can enter international
markets: (1) direct exporting, (2) licensing and franchising products and
services, (3) entering into joint ventures and affiliations, and (4) establishing
overseas production facilities and/or acquiring foreign firms (Doole & Lowe
2008).
Exporting continues to be important for most firms participating in the
international economy. Exports, however, can be slowed by tariffs and quotas.
Licensing also has drawbacks because licenses can be abused by licensees
who violate the quality control provisions of the license or who sell in markets
not covered by the license. Experienced firms, therefore, tend to establish
their positions in foreign markets through subsidiaries in preference to, or at
least in addition to, exports and independent licensees (Johansson 2005).
69
When the foreign subsidiary approach proves inadequate to provide
the required linkage to overseas markets, technology, and capital, larger firms
also resort to various types of alliances with foreign firms, often including
potential competitors (Vernon & Kapstain 1991).
Thus, in international marketing strategy development, selecting the
most appropriate segment in the overseas markets needs to be carefully
undertaken as does the creative positioning of one’s offering in that segment.
Such strategic development is essential in order to gain competitive
advantage and will require not only identification of competitors and their
relative strengths and weaknesses but also strategies to confront, bypass or
ignore them (Fletcher & Brown 2005).
Furthermore, the creation of networks of relationships, both within and
between each international market, needs to be explored, as in many parts of
the world networks are more powerful determinants of business than the
specific advantages of the offering (Fletcher & Brown 2005). It is argued here
that through the proper implementation of the above international marketing
theories that it will impact the effectiveness of international marketing strategy
decisions.
2.2.7
International Marketing Strategy
As discussed in Section 2.2.1 on International Trade Theories and Section
2.2.2 on Globalisation, two major forces are shaping the global economy
today: political and economic convergence, and market consolidation shaped
by information technology. To survive in this complex, changing technological
and competitive environment with increasing trade liberalisation and
70
deregulation,
businesses
must
adopt
flexible
international
marketing
strategies to compete in the global marketplace.
Businesses that avoid international markets or do not have flexible or
well-developed international strategies often discover that they face
competition not just from aggressive foreign competitors seeking to expand
abroad into local markets, but also from internationally oriented domestic
businesses (Doole & Lowe 2008).
International Marketing Strategy (IMS) considers exploring the many
ways in which businesses, both multinational corporations (MNCs) and small
and medium sized enterprises (SMEs) might progress to become more
committed and effective in international markets. They must respond to the
needs and demands of customers located in many different countries and are
influenced by many different cultures. At the same time, they must cope with
competition and gain competitive advantage in each of their markets (Fletcher
& Brown 2005).
Hence, success in international marketing is achieved through being
able to integrate and appreciate the interaction between various elements of
analysis, development and implementation of the international marketing
strategy development process (Doole & Lowe 2008) as depicted in Figure 2.6
on the next page.
Moreover, several researchers have confirmed that international
marketing strategic issues can contribute significantly to the success of export
marketing performance (Aaby & Slater 1989; Cooper & Kleinschmidt 1985;
Crespy et al. 1993; Julian & Ahmed 2005; Koh 1991; Leonidou et al. 2002;
71
Louter et al. 1991; Lu & Julian 2008; Ogunmokun & Ng 2004; Thirkell &
Ramadhani 1998; Zou & Stan 1998).
Figure 2.: The International Marketing Strategy Process
Understand the environmental influences
on a firm’s international markets
Develop appropriate international
marketing strategies, planning and
control processes
Decide marketing entry strategies
Feedback and reassess continuously
Segment international markets, identify
and analyse opportunities
Build added-value through effective
marketing mix strategies
Using enabling technologies
Source: Adapted from Doole & Lowe (2008)
In the development process of international marketing strategies, Doole
(2000) identified three major components to the strategy of successful
businesses competing in international markets:
(1)
A clear international competitive focus achieved through a thorough
knowledge of the international markets, strong competitive positioning
and a strategic perspective which is truly international.
72
(2)
An effective relationship strategy achieved through strong customer
relations, a commitment to quality products and services and a
dedication to customer services throughout international markets.
(3)
Well managed organisations with a culture of learning. Firms that are
innovative and willing to learn, show high levels of energy and
commitment to international markets and have effective monitoring and
control procedures for all their international markets.
In formulating strategy, the business must distinguish between purpose
and constraints; what it must do in order to survive (Doole & Lowe 2008). The
purpose of most firms evolves over time and some might eventually
encompass the idea of serving customers in the international markets. The
firm's purpose defines the product or services, the markets to be targeted, the
type of positioning to be achieved and the values that guide the organisation's
behaviour. Thus, a well-defined firm purpose gives long-term directional
stability to the organisation and the more focused the purpose is, the more
likely it is that a business will be able to develop a successful strategy.
Strategic approaches to international marketing by some businesses is
through a process of incrementalism based on an opportunistic response to
market development, rather than as a strategic choice to grow profitably
through internationalisation (Bradley 2005). For these businesses competing
in international markets, the reluctance to compete on strategic terms rather
than on the basis of increments is understandable. Strategic success depends
on an understanding of the culture and competitors in the foreign market and
the possession of positive perceptions within the organisation. As such, this
73
evolutionary and expedient process results in small changes which produce
short-term results without long-run consequences (Bradley 2005).
In contrast, the requirement for firms seeking to survive in international
markets is to adopt a revolutionary or strategic perspective on international
competition (Mitchell & Bradley 1986). This strategic approach implies that
there are uncommitted resources in the organisation that may be dedicated
permanently to uses that have a long-term reward. It also implies that
management has the training and skills to predict risk and return with
sufficient accuracy and confidence to justify the commitment of such
resources. Finally, as stated by Mitchell and Bradley (1986), strategic
competition is comprehensive in its commitment; it involves the dedication of
the whole firm which means that businesses as a whole must act deliberately
to make the commitment to invest in international markets.
Hence, the meaning of strategy for the international firm refers to an
integrated set of actions taking account of the organisation's resources and
aimed at increasing the long-term well-being of the organisation through
securing a sustainable advantage with respect to its competition in serving its
customer needs in domestic and international markets (Bradley 2005).
Therefore, as businesses in international markets operate in an
environment of opportunities and threats, it is necessary to develop
appropriate international marketing strategies configured to compete with
other firms while providing value to customers. In such circumstances, the
firm can respond by developing standardised products or by adapting existing
products to the needs of customers in both domestic and international
74
markets. In general, there are two generic international marketing strategies
as depicted in Figure 2.7.
Figure 2.: Generic International Marketing Strategies
Generic International
Marketing Strategies
Same Strategy
Different Strategy
• existing resources
• avoid market entry barriers
• avoid direct competition
• change strategy / add value
• product-market differentiation
• customisation
• global integration
• global standardisation
Source: Adapted from Bradley (2005).
These generic international marketing strategies include ways of
entering foreign markets that are broadly similar to strategies used in the
domestic market and other strategies adapted for various reasons to the
requirements of foreign markets.
Over the past four decades, marketing scholars have sought to classify
the international marketing strategies of multinational organisations (Keegan
2001; Ozsomer & Prussia 2000; Theodosiou & Leonidou 2003). For the most
part, the literature has characterised international marketing strategy into one
of the three perspectives of standardisation-adaptation, concentrationdispersion, and integration-independence (Zou & Cavusgil 2002).
The most common characteristic of international marketing strategy is
along the standardisation-adaptation perspective (Jain 1989). However, there
75
is considerable debate in the marketing literature on standardisation versus
adaptation or the appropriateness of global versus niche strategies (Bartels
1968; Buzzell 1968; Levitt 1983; Quelch & Hoff 1986; Ryans et al. 2003).
One school of thought argues for a standardised approach to
international markets. A standardisation strategy is characterised by the
application of uniform marketing mix elements (i.e., product design, pricing,
distribution, promotion etc.) across different national markets. Accordingly, a
standardised approach is desirable because a consistency in customer
dealings, product image and exploitation of a universal appeal across different
geographic markets may increase sales (Jain 2004).
Furthermore, costs can be lowered by amalgamating production
activities without sacrificing quality and obtaining economies of scale
associated with developing and implementing a single standardised marketing
plan (Buzzell 1968; Levitt 1983; Szymanski et al. 1993; Walters 1986; Yip
1989). Other supporters of this view include Rutenberg (1982), Henzler and
Rall (1986), Jain (1989), Zou, Andrus, and Norvell (1997), Laroche, Kirpalani,
Pons, and Lianxi (2001) and Chung (2003) who provide various arguments
particularly on scale advantages and consistency in marketing planning and
actions.
On the other hand, an adaptation or differentiated strategy is
characterised by the tailoring of marketing mix elements to the needs of each
market and the differentiated approach argues that because few markets are
exactly alike, it is necessary to adapt the marketing mix to ensure that
sufficient customisation exists to satisfy buyer needs in each market (Quelch
& Hoff 1986; Wills et al. 1991).
76
Other supporters of adaptation or differentiated strategy include
Boddewyn, Soehl, and Picard (1986), Kotler (1986), Douglas and Wind
(1987), Ohmae (1989), Sheth (1986), Albaum and Tse (2001), Leonidou,
Katsikeas and Samiee (2002), O’Cass and Julian (2003), Ogunmokun and
Wong (2004), and Julian and Ahmed (2005) who provide various arguments
revolving around the barriers to marketing strategies standardisation in
international markets, including governmental and trade restrictions, intercountry differences in marketing infrastructure, product usage, pricing and
promotional policies.
Because of the conspicuous amount of debates on both views, the
literature in the 1980s and 1990s began to treat standardisation and
adaptation of international marketing strategy as fixed mutually exclusive
options. As such, several publications during this period (Quelch & Hoff 1986;
Samiee & Roth 1992; Solberg 2000; Szymanski et al. 1993) suggested that
the academic community had come to accept the concept of international
marketing strategy as falling along the line of standardisation versus
adaptation. Hence, this debate between standardisation and adaptation in the
study of international marketing strategy remained largely unanswered.
The second concentration-dispersion perspective is rooted in Porter's
(1986) design framework and reflected in the Craig and Douglas (2000)
Theory of Configural Advantage. Porter (1986) design framework argued that
multinational firms should seek an optimal value-chain configuration by fully
exploiting its scale and national comparative advantages, yet balancing
responsiveness to its local needs. As such, this second perspective is more
77
concerned with the geographic design of the international marketing
organisation (Roth 1992; Roth et al. 1991).
Craig and Douglas (2000) further described the configuration of
marketing value-chain activities of different concentration-dispersion levels,
the development of cross-country learning and market-sensing capabilities
and explained how all these could influence the cohesiveness of the
operational inter-linkages across international markets. With the combination
of these outcomes, it will in turn determine the configural advantage of the
firm.
Therefore,
the
second
concentration-dispersion
perspective
of
international marketing strategy is differentiated according to the extent to
which one or more aspect of the marketing value chain are being consolidated
or concentrated at particular geographic locations, or being scattered or
dispersed across various country markets.
The third integration-independence perspective is heavily influenced by
Hamel and Prahalad (1985). It involved the extent to which the multinational
marketing organisations can orchestrate their competitive moves and
strategies on an international basis like leveraging their competitive position in
one country to achieve an advantage in other countries, such as by crosssubsidising their promotional campaigns across different international
markets.
Thus, the key point of the integration-independence perspective is
whether the multinational marketing organisations treat its subsidiary units as
standalone profit centres (i.e., independently), or as parts of a grander
strategic design (i.e., as integrated group of business units).
78
Up until recently, marketing scholars have been relying on a unidimensional scheme to discuss international marketing strategy, or arguing
about it by means of a single perspective. Noting on this three-fold
perspectives of international marketing strategy, Zou and Cavusgil (2002)
attempted to unify the concept by developing a measure that reflects
international marketing strategy multi-dimensional nature by proposing a
construct, termed the GMS. This construct includes all dimensions of
international marketing strategy spanning the three broad perspectives for any
multinational firm's international marketing strategy.
The GMS concept attempts to create a single aggregate score with the
given degrees of standardisation, concentration, and integration in the
multinational marketing organisation. With the GMS construct and using a
single index, it attempts to capture the overall globalness of an organisation's
international marketing strategy. While this concept has many limitations, it
does represent a significant step toward a multi-dimensional approach in the
study of international marketing strategy (Zou & Cavusgil 2002).
However, it was Lim, Acito, and Rusetski (2006) who proposed a
holistic
and
multi-dimensional
approach
grounded
in
organisational
configurational theory to the characterisation of international marketing
strategy. According to the Configurational Theory of Organisations (Meyer et
al. 1993; Miller 1981; 1986; 1996), a firm effectiveness is a product of superior
combinations of strategic and structural characteristics (Doty et al. 1993;
Ketchen et al. 1997; Miller & Mintzberg 1983). In keeping with this
configurational viewpoint, their approach is grounded on the premise that any
concept of strategy is inherently multi-dimensional, and that various elements
79
of strategy can interact or combine differently in multi-dimensional space (Lim
et al. 2006).
This approach takes into account the different ways in which any given
international marketing strategy can be characterised into multi-dimensional
archetypes,
taking
into
consideration
the
standardisation-adaptation,
concentration-dispersion, and integration-independence perspectives, as well
as consider the overall configurational pattern of the strategy, in terms of its
position along the different dimensions. Hence, to describe international
marketing strategy, Lim, Acito, and Rusetski (2006, p. 503) advocated that
“one must look beyond single strategy dimensions for modal combinatorial
patterns across multiple dimensions”.
Based
on
their
holistic
multi-dimensional
conceptualisation
of
international marketing strategy and combining patterns of eleven theory
based dimensions of standardisation-adaptation, concentration-dispersion
and integration-independence perspectives, three distinct international
marketing strategy archetypes were presented: (1) Global Marketers, (2)
Infrastructural Minimalists, and (3) Tactical Coordinators (Lim et al. 2006).
The Global Marketers have a greater degree of standardisation in
product design, pricing, branding, advertising and sales promotion. It is more
concentrated in its marketing value chain design, particularly in logistics and
distribution channels. At the same time it is more integrated in its competitive
process such as decision making, communication and mutual consultation
across business units in various countries (Lim et al. 2006).
On the other hand, the Infrastructural Minimalists pursue a selective
approach to standardisation, concentration and integration policies with
80
emphasis on the provision of infrastructure to their local units and minimal
inference on their operations. Brand name and channel design are more
standardised. However, advertising and sales promotions, pricing and product
design are more localised. Similarly, its product design and development as
well as its distribution and logistics planning functions are concentrated, but its
advertising and promotional planning function is more geographically
dispersed. Finally, they are less integrated in its decision making,
communication and mutual consultation across country units (Lim et al. 2006).
Likewise, the Tactical Coordinators pursue a mixed standardisation
policy where sales promotion tactics are moderately standardised, but its
product design, advertising theme, pricing policy, and especially distribution
channel design are more localised. However, marketing functions like product
design and development, distribution and logistics, and advertising and
promotional planning are more dispersed. It is more integrated in its
competitive process of communication and mutual consultation, but not in its
decision-making process (Lim et al. 2006).
In summary, international marketing strategy issues are key factors
that can affect the performance of exporters in international markets.
International marketing strategy of the multinational marketing organisation
had been characterised by many different viewpoints from a single
dimensional aspect of standardisation-adaptation, concentration-dispersion,
and integration-independence perspectives; to multi-dimensional construct of
GMS using a single index to quantify the overall globalness of its international
marketing strategy, and the categorisation of international marketing strategy
into three distinct archetypes. Thus, it is argued here that an understanding of
81
these international marketing theories will impact the effectiveness of
international marketing strategy decisions.
2.2.7.1
Factors Influencing the IMS Development Process
There seems to be a number of factors influencing the choice and development
of international marketing strategies (IMS). For both MNCs and SMEs, there
are market factors that include the environmental trends, the market and
industry structure, the customer requirements from different countries, the
nature and intensity of local and international competition, and the degree to
which the firm can defend its position (Doole & Lowe 2008; Jeannet &
Hennessey 2004).
Particularly for SMEs, specific firm factors such as availability of
resources, the products / services and its generic strategy that has been
developed, the stage of their internationalisation, and the firm’s capabilities and
its attitude to international development and management of risk are particularly
important in the development process of their international marketing strategy
(Doole & Lowe 2008).
According to Lages (2000), both internal and external factors of an
organisation influence the development of the firm’s international marketing
strategy and affect its export performance. Some of the issues and factors
affecting the development of international marketing strategy for any given firms
are depicted in Figure 2.8 on the next page.
82
Figure 2.: Factors Influencing the Development of International Marketing
Strategy
Ambition and
Objectives
Growth options
& Resources
Competencies
& Capabilities
Attitudes
to Risk
Stage of
Internationalisation
Internal
Company
Factors
Government
Support
Customer
base
Supply
chain
International
Marketing
Strategy
Development
Market and
Industry Factors
Public and
Private Support
Networks
Systems
Support
Competition
External
Environmental
Factors
Socio-Cultural
Political
Legal
Economic
Technological
Source: Adapted from Doole & Lowe (2008) and developed for this research
The ambition and objectives of the organisation have a large influence
in the development of an organisation’s international marketing strategy
(Knight 2000). Strategies that an organisation adopts are also constrained by
its past behaviour and actions, especially its history of past investments and
its operating routines
(Bradley 2005). Management aspirations and
perceptions for internationalisation are believed to be a direct determinant of
the decision making behaviour on strategy development (Axinn 1998).
According to Lages and Montgomery (2004), there exists a positive
83
relationship between export marketing behaviour and the decision maker’s
aspirations. Also, the export market orientation of the organisation has a direct
effect on the firm’s export performance (Akyol & Akehurst 2003).
The business’s resources and core capabilities, particularly those that
are distinctive and superior relative to the competition, may become the basis
of competitive advantage if they are matched appropriately to market
opportunities (Thompson & Strickland 2003) and thus may affect their
international marketing strategy. Business resources provide the organisation
with a comparative advantage that allows it to develop a competitive
advantage in the marketplace. According to Hunt and Morgan (1995), this
competitive advantage in turn introduces the possibility of superior quality in
the organisation’s products and services and superior financial performance.
Research into the impact of the above firm-specific characteristics on
international marketing performance of Australian export market ventures by
Lu and Julian (2008) confirmed that firm-specific characteristics and export
marketing
strategy
significantly
influence
the
international
marketing
performance of these businesses. Other researchers also support this finding
(Christensen et al. 1987; Moini 1995; Thirkell & Ramadhani 1998).
An organisational attitude towards risk also plays an important part in
the development of international marketing strategy (Tse et al. 1988). Risk
refers to general environmental risk such as political risk, government policy
uncertainties, economic, social or cultural environmental uncertainties;
industry risk such as product-market uncertainties, competitive uncertainties,
changing consumer taste, availability of materials and labour supply; and firmspecific risks such as behavioural uncertainty of employees and customers,
84
credit uncertainties and product liability issues. Any decision in one risk area
affects the magnitude of risks and decisions in the other risk areas and thus
influences the development of their international marketing strategy (Miller
1992).
The internationalisation process of an organisation usually occurs in
stages, initially with an export department, then an international division and
finally it becomes a global organisation (Griffin & Pustay 2007). It is closely
influenced by managerial attributes and decisions (Maitland & Nicholas 2002).
An understanding of the significance of management quality and dynamism in
formulating and implementing effective international marketing strategies has
been well established by Cavusgil and Nevin (1981), Cavusgil and Naor
(1987), Cavusgil and Zou (1994) and Lu and Julian (2008).
Furthermore, it would appear that many researchers consistently
recognise management as the principal force behind the initiation,
development, sustenance, and success of a firm's international marketing
effort, due to their direct responsibility for and involvement in international
marketing decisions (Aaby & Slater 1989; Cavusgil & Zou 1994; Julian &
Ahmed 2005; Julian & O'Cass 2004; Leonidou et al. 1998; Lu & Julian 2008;
Misenbock 1988; O'Cass & Julian 2003; Ogunmokun & Ng 2004; Zou & Stan
1998). In particular, top management commitment has also been identified as
imperative to successful business performance in international markets,
particularly during the early stages of internationalisation (Knight 2000;
Madsen 1989). Hence, firms in different stages of their internationalisation
process develop different strategies which eventually affect the development
of international marketing strategy.
85
According to Cavusgil and Zou (1994), international marketing strategy
is influenced by both internal (firm and product characteristics) and external
factors (industry and export market characteristics) and are the key
determinants of export marketing performance. Thus, market and industry
factors will influence the development of international marketing strategy and
its subsequent export performance.
The market and industry factors influencing the international marketing
strategy development process include competition, the customer base and the
supply chain. An understanding of the strategies of current and likely future
competitors, and their strengths and weaknesses, may suggest opportunities
and threats for the organisation which allow it to identify an appropriate
strategic position to adopt (Doole & Lowe 2008).
To establish a strategic advantage over the competition with a viable
international marketing strategy, it is important for the organisation to clearly
define and select the market it intends to serve. This includes segmenting the
market, identifying the customer base within the total market, and
concentrating on meeting their needs (Jain 2004).
There are many different researchers (Daniels & Radebaugh 2007;
Hoffman 1997; Kumar et al. 1993) in this area recommending different
decision frameworks for international market selection. However, recent
research in international market selection with Australian exporters by
Rahman (2001; 2006) highlights that target country’s cost indicators,
structural compatibility indicators and policy indicators are some of the key
factors considered by successful Australian international firms.
86
The supply chain in overseas markets and industry influences the
development of international marketing strategy as distribution networks
available in each international market vary considerably (Doole & Lowe 2008).
Depending on the product and service offerings, this factor could be important
in developing the appropriate international marketing strategy. According to
Ling-Yee and Ogunmokun (2001), this supply chain or channel support were
found to significantly and positively correlate with export performance of the
enterprise.
Motivators such as the presence of existing customers overseas, a fast
growing profitable market, and barriers such as tariffs and quotas also affect
an organisation’s international marketing strategy development process
(Doole & Lowe 2003; Jeannet & Hennessey 2004). Similarly, support
networks, particularly for SMEs, based on personal contacts with family,
friends, and other business associates, as well as government agencies for
support, advice, information and knowledge, have an effect on the
international marketing strategy development process (Doole & Lowe 2008) as
well as on export performance (Leonidou 1995; Moini 1997; Ogunmokun & Ng
2004).
According to Jain (2004), business derives its existence from the
environment. Thus, the external environments have some of the most
important factors that influence the development process of international
marketing strategy. External environmental factors such as socio-cultural,
economic, political, legal and technological have an impact on the strategy
development process (Doole & Lowe 2008; Jain 2004; Jeannet & Hennessey
2004).
87
Cultural
influences
have
also
been
identified
as
significant
determinants of international marketing behaviour and export performance
(Faaborg et al. 2005; Rugimbana & Nwankwo 2003; Thirkell & Ramadhani
1998). International business and especially marketing is seen as a cultural as
well as an economic phenomenon. The elements that go to make up culture
in the international marketing environment include the following: language,
religion, varying attitudes towards time, wealth acquisition, risk taking,
organisation of relationships in the form of social and cultural stratification,
family units, level of education, technology and material, culture development
in general and aesthetic values (Rugimbana & Nwankwo 2003). Through the
analysis of these cultural elements, attempts are made to determine
international modes of behaviour and subsequently influence the international
marketing strategy development process (Steenkamp 2001).
Economic policies are used to influence the allocation of resources in
industrial and commercial sectors so as to achieve structural changes in
capital, labour and product markets, and to assist domestic industries to
respond to international challenges by addressing economic and political
issues (Mclver 2002). Such economic policies in the targeted countries in
some ways have an effect on the adoption of international marketing strategy.
There are two different government (political) policies: the invisible
hand and the heavy interventionist role of government that have an impact on
the development of international marketing strategy (Jain 2004). In the former
approach governments play the role of benign regulators and observers; in
the latter the government supplements market forces. Thus, these two
88
political influences will also affect the way some organisations develop their
international marketing strategy.
The world is in the midst of a series of technological revolutions, so
most industries are affected by technological change (Kotler & Keller 2006).
To cope with this changing technological environment, marketing strategists
must find new ways to forecast the shape of things to come, to analyse
strategic alternatives, and develop strategies with longer term implications
(Jain 2004). Thus, marketers must be able to recognise the limits of their
technology, know what new technologies are emerging, and decide when to
incorporate new technology in their products when developing their
international marketing strategy (Jain 2004).
Apart from specific legislation which comes from political influences,
developments in the legal system can also have an important influence on the
development of international marketing strategy (Bradley 2005). The shift in
focus in a legal and regulatory environment deeply affects the operations of
business, whether domestic or international (Doole & Lowe 2008). According
to Ogunmokun and Ng (2004), the ability to envisage and handle legal
problems in foreign countries was a major attribute in high performing
Australian exporters.
In brief, the development process of international marketing strategy
among international businesses can be affected by a variety of factors
including those discussed in this section, and can be summarise as (1) market
and industry factors in both the domestic and foreign markets, (2) internal
factors of the organisation, (3) external foreign environmental factors, and (4)
public and private support networks in the foreign markets.
89
2.3
Hypotheses Developed from the Literature
The literature review has drawn on some of the relevant literature to determine
how several bodies of knowledge support or contradict current international
marketing strategy development models. Table 2.4 highlights the main factors
generated from the literature review that should be considered in the
development of international marketing strategies. It identifies the bodies of
knowledge of various business disciplines that either directly or indirectly
supports those factors.
Table 2.: Factors to Consider in the Development of IMS
Factors
Market and industry
factors in home and
foreign markets
Directly Supported By
Indirectly Supported By
Strategic Management
International Trade
Strategic Marketing
Globalisation
International Marketing
External foreign
environmental factors
Strategic Management
International Trade
Strategic Marketing
Globalisation
International Marketing
Firm’s internal factors
Strategic Management
International Trade
Strategic Marketing
Globalisation
Management Decision
Making
Public and private
support networks
International Marketing
Management Decision
Making
Source: Developed for this research
In view of the above literature review and in pursuit of identifying the
factors that the international marketers consider in their development of
international marketing strategies, the following hypotheses are developed:
90
Hypothesis 1:
The consideration of market and industry factors in both
domestic and foreign markets are positively related to the
effectiveness of the development decisions of a firm’s
international marketing strategy.
Hypothesis 1 is separated into four sub-hypotheses, each of which
represents a market or industry factor in both domestic and foreign markets
discussed in the review of the literature as follows:
Hypothesis 1a: The consideration of market factors in domestic markets is
positively related to the effectiveness of the development
decisions of a firm’s international marketing strategy.
Hypothesis 1b: The consideration of industry factors in domestic markets is
positively related to the effectiveness of the development
decisions of a firm’s international marketing strategy.
Hypothesis 1c: The consideration of market factors in foreign markets is
positively related to the effectiveness of the development
decisions of a firm’s international marketing strategy.
Hypothesis 1d: The consideration of industry factors in foreign markets is
positively related to the effectiveness of the development
decisions of a firm’s international marketing strategy.
91
Hypothesis 2: The consideration of the firm's internal factors is positively
related to the effectiveness of the development decisions of
a firm’s international marketing strategy.
Hypothesis 3: The consideration of foreign environmental factors is positively
related to the effectiveness of the development decisions of
a firm’s international marketing strategy.
Hypothesis 4: The consideration of public and private support networks in
foreign markets is positively related to the effectiveness of
the development decisions of a firm’s international marketing
strategy.
A model of the above hypotheses in relation to the development of
international marketing strategy is depicted below in Figure 2.9.
Figure 2.: Model of the Hypotheses Relating to the Development of
International Marketing Strategy
H1 - Market and
Industry Factors
H4 - Support Networks
in Foreign Markets
Development of
International
Marketing Strategy
H3 - Foreign
Environmental Factors
Source: Developed for this research
92
H2 - Firm’s Internal
Factors
2.4
Conclusion
The development of international marketing strategy in an organisation is a
managed decision making process carried out at the functional level usually
by international or export marketing managers in MNCs and senior managers
in SMEs.
A review of the literature suggests that there are at least four key
factors within the decision making framework that play a significant role in the
development process of an organisation's choice of international marketing
strategies. These are: (1) market and industry factors at the firm's home
country and the targeted foreign countries, (2) internal factors related to the
firm, (3) external environmental factors in the overseas markets, and (4) the
public and private support networks in the overseas markets.
In this study, market and industry factors refer to the customer base,
supply chain and competition in both home and overseas countries. Internal
factors related to the firm refers to business ambition and objectives; growth
options and resources; competencies and capabilities; its attitudes toward risk
and the stage of their internationalisation.
External environmental factors refer to the socio-cultural; political;
legal; economic and technological in the overseas markets. Public and private
support networks are defined as Australian government agencies support and
private systems support respectively at the overseas markets.
Table 2.5 on the next page summarises the above discussion and lists
the key factors and their effect on the development process of an
organisation's decisions and choice of international marketing strategy.
93
Table 2.: Summary of the Factors’ Effect on IMS Development Decisions
Factors
IMS Development Decisions
Effectiveness
Market and industry factors
High effect
Firm’s internal factors
High effect
External environmental factors
High effect
Public and private support networks
Medium effect
Source: Developed for this research
In the next chapter, the most appropriate methodology will be
considered and developed to address the research questions and test the
hypotheses.
94
CHAPTER THREE
Research Design and Methodology
Chapter 1
Introduction
Chapter 2
Literature Review
Chapter 3
Research Design
and Methodology
3.1
Introduction
Chapter 4
Data Analysis and
Research Findings
3.2 Justification for
Paradigm and
Methodology
Chapter 5
Conclusions and
Implications
3.3
Research Design
3.4
Ethical Considerations
3.5
Conclusion
95
3
RESEARCH DESIGN AND METHODOLOGY
3.1
Introduction
In the previous chapter, an extensive review of the literature involving the
identification of the factors influencing the development of international
marketing strategy, as well as other related disciplines was undertaken. This
established the research questions for the dissertation; that subsequently led
to the formulation of specific hypotheses.
This chapter will describe and justify the methodology selected to
collect and analyse the data and address the research questions. The chapter
begins with a justification of the paradigms and methodologies used in this
study (Section 3.2). Then the research design and procedures are outlined
along with the data collection, survey design and administration, sampling
process, data management and analysis (Section 3.3). Ethical issues related
to this research are then addressed (Section 3.4) and finally a conclusion is
drawn (Section 3.5).
3.2
Justification for the Paradigm and Methodology
One of the key factors in the design of the research methodology for this
study was the determination of which paradigm(s) to use in addressing the
research problem. This section provides an overview of the issues relating to
the choice of the research paradigm and justifies mixed methods utilising both
the post-positivist and positivist approaches to be undertaken in this research.
96
Guba (1990, p. 17) defined a paradigm as “a basic set of beliefs that
guide action”. It represents a worldview that defines, for its holder, the nature
of the world, the individual's place in it, and the range of possible relationships
to that world and its parts.
Paradigms as basic belief systems encompass three elements:
ontology, epistemology, and methodology. Ontology raises questions about
the form and nature of reality. Epistemology asks about the relationship
between the researcher and the research. Methodology focuses on how we
discover or create knowledge (McMurray 2006).
Guba and Lincoln (2005) identified five competing paradigms in
informing and guiding inquiry: positivism, post-positivism, critical theory,
constructivism and participatory. However in recent years, mixed methods
research as a new research paradigm is receiving increasing interest
especially in social and behavioural sciences research (Creswell 2003;
Creswell et al. 2003; Johnson & Onwuegbuzie 2004; Tashakkori & Teddlie
2003).
According to Creswell and Plano Clark (2007, p. 5), mixed methods
research can be defined as “a research design with philosophical
assumptions ... that guide the direction of the collection and analysis of data
and the mixture of qualitative and quantitative approaches in many phases in
the research process”.
In the design of business research, mixed methods combining both
positivist and post-positivist paradigms are prominent and provide the
backdrop against which other paradigms operate (Davis 2005).
97
In the context of designing a research method, a researcher following a
positivist paradigm will focus on facts or causes, whereas a researcher
following a post-positivist paradigm will focus on the understanding of human
behaviour. Research methodology developed within a post-positivist paradigm
tends to yield descriptive data and may be aimed at building new theory
through observations; whereas methodology developed within a positivist
paradigm is often designed for verification and testing of existing theory
(Neuman 2006).
The positivist paradigm is normally associated with the development of
quantitative research methodology and the post-positivist paradigm with
qualitative research methodology (Neuman 2006). This understanding of the
broad implications of the two paradigms influenced the choice of mixed
methods using both post-positivist and positivist approaches to the research
problem in this study.
Based on the nature of the research problem, the research questions,
and hypotheses developed from the literature review, mixed methods using
both positivist and post-positivist approaches were undertaken in this study
using both qualitative and quantitative analysis to test the research questions
that arose from the literature review.
This decision is justified on the grounds that the use of mixed methods
provide a greater diversity of views and stronger inferences on the research
accuracy, and offer a fuller and more comprehensive study (Tashakkori &
Teddlie 2003). Hence, it reflects an attempt to secure an in-depth
understanding of the phenomenon in question. This combination of mixed
methods, empirical materials, and perspectives in the study is best
98
understood as a strategy that adds rigour, breadth, and depth to the research
(Flick 1992). Also, according to Johnson and Onwuegbuzie (2004, p. 14), a
key feature of mixed methods research is “its methodological pluralism or
eclecticism, which frequently results in superior research”.
Moreover, mixed methods research provides more comprehensive
evidence for studying a research problem than either qualitative or
quantitative research alone as mixed methods research provides strengths
that can offset the weakness of both qualitative and quantitative research
(Creswell & Plano Clark 2007).
As positivist and post-positivist paradigms are the extremes of a
continuum, they may also be seen as complimentary rather than contradictory
(Haridas 1983; Neuman 2006) and the combination of these two paradigms in
mixed methods may be appropriate to provide different perspectives to the
research to gain a more holistic view of the study (Morse 1994) as well as for
testing the objectives of the research (Schwenk & Dalton 1991).
In this study, the application of a qualitative research method will
attempt to identify and validate the factors influencing the development of
international marketing strategy that arose from the literature review as well
as provide input for specific constructs of international marketing strategy
development in the design of the survey questionnaire with in-depth
interviews using qualitative data and the application of a quantitative survey
research method to test the hypotheses formulated from the literature review
using quantitative data.
99
3.3
Research Design
In Section 3.2, the choice of methodology was justified for this research. In
keeping with the decision to follow the mixed methods design using both postpositivist and positivist approaches, the next issue to be addressed is the
development of an appropriate research design, built around qualitative and
quantitative methods, to collect the necessary data to test the research
questions and hypotheses developed from the literature review and address the
research problem. This section describes both the qualitative and quantitative
research design and procedures in detail. A research design is a framework,
plan, structure and strategy specifying the methods and procedures used to
collect and analyse the data (Zikmund 2003).
Research can be classified into basic or applied research and can also
be distinguished into three types, corresponding to its functions, directions
and situations (Ticehurst & Veal 2000; Zikmund 2003). Basic or pure research
attempts to expand the limits of knowledge, verify the acceptability of a given
theory or learn more about a certain concept. Applied research on the other
hand, is conducted when a decision must be made about a real life problem
(Zikmund 2003). The three types of business research are: (1) exploratory
research, (2) descriptive research and (3) explanatory or often called causal
research.
According to Aaker, Kumar and Day (2004), the most common
research designs are exploratory, descriptive and causal. On the following
page, Table 3.1 summarises the features of each type of business research
and Figure 3.1 outlines the design of this research.
100
Table 3.: Types of Business Research
Exploratory
Research
Descriptive Research
Explanatory
(Causal) Research
Functions
Discovering evidence
and clarifying problems.
Finding out, describing
what it is.
Explaining how or why
things are as they are.
Directions
Gaining a better
understanding of the
general problem from
various dimensions.
Describing the
characteristics of
phenomenon or
population.
Crystallising problems
that lead to identifying
information needed for
future research.
Providing accurate
description of the problem
but does not provide
explanation for the cause
of problem.
Identifying cause-and
effect relationship
between variables when
the research has been
narrowly defined.
Conduct during the
early stage of decision
making when the
decision is ambiguous
or uncertain about the
nature of the problem.
Conduct when there is an
awareness of the problem
but not completely
knowledgeable about the
situation.
Situations
Conduct to sharply
define problems, even
though uncertainty about
future outcomes exists.
Source: Adapted from Zikmund (2000)
Figure 3.: Outline of the Research Design
Research Objectives
Research Design
Stage One
Stage Two
(Qualitative)
Exploratory Research
(Identify the causes of
Research Problem)
(Quantitative)
Descriptive Research
Explanatory Research
(Possible causes of the
Research Problem)
Source: Adapted from Sekaran (2003) and developed for this research
101
In this study, stage one will undertake exploratory research and stage
two will be both descriptive and explanatory as depicted in Figure 3.1. Each of
these research types has a distinct and complementary role to play in this
study.
In stage one, exploratory research is used to gain background
information into the research questions and problem, to clarify and identify the
causes of the research problem, and to confirm or reject the survey items.
Exploratory studies are also used as an input to further research (Malhotra
2006) and are normally flexible, unstructured and qualitative in nature (Aaker
et al. 2004).
As a broad generalisation, qualitative methodology used in the
exploratory research stage is an essential prerequisite to most quantitative
methodology used later on in the descriptive and explanatory research stage
(Creswell & Plano Clark 2007; Tidwell et al. 1996). Hence, mixed methods
methodology was undertaken in this research.
In this study, the exploratory research using qualitative methodology of
in-depth interviews is used to gain insights into the research problem and
questions, and to identify and validate the key factors influencing the
development process of international marketing strategy among several
successful exporters in Australia as well as to provide input toward the design
of the survey instrument.
Next, descriptive research using quantitative methodology of an online
survey is used to describe the characteristics of the international marketing
strategy phenomena. That is, it was used to determine the frequency of
occurrence of certain phenomenon through a survey. To minimise errors and
102
maximise reliability, the survey requires a structured questionnaire and a
reasonable number of respondents (Sekaran 2003).
In accordance to Sekaran (2003) and Zikumd (2003), if this descriptive
research fails to establish a direct cause and effect relationship between the
variables, explanatory research will then be considered at this stage. This
explanatory research would be to provide evidence of a relationship or
association between the variables through a survey (Zikmund 2003). It
creates a situation in which conditions can be controlled so that the
independent variable(s) can be manipulated to test a hypothesis about a
dependent variable (Zikmund 2003).
This research design follows the mixed methods
Exploratory
Sequential Design Model postulated by Creswell and Plano Clark (2007)
which comprises two distinct stages: qualitative followed by quantitative.
Qualitative data are first collected and analysed, the results of these
qualitative data help to develop or inform the subsequent quantitative method
(Greene et al. 1989). As the second quantitative stage builds on the first,
qualitative stage, the two stages are interlinked in the intermediate stage of
the study.
Moreover, the use of this mixed methods model in the study also
combines the literature review with both qualitative and quantitative
methodologies for a more holistic approach as shown in Figure 3.2 on the
next page.
103
Figure 3.: Literature Review and Research Methodologies Relationship
Literature
Review
Qualitative
Methodology
Quantitative
Methodology
Developed the
Hypotheses
Validating the
constructs of
IMS theories
Testing of
Hypotheses
Source: Developed for this research
In summary, the hypotheses were developed from the literature review.
Exploratory research will be conducted initially utilising a qualitative research
method of in-depth interviews to validate the constructs of theories on the
development of international marketing strategy that arose from the literature
review as well as contributing input for specific constructs in the design of the
survey instrument. It will then be followed to the next stage through
descriptive and explanatory research with quantitative research methods,
using an online survey questionnaire to test the hypotheses developed from
the literature review.
3.3.1
Qualitative Methodology
According to Denzin and Lincoln (2003, p. 36), “a [qualitative] research design
describes a flexible set of guidelines that connect theoretical paradigms first to
strategies of inquiry and second to methods for collecting empirical material”.
The design of this qualitative research approach follows the Nachmias
(2000) Theory-before-Research Model as depicted in Figure 3.3 on the next
page.
104
Figure 3.: The Theory-before-Research Model
Idea
Theory
Design
Data Collection
Analysis
Findings
Source: Adapted from Nachmias (2000)
This linear progression model begins with an idea, gathers theoretical
information through the literature review, designs a research plan, identifies
the means of data collection, analyses the data and presents its findings. As
described by Popper (2002), this orientation suggests that one begins with
conjectures (ideas) and then attempts to disapprove or refute them through
tests of empirical research.
The unit of analysis in this qualitative research comprised of individual
exporters in Australia. These constituted the data required for the exploratory
nature of this research. This data was gathered through semi-structured indepth interviews with a representative sample of the defined population,
selected using non-probability purposive maximum variation sampling
technique.
105
Section 3.3.1.1 describes the Qualitative Research Objectives; Section
3.3.1.2 Sampling for Qualitative Research explains the selection of interview
sample in detail; followed by The Qualitative Interview to be covered in
Section 3.3.1.3, and Rigour of the Qualitative Research in Section 3.3.1.4.
3.3.1.1
Qualitative Research Objectives Statement
The purpose of this qualitative research is to validate the factors influencing the
development of international marketing strategies among successful exporters
in Australia, using phenomenological design via in-depth interviews as
exploratory research; resulting in a phenomenological description of the theme
factors influencing the development process as well as providing input of
specific constructs for incorporation into the design of the survey instrument. It
is also used to identify any other factors influencing the development of
international marketing strategy among successful exporters in Australia that
might not have been established in the literature review.
3.3.1.2
Qualitative Research Sampling
In qualitative research, it is not vital to adopt a probability sampling technique
as is the case in quantitative research. A non-probability sampling technique
using purposive maximum variation sampling was used in the initial qualitative
research. The key concept for qualitative research is representativeness
(McMurray 2006). That is, to what extent are the characteristics of the smaller
group similar to some larger population from which the sample is drawn.
There are no rules for sample size in qualitative inquiry as according to
Patton (2002, p. 245), “the validity, meaningfulness, and insights generated
106
from qualitative inquiry have more to do with the information richness of the
cases selected and the observational/analytical capabilities of the researcher
than with sample size”.
Patton (2002) provided some guidelines for qualitative sampling and
suggested that the logic and power behind purposive selection of participants
is that the sample should be information rich. However, when sufficient data
creates a situation of saturation, that is, no more new information comes to
hand, adequacy is attained and this condition occurs irrespective of the
sample size.
Relatively small samples were selected using purposeful sampling in
qualitative research for in-depth study. Table 3.2 summarises the 16 different
strategies
for
purposefully
selecting
information-rich
cases.
Because
qualitative research and evaluations often serve multiple purposes, more than
one sampling strategy can be deployed. The underlying principle common to
all strategies is in selecting information rich cases that can provide a great
deal about matters of importance and are therefore worthy of in-depth study.
Table 3.: Qualitative Purposeful Sampling Strategies
Type
Purpose
Purposeful Sampling
Select information-rich cases strategically and purposefully;
specific type and number of cases selected depends on study
purpose and resources.
1.Extreme or deviant case
(outlier) sampling
Learning from unusual manifestations of the phenomenon of
interest, for example, outstanding successes/notable failures;
top of the class/dropouts; exotic events; crises.
2. Intensity sampling
Information-rich cases that manifest the phenomenon
intensely, but not extremely, for example, good students/ poor
students; above average/below average.
107
Type
3. Maximum variation
sampling
4. Homogeneous
sampling
Purpose
Document unique or diverse variations that have emerged in
adapting to different conditions. Identify important common
patterns that cut across variations (cut through the noise of
variation).
Focus; reduce variation; simplify analysis; facilitate group
interviewing.
5. Typical case sampling
Illustrate or highlight what is typical, normal, average.
6. Critical case sampling
Permits logical generalization and maximum application of
information to other cases because if it's true of this one case,
it's likely to be true of all other cases.
7. Snowball or chain
sampling
Identify cases of interest from sampling people who know people
who know people who know what cases are information rich,
that is, good examples for study, good interview participants.
8. Criterion sampling
Picking all cases that meet some criterion, for example, all
children abused in a treatment facility. Quality assurance.
9. Theory-based
sampling, operational
construct sampling, or
theoretical sampling
Finding manifestations of a theoretical construct of interest so as
to elaborate and examine the construct and its variations.
10. Confirming and
disconfirming cases
Elaborating and deepening initial analysis; seeking exceptions;
testing variation.
11. Stratified purposeful
sampling
Illustrate characteristics of particular subgroups of interest;
facilitate comparisons.
12. Opportunistic or
emergent sampling
Following new leads during fieldwork; taking advantage of the
unexpected; flexibility.
13. Purposeful random
sampling (still small
sample size)
Add credibility when potential purposeful sample is larger than
one can handle. Reduces bias within a purposeful category. (Not
for generalisations or representativeness)
14. Sampling politically
important cases
Attract attention to the study (or avoid attracting undesired
attention by purposefully eliminating from the sample politically
sensitive cases).
15. Convenience
sampling
Do what's easy to save time, money, and effort. Poorest
rationale; lowest credibility. Yields information-poor cases.
16. Combination or
mixed purposeful
sampling
Triangulation; flexibility; meet multiple interests and needs.
Source: Adapted from Patton (2002)
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For this research, a maximum variation sampling strategy (purposefully
picking a wide range of cases to get variation on dimensions of interest) was
used with the view to find some shared patterns of themes and
commonalities.
To maximise variety, cross-industry participants were selected from the
agricultural sector of the primary producer industry; the education sector of
the service industry; the ICT sector of the high technology industry; the mining
sector of the resources industry; and the measuring instruments production
sector of the manufacturing industry. In total, five firms were selected as the
sample. One from each industry mentioned above as shown below in Figure
3.4.
Figure 3.: In-depth Interviews by Industry Type and Firm Size
Businesses for In-depth Interviews
Primary
Producers
Agricultural
Services
Education
Manufacturing
Instruments
High
Technology
ICT
Source: Developed for this research
109
Resources
Mining
3.3.1.3
The Qualitative Interview
There are three main primary data collection (PDC) techniques in qualitative
research (Davis 2005). Active PDC techniques include individual in-depth
interviews and group in-depth interviews, also known as focus groups and
passive PDC techniques use observations. In this research, individual indepth interviews were conducted with key decision makers (CEO, managing
director, international marketing manager, marketing manager, export
manager or anyone selected by them as suitable to represent the
organisation) of the previously selected sample firms.
In this research, each of the selected participants was interviewed once
and this involved lengthy, semi-structured open-ended interview items
employing Patton’s (2002) general interview guide (see Appendix 2) at their
place of work.
In a semi-structured open-ended interview, the interviewer attempts to
have the informant respond to a fixed sequence set of questions planned in
advance. It essentially asks the same questions across all the selected
respondents. Probing questions are also placed at appropriate places in the
interview to elicit more detailed responses.
Because the purpose of semi-structured interviewing is to gain
information from a similar set of questions from the selected participants, the
researcher’s effect and judgement on the interview is minimised and data
analysis is easier because it is possible to locate each informant’s answer to
the same question quickly (Patton 2002).
The strength and weakness of the semi-structured standardised openended interview is highlighted in Table 3.3 on the next page.
110
Table 3.: The Semi-structured Interview Approach
Characteristics
Topics and issues to be covered are specified in advance, in outline
form; interviewer decides sequence and wording of questions in the
course of the interview.
Strengths
The outline increases the comprehensiveness of the data and makes
data collection somewhat systematic for each one. Logical gaps in
data can be anticipated and closed. Interviews remain fairly
conversational and situational.
Weaknesses
Important and salient topics may be inadvertently omitted.
Interviewer flexibility in sequencing and wording questions can result
in substantially different responses from different perspectives, thus
reducing the comparability of responses.
Source: Adapted from Patton (2002)
As stated by Morse (1994, p. 225), “qualitative research is only as good
as the investigator”. Accordingly, maximum care was taken to ensure
meticulous documentation, methodical filing, and up-to-date notes. Advanced
preparations provided the researcher with knowledge about the informant's
business and their operations, so that subtle clues in the interviews could be
picked up and explored.
Some interviews were tape recorded with prior approval from each
interviewee in accordance with SCU HREC ethics protocol (ethical issues are
discussed in Section 3.4). However, as agreed with the participants, all of
them were destroyed after being transcribed. Tape recording was used as a
method of recording data because of the following advantages:
(1)
Provides a completely accurate record of what each person said.
(2)
Frees the interviewer to listen and respond more rapidly.
(3)
Allows better eye contact and hence better development of rapport
between interviewer and interviewee (Berg 2007).
111
Before commencement of each interview, an Information Sheet for the
Interview was handed to the respondent and explained. Also, an Informed
Consent for Interview form was signed by each interviewee to meet the
requirements of SCU HREC ethics protocol.
3.3.1.4
Rigour of the Qualitative Research
Ensuring rigour in qualitative research is intricately linked to the establishment
of trustworthiness (Lincoln & Guba 1985). According to Merriam (1997, p.
120),
trustworthiness
of
qualitative
research
is
derived
from
the
“…researcher’s presence, the nature of the interaction between researcher
and participants, the triangulation of data, the interpretation of perceptions
and rich, thick description”.
There are numerous approaches to ensuring rigour in qualitative
research. The best approach is to construct research designs that push the
researcher towards becoming aware of the strengths and weaknesses of the
various research approaches (McMurray 2006). As Cronbach argues in
Lather (1986, p. 67) the purpose of establishing creditability “is not to support
an interpretation, but to find out what might be wrong with it. A proposition
deserves some degree of trust only when it has survived serious attempts to
falsify it”.
Trustworthiness in qualitative research is bound with credibility,
transferability, dependability and confirmability according to Lincoln and Guba
(1985). In this study, trustworthiness of the qualitative research was
established based on credibility instead of internal validity through checking
with participants whether their realities were represented appropriately;
112
transferability instead of external validity through the ability to replicate
findings; dependability instead of reliability by using triangulation of data and
confirmability instead of objectivity by disclosing any source of biases.
To further ensure rigour in the qualitative research component, criteria
of adequacy and appropriateness of data were also confirmed. In qualitative
research, adequacy refers to the amount of data collected, rather than to the
number of subjects, as in quantitative research. Adequacy is attained when
sufficient data has been collected and saturation occurs, and variations are
both accounted for and understood. Appropriateness refers to selection of
information according to the theoretical needs of the study and the emerging
theory (Denzin & Lincoln 2005).
3.3.1.5
Data Management and Analysis
Application of data management methods during the study is essential for the
efficiency of the research. Transcripts and notes must be easily retrieved,
easily cross-referenced, and easily separated from, and linked with, their
original sources (Denzin & Lincoln 2008).
Normally, the collected information is not immediately available for
analysis, but requires some processing. Field notes must be edited and typed
up; audiotapes transcribed, corrected and edited (Miles & Huberman 1994).
Werner and Schoepfle (1987) noted that a system needs to be
designed prior to actual data collection and stressed the importance of a clear
indexing system. In addition, five general storage and retrieval functions were
carried out as recommended by Levine (1985). (1) Formatting - how materials
are laid out, physically embodied, and structured into types of files; (2) Cross-
113
referral - linkage across different files; (3) Indexing - defining codes,
organising them into a structure, and pairing codes with specific parts of the
database; (4) Abstracting - condensed summaries of longer material, such as
documents or extended field notes; and (5) Pagination - numbers and letters
locating specific material infield notes.
In this research, the qualitative data collected through the in-depth
interviews was analysed manually. Coding (indexing) of the data gathered at
the qualitative stage was undertaken immediately after each interview to
ensure that valuable data was not lost; as advocated by Strauss (2008).
Qualitative data analysis as viewed by Miles and Huberman (1994)
contains three concurrent flows of activities: (1) data reduction, (2) data
display, and (3) drawing of conclusion and verification. Qualitative data needs
to be reduced and transformed in order to make it more readily accessible,
understandable and to draw out various themes and patterns. It directs
attention to the need for focusing, simplifying and transforming raw data into a
more manageable form.
Data display, the second important stage of analysis is intended to
convey the idea that data is presented as an organised, compressed
assembly of information that permits conclusions to be analytically drawn.
Such displays assist the researcher in understanding and observing certain
patterns and themes in the data (Miles & Huberman 1994).
After the data have been collected, reduced, and displayed; analytic
conclusions might begin to emerge and define themselves more clearly and
definitively. Conclusions drawn from recurring patterns apparent in the data
114
must be verified to assure that they are real by carefully retracing the various
steps that led to the conclusion (Miles & Huberman 1994).
These three streams of analysis activities and the activity of data
collection, form an interactive cyclical process as shown in Figure 3.5.
Figure 3.: An Interactive Model of Qualitative Data Analysis
Data Collection
Data Reduction
Data Display
Conclusions:
Drawing / Verification
Source: Adapted from Miles & Huberman (1994)
Following from the above analytical model, the analysis of the
qualitative data gathered from in-depth interviews in this study is discussed in
Section 4.2 and the findings presented in Section 4.2.3.
115
3.3.2
Quantitative Methodology
According to Neuman (2006, p. 153), “quantitative research addresses the
issue of integrity by relying on an objective technology – such as precise
statements, standard techniques, numerical measures, statistics and
replication”.
The design of the quantitative research component of this research
followed a linear progression model adapted from Hair, Bush and Ortinau
(2003) as depicted in Figure 3.5. Hence, the quantitative research process was
organised in four phases by undertaking ten interrelated task steps as shown in
Figure 3.6.
Figure 3.: The Four Phases of the Quantitative Research Process
Phase 1
Phase 2
Determination of
Information
Research
Problem
Phase 3
Development of
Appropriate
Research
Design
Execution of the
Research
Design
Phase 4
Communication of
the Results
Source: Adapted from Hair, Bush and Ortinau (2003)
In this quantitative research, the ten tasks undertaken were as follows:
Phase 1:
Task Step 1: Determine and Clarify Management’s Information Needs.
Task Step 2: Redefine the Decision Problem as a Research Problem.
Task Step 3: Establish Research Objectives and Determine the Value of the
Information.
116
Phase 2:
Task Step 4: Determine and Evaluate the Research Design and Data Sources.
Task Step 5: Determine the Sample Plan and Sample Size.
Task Step 6: Determine the Measurement Issues and Scales.
Phase 3:
Task Step 7: Collect and Process Data.
Task Step 8: Analyse Data.
Task Step 9: Transform Data Structures into Information.
Phase 4:
Task Step 10: Prepare and Present the Final Report.
These tasks will be described in detail in the following sections. Section
3.3.2.1 states the Quantitative Research Objectives, Section 3.3.2.2 Sampling
for Quantitative Research explains the selection of the survey sample. Section
3.3.2.3 Questionnaire Design and Administration follows, then Data Collection
in Section 3.3.2.4. Lastly, Data Management and Analysis with a description
of some analytical techniques will be discussed in Section 3.3.2.5.
3.3.2.1
Quantitative Research Objectives Statement
The purpose of this quantitative research methodology component of the
research is to test the hypotheses regarding those factors influencing
international marketing strategy development developed from the literature
review and validated by the qualitative methodology in the exploratory research
117
component that relate to the effectiveness of the strategy development
decisions of successful Australian exporters in overseas markets, via a selfadministrated web-based online survey.
The independent variables were defined generally as those key factors
that affect the international marketing strategy development process. The
dependent variable was defined generally as the international marketing
strategy development decisions effectiveness.
3.3.2.2
Quantitative Research Sampling
In selecting a valid and efficient sample for this study, a sampling procedure
as outlined in the seven stages by Zikmund (2003) was modified and used in
this research and is depicted below in Table 3.4.
Sampling design decisions are an important part of research design
and include both the sampling plan to be used and the sample size that will be
needed.
Table 3.: Stages in Selection of a Sample
Stages in Selection of a Sample
Selection of a Sample for This Research
Stage 1: Define Target Population
Finalists and winners in each category of AEAs
Stage 2: Select a Sampling Frame
437 finalists / winners of AEAs from 2003 - 2007
Stage 3: Determine the Sampling
Design and Method
Probability Sampling using Simple Random
Sampling Method
Stage 4: Plan procedure for selecting
Sampling Units
Plan for sample size, accuracy, time, resources,
analysis
Stage 5: Determine Sample Size
204 exporting firms
Stage 6: Select actual Sampling Units
Surveyed the 204 firms
Stage 7: Conduct Fieldwork
Email web-link to the survey questionnaire
Source: Adapted from Zikmund (2003) and developed for this research
118
Stage One: The sampling process commences with the identification of the
target population, which is specific and relevant to the research project that
the researcher wishes to investigate (Sekaran 2003).
Incorrect identification and definition of the target population may lead
to invalid data and limit generalisation of the research results. Thus, there is a
need to correctly identify and carefully define the target population as it is the
source from which the researcher is to collect the data (Zikmund 2003).
In this quantitative research component, the identified population was
defined as successful exporters who were the finalists and/or winners in each
category of the annual Australian Export Awards (AEAs).
Stage Two: After identification of the target population, a sampling frame was
created. According to Zikmund (2003), a sampling frame is the list of elements
from which the sample may be drawn, also known as the population.
Furthermore, for the research results to be generalised, choosing a correct
sampling frame is important (Sekaran 2003).
In this quantitative research component, the population was 437 firms.
This include exporting firms who were finalists and/or winners in various
categories of the Australian Export Awards for the five years from 2003 to
2007, deducting multiple winners, respondents for the pilot study, in-depth
interviewees and pre-testing of survey questionnaire participants.
Stage Three: The next stage after selecting the sampling frame was to
determine the sampling design. Sampling design is the approach used to
select the units of analysis for study. Basically, there are only two types of
119
sampling designs, non-probability sampling and probability sampling (Sekaran
2003; Zikmund 2003).
A non-probability sampling method is a process in which the selection
of sampling units is based on personal judgment. Sample units are selected
on the basis of availability/convenience or desire of the researcher (Zikmund
2003). As such, the potential members of the sample do not have an equal
and independent chance of being selected. Neuman (2006) categorised nonprobability sampling into seven types, convenience, quota, purposive,
snowball, deviant case, sequential and theoretical.
A probability sampling method, on the other hand, is a sample
selection process carried out in such a way that all members in the population
have an equal chance of being selected. Probability samples are preferable
because they are more likely to produce representative samples and they also
enable estimates of the sample’s accuracy to be made. Neuman (2006)
categorised probability sampling techniques into five categories: simple
random, systematic, stratified, cluster and multi-stage.
In this research, a probability sampling design using a simple random
sampling method was chosen. According to Neuman (2006), a simple random
sample is created from a sampling frame that uses a pure random process to
select cases so that each sampling element in the population will have an
equal probability of being selected. In this case, the sample was drawn from
the working population frame using a random-number table.
120
Stage Four: After determining the sampling design and method, procedures
for selecting sampling units were planned. The sampling plan specifies the
operational procedures and methods to obtain the desired sample (Zikmund
2003) and guides the researcher in determining the sample size, the method
of collecting data from the samples, the level of accuracy, time and resources
and, as a result, minimises potential errors in the sampling process (Sekaran
2003).
In this research, the target population was defined as successful
exporters who were the finalists and/or winners of each category of the annual
Australian Export Awards, the population frame were those finalists and/or
winners from 2003 to 2007, and a simple random sampling method was
decided.
This research used a survey instrument to collect data, within a three
week collection period. The data received was checked and adjusted to make
ready for coding and transfer to data storage. The purpose of checking and
adjusting data is to ensure the completeness, accuracy and reliability of data
before analysis (Davis 2005).
Stage Five: With the sampling plan in place, the sample size was determined.
Sample size is the selected number of people or objects to be chosen to
represent the population (Zikmund 2003). The sample size should be large
enough to test the hypotheses and address the research question. Too large
a sample does not increase the precision of testing the research question
enough to warrant the costs and trouble incurred in getting that size sample
and too small a sample is not representative of the population (Salkind 2003).
121
According to Sekaran (2003), there are two criteria in determining
sample size: precision and confidence. Precision allows the researcher to
know how close the estimate is to the true population characteristics. It is a
function of the range of variability in the sampling distribution of the sample
mean. That is, the closer the researcher wants the sample results to reflect
the population characteristics, the greater the precision required and the
larger the sample size needed (Punch 2003; Sekaran 2003).
Whereas precision denotes how closely the estimate of the population
parameter is based on the sample statistic, confidence denotes how certain
the results based on the sample statistics will also hold true and reflect the
true population characteristics (Punch 2003; Sekaran 2003).
However, in research, the theoretical framework has several variables
of interest and determining the sample size, by taking all variables into
account, is complicated. Roscoe (2004) proposed a rule of thumb for
determining an appropriate sample size: it should be larger than 30 and less
than 500. On the other hand, Sekaran (2003) simplified the sample size
decision by providing a generalised scientific table as a guideline to ensure a
good decision model for the sample size in business research.
Taking into consideration both Roscoe’s (2004) rule of thumb and
Sekaran’s (2003) sample size table (see Appendix 3), the reasonable sample
size should be between 201 - 205 firms. In this research, a total of 204
exporting firms, or approximately 46.68 per cent of the sampling frame, were
determined as the sample size, which was appropriate for this research and
was manageable in terms of size, cost and time.
122
Stage Six: After determining the sample size, a researcher will then select the
sampling units, which are the working units that the researcher will select to
study before proceeding to conduct the fieldwork (Zikmund 2003).
As this research applied a simple random sampling technique, a total
of 204 exporting firms were selected to represent the sample units of this
research. This sample was drawn from a list of exporting businesses who
were finalists and/or winners of the Australian Export Awards from 2003 to
2007, gathered from the websites of the Australian Export Awards, Australian
Export Institute, Austrade and the various State and Territories governments.
Stage Seven: Once the six stages were complete, the researcher was ready
to proceed with data collection. In this research, an online survey instrument
was delivered to the selected sample of 204 respondents by email.
3.3.2.3
Data Collection
There are several methods used to collect data in business research. Data
can be collected in a variety of ways, in different settings - field or laboratory and from different sources (Sekaran 2003). Data collection methods for
descriptive and causal research can be categorised into four main categories:
(1) surveys, (2) experiments, (3) secondary data studies, and (4) observation
(Zikmund 2003). The selection of the data collection method depends on the
type of research being conducted, the facilities available, the degree of
accuracy required, the availability of time and resources, and the expertise of
the researchers (Sekaran 2003).
123
A survey is one of the most common methods used to collect primary
data from a representative sample of individuals (Punch 2003; Sekaran 2003;
Zikmund 2003). Zikmund (2003) referred to survey as a research technique in
which information is gathered from a sample of people by use of a
questionnaire. Questionnaire surveys or interview surveys are commonly
used to collect data by telephone interview, face-to-face, mail survey and
through other communication media. The term sample survey is often used,
since the survey is expected to obtain a representative sample of the target
population (Salkind 2003; Zikmund 2003).
When conducting surveys, the researcher should be aware of various
forms of errors as a result of sampling and should attempt to minimise these
errors to maximise the information content and provide generalised results
(Sekaran 2003). The advantages and disadvantages of some typical survey
methods are summarised in Table 3.5.
Table 3.: Advantages and Disadvantages of Typical Survey Methods
Door to
Door
Interview
Mall
Intercept
Interview
Telephone
Interview
Speed of data
collection
Moderate
Fast
Very Fast
Slow
Instantaneous,
24/7
Geographic
flexibility
Limited to
moderate
Confined
High
High
High,
worldwide
Respondent
cooperation
Excellent
Moderate
to low
Good
Moderate
Varies
Versatility of
questioning
Quite
versatile
Extremely
versatile
Moderate
Not
versatile
Extremely
versatile
Questionnaire
length
Long
Moderate
to long
Moderate
Varies
Moderate
124
Mail
Survey
Online
Survey
Door to
Door
Interview
Mall
Intercept
Interview
Telephone
Interview
Item nonresponse rate
Low
Medium
Medium
High
Software can
assure none
Possibility of
misunderstanding
Low
Low
Average
High
High
Degree of
influence
High
High
Moderate
None
None
Cost
Highest
Moderate
to High
Low to
moderate
Lowest
Low
Mail
Survey
Online
Survey
Source: Adapted from Zikmund (2003)
In the quantitative research part of this study, primary data was
gathered from individuals through a self-administered web-based online
survey to address the research questions. This data collection method was
chosen because of the following benefits and advantages:
(1)
An online survey is cost effective, especially when it involves a large
sample size and requires multiple reminder postings.
(2)
Time is saved as the speed of response is almost instantaneous and
therefore the data collection period can be shortened substantially.
(3)
An online survey can be programmed to ensure that no illegal multiple
answers to questions are possible.
(4)
The respondents being managers are independently capable of
answering the questionnaire without any assistance.
(5)
It allows the researcher to gather specific data to answer the research
questions.
(6)
It allows respondents time to think about their replies, which minimises
the possibility of researcher bias.
125
(7)
Busy managers prefer to answer surveys at their own time and pace.
(8)
An online survey allows highly confidential questions to be conducted.
(9)
Business managers prefer anonymous surveys to protect the
confidentiality of their business operation.
(10)
It is appropriate for reaching a geographically dispersed population, as
in this study the respondents are spread throughout Australia (Zikmund
2003).
The researcher was well aware that an online survey has some
weaknesses such as lower response rates compared to other survey
methods, due to email spamming problems and deterrence of email
penetration by installation of email filters. Furthermore, there is no assurance
that the right respondents will fill out the questionnaire or that all questions in
the questionnaire will be answered (Zikmund 2003).
To overcome these weaknesses, the researcher undertook the
following measures:
(1)
To achieve a high response rate, an introductory email with the
University logo from the researcher, together with an Information Sheet
for the Survey were sent to each respondent stating the purpose of
study, to induce the respondents to participate and provide credibility to
the online survey, as well as to meet the SCU HREC ethics
requirements.
(2)
This introductory email states that the data received from the
respondents would be kept anonymous and confidential. This was to
assure that the respondents’ identities and firm’s information will not be
explicitly reported.
126
(3)
Efforts were made to call each business in the selected sample to
obtain the name and email address of the appropriate manager and
whenever possible speak to the manager to let him/her know about the
research and the impending survey.
(4)
An offer to email an executive summary of the findings to the
respondents was also used to increase the response rate.
(5)
Respondents were able to choose to participate and had the right not
to complete the questionnaire or to withdraw at any time.
(6)
Interesting and carefully designed questions to assist and simplify
responses, arranging the questions in a structured and a neat looking
web-based online survey questionnaire format were employed which
can also maximise the cooperation of the respondents.
(7)
A follow-up strategy, by sending follow-up email to the introductory
email and multiple reminder emails to all the respondents was
implemented to increase the response rate.
3.3.2.4
Questionnaire Design
To collect quantitative primary data, a researcher must design a questionnaire
that translates the information needed into a set of specific items, motivates
respondents to complete the questionnaire and minimises response error.
Therefore, the design of the questionnaire is one of the central stages in the
survey research process (Zikmund 2003).
As with most steps in the research process, the design of the
questionnaire is highly iterative (Sekaran 2003). Because it is an integral part
of the research design, the objective is to seek consistency with the other
127
elements of the design, notably the research purpose and the method of
analysis (Zikmund 2003).
Additional constraints are imposed by the data collection method and
the respondent’s ability and willingness to answer items about the subject. For
this study, a questionnaire (see Appendix 4) as the quantitative data gathering
instrument had been developed following a rigorous development process.
In this case, the survey questionnaire was developed based on the
principles as advocated by Sekaran (2003) and schematically depicted below
in Figure 3.7.
Figure 3.: Principles of Questionnaire Design
Questionnaire
Design
Questionnaire
Administration
Testing goodness
of data
1.
Principles of
Wording
2.
Principles of
Measurements
3.
General
“Getup”
Content and
purpose of
questions
Categorisation
Appearance of
questionnaire
Coding
Wording and
language
Type and form
of questions
Length of
questionnaire
Scales and
scaling
Introduction to
respondents
Reliability and
validity
Instructions for
completion
Sequencing
Classification
data or personal
information
Source: Adapted from Sekaran (2003)
128
According to Sekaran (2003), sound questionnaire design principles
should focus on three areas: (1) principles of wording; (2) principles of
measurement; and (3) general “getup”.
Principles of wording relates to the wording of the items. Principles of
measurement refer to planning of issues of how the variables will be
categorised, scaled, and coded after receipt of the responses. While general
getup pertains to the general appearance of the questionnaire (Sekaran
2003).
3.3.2.4.1
Wording and Survey Items
In the principles of wording, it is essential to word the survey items in a way
that can be understood by the respondent. Questions asked should not be too
long, as respondents tend to get tired or lose interest in answering long
questions. The survey items should not lead, or be loaded, to suggest
answers to the respondents. The language, the choice of words, the usage of
terms and idioms in different cultures is also important in achieving validity of
the survey information collected (Sekaran 2003).
The construction of the type of survey items and measurement scales
used in the questionnaire is essential in determining how the researcher
wants each item to be addressed (Sekaran 2003). The type of items refers to
whether the items will be open or closed ended. Open-ended items allow
respondents to respond to them in any way they choose. Closed-ended items,
in contrast, ask respondents to make choices among a set of alternatives
provided by the researcher (Zikmund 2003).
129
The survey items developed for this research all consist of closedended questions, with a total of 40 items, in which the respondents were
asked to choose the one closest to his/her own viewpoint. This research
chose closed-ended questions to ensure that the alternatives were mutually
exclusive and to code the information easily for subsequent analysis (Brace
2004).
The sequence of questions and the layout were designed to interest
respondents, as these can affect the response rate (Zikmund 2003). The
opening items were interesting and simple to comprehend, to warm
respondents toward the questionnaire.
The layout of the questionnaire should be designed to appear brief,
neat, clean and easy to follow, so that respondents can easily understand
what they are required to do, so that, in turn, the rate of return can be
increased (Zikmund 2003). Demographic questions were asked at the end of
the questionnaire, so that by the time the respondent reached the end, he or
she would have been convinced of the legitimacy and genuineness of the
questions, and hence would be more inclined and amenable to share
information (Sekaran 2003).
In this online web-based survey, many of the qualitative data findings
gathered from the in-depth interviews were incorporated into the design of the
survey
questionnaire,
particularly
those
specific
constructs
on
the
development of international marketing strategy related to Australian
exporters.
130
3.3.2.4.2
Measurement Scales
Generally, there are four types of measurement scales: nominal, ordinal,
interval and ratio scales. A nominal scale, sometimes called categorical scale,
is the simplest type but has no intrinsic ordering. An ordinal scale is similar to
a nominal scale, but the difference between the two is that there is a clear
ordering of scales. Even though the order can be classified, however, it is
hard to determine whether the space between each level is equal. An interval
scale is similar to an ordinal scale, except that the intervals between each
level are equally spaced. Ratio scale on the other hand has absolute rather
than relative quantities (Zikmund 2003).
Besides these four types of scales, there are two categories of
attitudinal scales: (1) rating scale and (2) ranking scale. Rating scales have
several response categories and are used to elicit responses with regard to
the object, event, or person studied. Ranking scales, on the other hand, make
comparisons between or among objects, events, or persons, and elicit the
preferred choices and ranking among them (Sekaran 2003).
In this questionnaire, rating scales using a seven-point Likert scale
were used to measure the intensity of the respondents’ attitude in the first
section of the questionnaire comprising items that influence the development
of international marketing strategy. Nominal and ordinal measurement scales
were used in the second section of the questionnaire on demographic
particulars to categorise each item in the spectrum.
Furthermore, efforts were made to adapt existing measurement scales
for specific constructs of international marketing strategy development in the
design of the questionnaire. However, all constructs were developed for this
131
research as none could be adapted from previous studies and existing
literature including the Handbook of Marketing Scales: Multi-Item Measures
for Marketing and Consumer Behavior Research (Bearden et al. 1993) and
the Marketing Scales Handbook: A Compilation of Multi-Item Measures
(Bruner & Hensel 1992). Besides, according to Aaby & Slater (1989) and
Cavusgil & Zou (1994), there is no well-established conceptualisation or
measures of relevant constructs in the international marketing literature.
The development of these constructs was guided by conceptual
definitions advanced in the qualitative in-depth interviews and refined in the
pilot study. Initially, in-depth interviews were conducted during the qualitative
study with key decision makers (CEO, managing director, international
marketing manager, marketing manager, export manager) to (1) verify and
improve the relevance of the variables suggested by the literature, (2) validate
and modify the scales intended to measure the variables, and (3) devise a
procedure that the researcher would use to assign scores to variables.
The final survey instrument after been refined in the pilot study
contained eight groups of variables intended to measure market factors in
domestic markets, industry factors in domestic markets, market factors in
foreign markets, industry factors in foreign markets, firm’s internal factors,
foreign environmental factors and support networks factors in foreign markets,
as
well
as
international
marketing
strategy
development
decisions
effectiveness and performance.
Once the data were obtained, the goodness of data was assessed
through tests of reliability and validity. Reliability indicates how stably and
consistently the items tap the variable; and validity establishes how well a
132
technique, instrument, or process measures a particular concept (Sekaran
2003).
Therefore, reliability and validity are two essential characteristics of a
good measurement tool (Zikmund 2003). Thus, the assessment tools that will
be used to test the hypotheses must be reliable and valid; otherwise the
researcher may act incorrectly in accepting or rejecting the research
hypothesis (Salkind 2003). The relationship between reliability and validity is
straightforward. A test can be reliable but not valid, but a test cannot be valid
without first being reliable. In other words, reliability is necessary, but not a
sufficient condition of validity (Salkind 2003). Therefore, the criteria of
reliability and validity were considered carefully in this research, since
reliability is a necessary condition for validity and only a reliable and valid
instrument will yield accurate results.
Zikmund (2003, p. 300) defined reliability as “the degree to which
measures are free from error and therefore yield consistent results”. Reliability
tests the consistency and stability of a measurement instrument (Punch
2003). It is the degree to which a measure indicates its uniformity without bias
and hence ensures consistent measurement over time and across the various
items in the instrument (Sekaran 2003). Two dimensions that underlie the
concept of reliability are repeatability and internal consistency with which the
instrument measures the concept and helps to assess the goodness of a
measure (Salkind 2003; Sekaran 2003; Zikmund 2003). In the quantitative
research component of this research, reliability issues were addressed by
carrying out a principal components analysis and calculating the coefficients
of reliability or Cronbach’s alpha.
133
The Cronbach’s alpha is a commonly used method to examine the
reliability coefficient, within a particular set of items, by correlating
performance on each of the items in a test or a scale with overall performance
on the test or scale across participants (Salkind 2003; Sekaran 2003;
Zikmund 2003). Cronbach’s alpha is computed in terms of the average intercorrelations among the items measuring the concept (Sekaran 2003). The
closer Cronbach’s alpha gets to 1.0, the higher the reliability (Sekaran 2003;
Zikmund 2003).
Ticehurst and Veal (2000) referred to validity as the extent to which
information collected in a research study truly reflects the phenomenon being
studied. Zikmund (2003, p. 302) defined validity as “the ability of a scale or
measuring instrument to measure what it is intended to measure”. If the
measuring instrument does not measure what is designed to measure, there
will be problems in the research results. Hence, validity is an issue of
research concern, because validity determines the confidence researchers
have in the results/outcomes of the study. The way that questionnaire items
are examined for validity is to observe whether the items focus on the results
of the study and whether the results are understood within the context of the
research purpose (Punch 2003; Salkind 2003).
Several types of validity tests are used to test the goodness of
measures, grouped broadly as content validity, criterion-related validity and
construct validity. Content (face) validity is a measure of how well the items
represent or tap the concept (Sekaran 2003). Criterion validity is the ability of
some measure to correlate with other measures of the same construct
134
(Zikmund 2003), and construct validity is the extent to which the results of a
test are related to an underlying construct (Salkind 2003).
To determine validity, content (face) validity was undertaken in this
research study to ensure that the questionnaire designed would collect the
required information to address the research questions and research problem
respectively. To establish the content (face) validity for this research, previous
studies were reviewed to identify possible items to be included in the scale,
experts in the research fields were consulted to obtain their comments on the
measurement instrument, then the measurement instrument was tested in a
pilot study on a group of respondents similar to the population being studied,
to ascertain whether revision was needed before modifying the measurement
based on the feedback from the pilot study as in accordance to Davis’s (2005)
four-step process.
3.3.2.4.3
General Appearance
In general appearance or “getup” as referred to by Sekaran (2003), the
researcher needs to pay attention to how the questionnaire looks. An
attractive
and
neat
questionnaire
with
an
appropriate
introduction,
instructions, and a well-arrayed set of items and response alternatives will be
easier for the respondents to answer (Sekaran 2003).
For this survey, the questionnaire was designed in two sections, with a
total of 40 items. Words and instruction used were kept simple and
understandable to the respondents to assist them to complete the survey. In
addition, an introductory email with an Information Sheet for the Survey (see
Appendix 5) was sent to introduce the project, the purpose of the survey and
135
the importance of the results from the survey, while assuring the respondent
of confidentiality.
3.3.2.5
Questionnaire Pre-testing
Before distributing the survey questionnaire, pre-testing was carried out to
ensure that the items were understood by the respondents, and that there
were no problems with the wording or measurements. Zikmund (2003)
referred to pre-testing as a trial run with a group of respondents, used to
screen out problems in the instructions or design of a questionnaire. In other
words, pre-testing serves as a trial run of the survey questionnaire to see
whether or not it is in need of further revision.
The pre-testing sample can be a group of respondents selected on a
convenience basis but they need to be similar in makeup to the population
that ultimately will be sampled (Zikmund 2003). Hence, pre-testing
respondents should not be divergent from the actual respondents, so that the
results of the pre-test will assist the researcher to see whether the
questionnaire meets the objectives of the research.
In this research, the draft questionnaire was tested on a small sample
of four respondents before the pilot study to identify and eliminate potential
problems. All aspects of the questionnaire were tested, including item content,
wording, sequence, form and layout, item response difficulty and instructions.
The respondents in the pre-test were similar to those who were later included
in the actual survey in terms of background characteristics, and familiarity with
the topic. All respondents held positions of responsibility in international
marketing. In other words, respondents for the pre-test and then for the actual
136
survey were drawn from the same population. However, care was taken so
that none of the pre-tested respondents became part of the final survey.
To refine the questionnaire, draft copies were also circulated among
three academic experts in the field for comments and feedback. The final
questionnaire (see Appendix 4) was designed on the basis of the results of
the pre-test and the observations, comments, and recommendations of the
academic experts.
3.3.2.6
Pilot Study
A pilot study was conducted to determine the feasibility of the online
quantitative survey before launching the full scale survey operation. Pilot
studies help the researcher gain valuable insights into the process and make
necessary adjustments to avoid future problems (Zikmund 2003).
The pilot study was planned for this research for the following reasons:
(1)
To ensure proper design of the questionnaire.
(2)
To ascertain whether each variable of the questionnaire taps the
construct.
(3)
To assess adequacy of the research method and protocol.
Web-based survey questionnaires were emailed to 20 managers of
exporting firms in different industries for completion. Follow-up phone calls
were made to these managers to increase the response rate, by reminding
the respondents to participate and expedite the return process. The results
and feedback from this pilot study were incorporated into the final survey
questionnaire.
137
3.3.2.7
Questionnaire Administration
In this research, the online survey questionnaire was administered as follows:
(1)
There were 480 firms who were finalists and/or winners of the
Australian Export Awards for the five years from 2003 to 2007.
However, some of these businesses had been finalists or winners on
multiple occasions; this reduced the list to 466 firms. 20 firms were
involved in the pilot study, five firms were interviewed and four firms
had pre-tested the questionnaire and therefore were excluded from this
list, reducing it to 437 firms. This number represents the population of
this study. This research was conducted via an online web-based
survey of 204 firms selected randomly from this population.
(2)
The survey of 204 firms was manageable in size, cost and time. The
survey took a total of three weeks for data collection.
(3)
The respondents in this study were managers in charge of international
marketing, export, marketing or another appropriate function in these
204 firms. These 204 firms represent approximately 46.68 per cent of
the total finalists and/or winners of the Australian Export Awards for the
five years from 2003 to 2007.
(4)
The questionnaire was submitted to the Southern Cross University
Human Research Ethics Committee for approval according to the
University’s code of research ethics. The research questionnaire was
approved on June 2, 2008. HREC approval number ECN-08-057.
(5)
An introductory email with the University logo together with an
Information Sheet for the Survey was sent to each respondent on 15
July 2008 (see Appendices 5 and 6). These described the details of the
138
study, some general instructions and encouraged the respondents to
participate via an integrated web link to the online survey.
(6)
On the third day, 18 July 2008, an email was sent as a follow-up to the
introductory email with an integrated link to the survey (see Appendix
7). This was done after three days so the respondent’s memory was
still fresh about the request to participate in the survey when he/she
received the first email.
(7)
A week after sending the first email, on 22 July 2008, a reminder email
with an integrated link to the survey was dispatched to remind the
respondent to participate in the survey (see Appendix 8).
(8)
On 29 July 2008, two weeks after the introductory email was
dispatched, another email with an integrated link to the survey was
again sent to remind the respondent to participate (see Appendix 9).
(9)
Three weeks after the introductory email was sent, on 5 August 2008
the data collection stage was concluded. A total of 54 questionnaires
were returned with six responses not fully completed, thus providing 48
usable valid responses for data analysis.
(10)
The collected data was coded, tabulated and entered into SPSS data
analysis software for further analysis.
3.3.2.8
Data Management and Analysis
The objective of applied business research is to address some social or
practical problem and to identify whether the desired outcomes were achieved
and to establish an understanding or explanation (Sekaran 2003).
139
The research design specified the methods that were transferred into
action in collecting the data. Such raw data cannot be used to reach
conclusions or make decisions until it is converted into information in a format
suitable for decision-making (Zikmund 2003).
The procedures in converting raw data into information include editing,
coding, data entry and data analysis; as depicted in Figure 3.8.
Figure 3.: Overview of the Stages in Quantitative Data Analysis
Stage 2
Coding
Stage 3
Data Entry
Error checking and
verification
Stage 1
Editing
Stage 4
Data Analysis
Source: Adapted from Zikmund (2003)
Editing involves a process of checking and adjusting the data and
making it ready for coding and entry into data storage. The purpose of editing
is to ensure the completeness, consistency and reliability of data (Zikmund
2003). There are two types of editing: field editing and in-house editing. Field
editing is conducted when using interviewing methods, while in-house editing
investigates the results of data collected in survey questionnaires (Zikmund
2003).
140
In this research, upon receiving the survey results, in-house editing
was carried out to check for errors and omissions in the questionnaires, and if
required, adjustments were made to make the data more complete, readable
and consistent before coding.
Coding is the process of identifying and classifying each response from
the questionnaires with a numerical score or other character symbol, then
transcribing these scores or symbols into the computer (Sekaran 2003;
Zikmund 2003). There are two procedures in coding pre-coded questions and
open-ended questions. The code of pre-coded questions is numbered against
the responses. Where the response is already a number, there is no need to
recode. Generally, only one response is possible for pre-coded questions,
therefore only one code is recorded.
In the case of open-ended items, a small sample of a total number of
replies to a particular item may be tallied to construct categories for coding
(Ticehurst & Veal 2000). The decisions about how many categories are
acceptable depend on the purpose of the study and the limitations of the
computer program and the plan for data entry (Zikmund 2003).
In this survey, pre-coded items were used. A numerical score was
assigned to each response. Because the questions are closed-ended, the
respondent was asked to select only one response that was closest to his/her
opinion for each item where the code was assigned. After completing the
editing procedures, the code for each answer was then transferred to data
storage.
Zikmund (2003, p. 467) defined data entry as “a process of transferring
data from a research project to computers”. Transferred data includes
141
responses that are edited and coded from the survey questionnaire. There are
several means of entering data into computers, such as optical scanning,
directly entering data at the moment of collection, and manually keyboarding
(Sekaran 2003). When using a keyboarding process to transfer data, the
researcher must be aware that errors can occur. To ensure accuracy in
transferring data, the process of verifying data should be carried out by a
second keyboard operator, who is different from the original keyboard
operator, so as to check the accuracy of data entered (Zikmund 2003).
However, in this research the data were transferred directly from the
downloaded spreadsheet format file of the online survey results, directly into
the data analysis software for further analysis. Therefore, the checking of data
accuracy by a second keyboard operator was not necessary.
Once the data were edited, coded and entered into the computer; data
analysis was undertaken. Analysis is the application of reasoning to
understand and interpret the data that has been collected about the subject
(Zikmund 2003). Sekaran (2003) determined the three basic objectives in data
analysis as:
(1)
To get a feel for the data which will give preliminary ideas of how good
the scales are and how well the coding and entering of data have been
done.
(2)
To test the goodness of data in term of reliability and validity, and
(3)
To test whether the hypotheses are substantiated.
In this quantitative part of the research, the analytical tools used to
analyse the collected data were descriptive statistics and inferential statistics.
Descriptive and inferential statistics are quite different from one another, but
142
work hand in hand. Descriptive statistics are used to describe or summarise
information about the characteristics of the sample (Salkind 2003; Zikmund
2003).
After the descriptive analysis stage, inferential statistics were
undertaken (Sekaran 2003; Zikmund 2003). Inferential statistics are used to
make inferences or judgments about a population on the basis of a sample
(Zikmund 2003). Inferential statistics also help to establish relationships
among variables, in which conclusions are drawn and decisions made as to
whether the collected data relates to the original hypotheses (Salkind 2003).
To undertake both descriptive and inferential statistics for this research,
quantitative data analysis software SPSS for Windows version 14.0 was used
to carry out various statistical tests, and to make comparisons between
variables and relationships between variables. Table 3.6 summarises the
types of statistical tests that can be used depending on the relationship of
variables in the research questions, the measurement scales and the number
of variables involved.
Table 3.: Types of Statistical Tests
Research
Question
1. Is one variable
related to another
variable?
Variable A
Variable(s) B
Statistical Test
Nominal or Ordinal
Nominal or Ordinal
Contingency Table
Analysis
Nominal scale with 2
categories
(dichotomous)
Interval or Ratio and
satisfy assumption of
normality
Analysis of Variance
(ANOVA) or
independentsamples t test
Nominal or Ordinal
Interval or Ratio and
satisfy assumption of
normality
Analysis of Variance
(ANOVA)
143
Research
Question
1. Is one variable
related to another
variable?
Variable A
Variable(s) B
Statistical Test
Nominal scale with 2
categories
(dichotomous)
(a) Ordinal, or (b)
Interval or Ratio and
FAIL to satisfy
assumption of
normality
Mann-Whitney U test
Nominal scale with
more than 2 categories
(a) Ordinal, or (b)
Interval or Ratio and
FAIL to satisfy
assumption of
normality
Kruskal-Wallis test
Ordinal
Ordinal
Spearman's Rankorder correlation
(Spearman's rho) or
Kendall's tau
Interval or Ratio and
satisfy assumption of
normality
Interval or Ratio and
satisfy assumption of
normality
(a) Pearson Product
Moment Correlation
and the coefficient of
determination
(b) Linear
Regression
2. Is one variable
related to two or
more other
variables?
3. Have things
changed since last
time I measured
them?
Interval or Ratio and
FAIL assumption of
normality
Interval or Ratio and
FAIL assumption of
normality
Nominal or Ordinal
Interval or Ratio and
satisfy assumption of
normality, and
Dichotomous
Nominal scale
Spearman rank order
correlation
(a) Multivariate
analysis of Variance
(MANOVA)
(b) Discriminant
Analysis
Nominal or Ordinal
Nominal, Ordinal, or
Interval/Ratio scales
which FAIL
assumption of
normality
Logistic Regression
Interval or Ratio and
satisfy assumption of
normality
Interval or Ratio and
satisfy assumption of
normality, and
Dichotomous
Nominal scale
Multiple Linear
Regression (MLR)
Interval or Ratio and
satisfy assumption of
normality
The same variable is
measured a second
time and satisfy
assumption of
normality
Repeated measures
Analysis of Variance
(ANOVA) or pairedsamples t test
144
Research
Question
3. Have things
changed since last
time I measured
them?
Variable A
Variable(s) B
Statistical Test
Interval or Ratio and
satisfy assumption of
normality
The same variable is
measured a second
time, and a third time
(or more) and satisfy
assumption of
normality
Repeated measures
Analysis of Variance
(ANOVA)
(a) Ordinal, or (b)
Interval or Ratio and
FAIL to satisfy
assumption of normality
The same variable is
measured a second
time
Wilcoxon signedrank test
(a) Ordinal, or (b)
Interval or Ratio and
FAIL to satisfy
assumption of normality
The same variable is
measured a second
time, and a third time
(or more)
Friedman test
4. Can I identify a
subset of variables
which will best
predict the values
of an independent
variable?
Independent: Interval or
Ratio and satisfy
assumption of normality
Predictors: Interval or
Ratio and satisfy
assumption of
normality
Stepwise Multiple
Linear Regression
Independent: Nominal
or Ordinal scale
Predictors: Interval or
Ratio and satisfy
assumption of
normality
Stepwise
Discriminant
Analysis
5. Can the scores
on a large set of
items be explained
by a small number
of underlying
factors or
dimensions?
Dichotomous Nominal scale, or Interval or Ratio
and satisfy assumption of normality
Principal
Components
Analysis
6. Do sub-groups
of people exist in
my sample who
has similar
patterns of
responses across
a set of variables?
Dichotomous Nominal scale, or Interval or Ratio
and satisfy assumption of normality
Cluster Analysis
7. Can I test a
model which
proposes causal
relationships
between a set of
variables?
Dichotomous Nominal scale, or Interval or Ratio
and satisfy assumption of normality
(a) Usually a
combination of a
number of correlation
and Multiple Linear
Regression
analyses.
(b) Structural
Equation
Modelling
Source: Adapted from Manning & Munro (2006)
145
To select appropriate tests for data analysis and interpretation,
Manning and Munro (2004) suggest a five step process as follows:
(1)
Understand the purpose of the research such as testing hypotheses, or
making a correlation between variables, or testing differences in
variables;
(2)
Identify the variables involved and the exact nature of the relationship
expected;
(3)
Determine the scale of measurements of each variable;
(4)
Ensure the variables satisfy the assumptions;
(5)
Select the appropriate tests based on the above considerations.
Since the objective of this study was to test whether the research
hypotheses are supported or not, that is, to determine whether the seven
independent variables (market factors in domestic market, industry factors in
domestic market, market factors in foreign market, industry factors in foreign
market; firm’s internal factors, foreign environmental factors, and support
networks factors) are related to the dependent variable (IMS development
decisions effectiveness), a standard multiple linear regression analysis was
carried out.
Multivariate regression analysis is used to model relationships between
variables as well as to determine the magnitude of relationships and to make
predictions based on the models. There are three major regression methods:
standard, hierarchical and stepwise regression (Coakes & Steed 2007).
In the standard method, all independent variables enter the regression
equation at the same time, since the objective is to examine the relationship
between the whole set of independent variables and the dependent variable.
146
In the hierarchical method, the researcher determines the order of entry of the
independent variables based on theoretical knowledge. Finally, for the
stepwise method, the number of independent variables entered and the order
of entry are determined by statistical criteria generated by the software
(Coakes & Steed 2007).
As advocated by Manning & Munro (2006) and Hair et al. (2006), in this
research, the standard multiple linear regression method was used to
determine the relationship between the seven independent variables and one
dependent variable in testing the research hypotheses developed in Chapter
Two.
However, before multivariate regression analysis was carried to test
the hypotheses, other analyses were conducted on the collected data. These
include exploratory factor analysis using Kaiser-Meyer-Olkin (KMO) measure
of sampling adequacy and Bartlett's test of sphericity to assess the factor
structures of the data and loadings of items; factor analysis using principal
components extraction method to examine whether all the items in each
composite variable could be considered to represent a single underlying
construct; assessing the values of skewness and kurtosis to determine the
normality of the data distribution; and a non-parametric analysis using the
Spearman rank correlation coefficient test to verify the significance of
relationship between the variables.
3.3.2.9
Limitations of the Quantitative Methodology
In regard to the cross-sectional research design used in the quantitative
study, some of the limitations are as follows:
147
(1)
A common limitation of cross-sectional studies may be due to errors in
recall of the event and possibly outcome (Mancuso & Charlson 1995).
In any survey-based method, including the online web-based survey
adopted in this study, there are bound to involve measurement error.
For example, the elicitation of the scale measurement depends on the
respondent’s ability to accurately report their level of agreement with
the survey statements in the questionnaire regarding their perceptions
and attitudes towards the development of their firm’s international
marketing strategies.
(2)
Confounding factors may not be equally distributed between the groups
being compared and this unequal distribution may lead to bias and
subsequent misinterpretation (Lindell & Whitney 2001; Mann 2003). As
in this study, individual weighting assigned by each firm to those
factors influencing the development of their international marketing
strategies and its measurement scales are not taken into consideration.
(3)
Data collection was conducted only in Australia and it could be
suggested that generalisability of the findings beyond this country may
be problematic as Australia is a relatively minor player internationally
with less than two percent share of the world GDP and less than one
percent share of the annual international trade in 2007 (World Trade
Organization 2008).
(4)
Timing maybe a crucial factor in the development and implementation
of an international marketing strategy. However, this study does not
examine the time factor and its importance in the development of an
international marketing strategy.
148
(5)
A further limitation of cross-sectional studies is that it is not possible to
establish cause and effect. Cross sectional studies are used to
determine prevalence. They are relatively quick and easy but do not
permit distinction between cause and effect. Therefore, cross sectional
studies do not provide an explanation for their findings (Mann 2003).
Furthermore, the use of web-based online survey for data collection has its
limitations too. Some of the limitations are summarise as follows:
(1)
There are tendency that some individuals may respond to an invitation
to participate in an online survey, while others may ignore it. Therefore,
there is no assurance that the right respondents will participate in the
survey, leading to a systematic (self-selection) bias (Thompson et al.
2003).
(2)
Cannot find out who had or had not responded to the survey as nonresponse rate tracking is difficult to ascertain in most online survey
methods (Andrews et al. 2003).
(3)
Access issues due to email spamming problems and deterrence of
email penetration by installation of email filters (Wright 2005).
3.4
Ethical Considerations
Ethical considerations are important in academic and business research, as in
any other field of human activity (Ticehurst & Veal 2000). There are a number
of ethical considerations in the implementation of this research. This section
of the methodology outlines a number of the key ethical issues associated
with this research, namely harm, privacy, informed consent and research
ethics.
149
These ethical issues were addressed in this research by adhering to
the Southern Cross University’s code of research ethics guidelines. An
application that includes the questionnaire used in this research was made to
the Southern Cross University Human Research Ethics Committee for
approval according to the University’s code of research ethics, and the
application was approved on June 2, 2008, approval number ECN-08-057.
In this study, harm relates more to confidentiality of data and privacy
rather than physical or other distress (Ticehurst & Veal 2000). Consequently,
all interviews and data collected remain confidential, and identities of
respondents remain anonymous. Therefore, it is imperative to the success of
this research that the respondents understand the level of confidentiality being
afforded to them throughout this process.
Moreover, the privacy of all respondents is to be respected in the
implementation and reporting of this research. No details of individuals
involved in this research are published.
Informed consent is a written statement that explains aspects of a
study to participants and asks for their voluntary agreement to participate
before the study begins (Neuman 2006). Furthermore, where there is a risk of
harm to the subject, it is clearly necessary for the subject to be fully aware of
the risks involved in order to give their informed consent to participate in the
research (Ticehurst & Veal 2000).
In this study, each participant was provided with an information sheet
explaining the purpose of the research prior to each interview and the survey
(see Appendix 5). This information sheet described the objectives of the
research with contact particulars for further details if required. During the
150
introduction to the interview, participants were informed as to why they were
chosen for the research and reminded of the purpose of the research.
Finally, all parties involved in this research have obligations affected by
ethical concerns. Each participant is obliged to be truthful and provide honest
cooperation (Zikmund 2003). The researcher is expected to be truthful in
representing the purpose of the research, to be objective and to protect the
rights of the participants.
3.5
Conclusion
This chapter addressed the mixed methods research methodology adopted
for this study. The research design amalgamating the literature review with
both qualitative and quantitative approaches was discussed. Appropriate data
collection methods were described together with the sample selection
procedure and the methodical process.
Qualitative research method by means of in-depth interviews was
undertaken to validate the factors influencing the development of international
marketing strategy that arose from the literature review and to identify any
other factors not established in the literature review as well as provide input to
the design of the survey instrument.
Quantitative research methods via an online survey questionnaire was
then undertaken to test the hypotheses developed from the literature review.
The survey respondents in this study are all successful exporters who were
either finalists or winners in various categories of the annual Australian Export
Awards for the five years from 2003 to 2007. A simple random sampling
technique was applied to collect data through a self-administrated online web-
151
based survey questionnaire. Once the data was collected, it was checked,
coded and input into the computer for analysis.
Statistical software package, SPSS version 14.0 for Windows was then
used to analyse the collected data and several statistical techniques were
explored to analyse the quantitative data, including factor analysis, nonparametric analysis and regression analysis.
In the next chapter, the collected data analysis will be discussed and
interpreted to present the research findings.
152
CHAPTER FOUR
Data Analysis and Research Findings
Chapter 1
Introduction
Chapter 2
Literature Review
Chapter 3
Research Design
and Methodology
Chapter 4
Data Analysis and
Research Findings
4.1
Introduction
Chapter 5
Conclusions and
Implications
4.2
Qualitative Data
Analysis
4.3
Quantitative Data
Analysis
4.4
Summary of Research
Findings
4.5
Conclusion
153
4 DATA ANALYSIS AND RESEARCH FINDINGS
4.1
Introduction
In the previous chapter, a detailed discussion on the research design and
methodology applied in this study was carried out. This chapter will now
present the data collected from the in-depth interviews and online survey, and
provide a detailed analysis of the data collected using both qualitative coding
analytical techniques and quantitative statistical techniques identified in
Chapter Three to test the four hypotheses developed in Chapter Two.
The chapter begins with the analysis of qualitative data gathered from
the in-depth interviews together with the findings (Section 4.2), followed by the
analysis of quantitative data collected from the web-based online survey
(Section 4.3). The profiles of respondents are outlined in the classification of
data. Then, preliminary examination of the data, including data screening,
forming composite variables, checking for internal consistency, identifying
univariate and multivariate outliers, tests for normality of distribution and
descriptive statistics is discussed.
Next, checking for the presence of common method variance are
carried out, reliability and validity issues are addressed, non-parametric
analysis to verify the significance of relationship between variables are
conducted and inferential statistics used to determine relationships among
variables and to test the hypotheses are explored. A summary of the research
findings is presented (Section 4.4), and finally conclusions are drawn (Section
4.5).
154
4.2
Qualitative Data Analysis
It has been mentioned in Chapter Three that mixed methods research
methodology using both qualitative as well as quantitative approaches were
used in this study. Traditionally qualitative and quantitative approaches have
been positioned as if they were polar and mutually exclusive alternatives.
However recently, mixed methods research has emerged that provide a more
balanced approach in which both types of researcher admit the contribution of
the other (Creswell 2003).
In this study, qualitative research methodology was carried out as a
prelude to the quantitative research methodology in order to validate the key
factors influencing the international marketing strategy developmental process
that arose from the literature review and to identify any other factors that
might not be established in the literature review that is pertinent to Australian
exporters as well as to refine the items for incorporation into the survey
questionnaire. This survey instrument was later used to test the hypotheses
developed in the literature review of Chapter Two using quantitative research
methods.
Qualitative data gathered from in-depth interviews was analysed
manually following the analytic technique developed by Miles and Huberman
(1994). This includes (1) putting information into different arrays; (2) making a
matrix of categories and placing the evidence within the relevant categories;
creating data displays; (3) tabulating the frequency of different events; (4)
examining the complexity of such tabulations and their relationships by
calculating second-order numbers through means and variances; and (5)
155
putting information in chronological order or using some other temporal
scheme.
Accordingly, in this research, the following steps were taken to analyse
the data gathered from the interviews using Glaser and Strauss’s (1967)
method of constant comparison and Miles and Huberman’s (1994) coding and
analytic technique for qualitative data analysis:
(1)
It began with the reading of the transcripts to obtain an overall flavour
of the interviewees’ responses. Next to each sentence or paragraph,
labels were generated to reflect the initial coding. From these labels, a
general category scheme of the participant responses was developed.
(2)
Themes were identified by sorting the initial scheme into concrete
categories and subcategories. The categorisation reflected similarity of
responses and frequency of responses. At least half the participants
had to identify an initial theme for it to be included (Miles & Huberman
1994). Next, the transcripts and field notes were re-read, looking for
frequently occurring expressions and unexpected counterintuitive
material that may provide atypical evidence of participant experiences.
The responses were then categorised according to several initial
themes.
(3)
These themes were reviewed to determine how they fit into existing
literature or how they might contribute to an understanding of the
international marketing strategy development process. During this step,
two criteria advocated by Patton (2002) were used: Does the
information
confirm
current
international
marketing
strategy
development literature, and does it offer any new insights and
156
interpretations on the development of international marketing strategy?
As a result, the initial themes were combined and renamed into factors
related to the development of international marketing strategy. The
responses were re-read and categorised into one of the nine themes
(factors) to ensure goodness of fit. After this step, the researcher
should determine whether the resulting nine factors adequately reflect
the responses provided by participants.
With the above steps undertaken, the analysis of qualitative data
gathered from in-depth interviews will be explored in greater detail in the
following sections.
4.2.1 Profile of Interview Participants
A total of five participants were interviewed in this study, and all were selected
from the list of Australian Export Awards winners and finalists from 2003 to
2007. A maximum variation sampling strategy was utilised to select
information rich cases across a variety of industries (Patton 2002).
All the interviews were undertaken in a two week time frame.
Interviews with each of the participants were carried out in their respective
offices and lasted between 45 minutes to an hour. Participants were reminded
to respond to the questions on the basis of their organisation's practices,
rather than what they personally think should be done and that each question
should be answered individually on its own merit and not be influenced by
response(s) to any other question(s).
To protect the confidentiality of the participants, each participant was
identified by a code. The details of the organisations they worked for were not
157
identified to further protect their confidentiality and in order to meet the ethics
requirements as set by the SCU Human Research Ethics Committee.
Table 4.1 summarises the profile of each interviewee together with a
brief description of their organisation’s ownership types, years of international
business experience, annual international turnover and the industry and
sector they represent.
Table 4.: Profile of Interview Participants
Code
Position
Industry and
Sector
Ownership
Type
Internation
al Business
Annual
Turnover
A
Marketing
Director
High
Technology –
ICT
Australian Sole
Trader /
Partnership
3 - 5 Years
Less than
A$5 Million
B
Export
Manager
Primary
Producers Agricultural
Australian
Proprietary
Company
3 - 5 Years
A$5 to A$50
Million
C
International
Manager
Services Educational
Government
Enterprise
More than 5
Years
Less than
A$5 Million
D
Marketing
Manager
Resources –
Mining
Australian
Public
Company
More than 5
Years
More than
A$50 Million
E
General
Manager
Manufacturing Instruments
Subsidiary of
foreign MNCs
More than 5
Years
A$5 to A$50
Million
Source: Analysis of interview data
4.2.2 Data Reduction and Display
The in-depth interviews with each participant followed a semi-structured openended interview style with the aid of a general interview guide (see Appendix
2) so that all participants would respond to a fixed sequence set of the same
questions and none would be missed (Patton 2002).
158
On completion of each interview, raw qualitative data were immediately
coded, formatted and indexed to simplify and transform it into a more
manageable structure (Strauss 2008). Following the analytic technique
developed by Miles and Huberman (1994), the data were then reduced and
displayed in a matrix format showing the frequency of occurrence for each
factor influencing the development of international marketing strategy, as well
as other information on the development process of their international
marketing strategy as shown in Table 4.2.
Table 4.: In-depth Interviews Data Display
Code
A
B
C
D
E
Total
Count
%
√
√
√
√
5
100
√
√
3
60
√
√
2
40
√
√
√
4
80
Factors/variables
1. Market Factors in Domestic Markets

Competition
√

customer base
√

lack of growth

product/services substitution
√
2. Industry Factors in Domestic Markets

controls and restrictions
√
√
√
√
√
5
100

buyer’s bargaining power
√
√
√
√
√
5
100

supplier’s bargaining power
√
√
√
4
80
3. Market Factors in Foreign Markets

Competition
√
√
√
√
4
80

customer base
√
√
√
√
4
80

product/services substitution
√
√
√
√
4
80

distribution networks
√
√
√
√
4
80
159
4. Industry Factors in Foreign Markets

government controls

local / commercial practices
√
√
√
√
√
5
100
√
√
√
√
4
80
√
√
√
√
4
80
5. Industry Factors in Foreign Markets

barriers of entry
6. Firm’s Internal Factors

business objectives
√
√
√
√
√
5
100

competitive advantages
√
√
√
√
√
5
100

attitude towards risk
√
√
√
√
4
80

business’s resources and core
capabilities
√
√
√
√
√
5
100

top management aspirations
and commitment
√
√
√
√
√
5
100
7. Foreign Environmental Factors

socio-cultural practices
√
√
√
√
4
80

political system
√
√
√
√
4
80

legal system
√
√
√
√
4
80

economic climate
√
√
√
√
4
80

technological differences
√
√
√
3
60
2
40
1
20
√
1
20
8. Support Networks Factors

public support networks
√

private support networks
√
√
9. Parent Company Factors

follow head office guidelines
10. Others – IMS Development Process

multi-dimensional strategy
√
√
√
√
√
5
100

IMS modify over time
√
√
√
√
√
5
100
Source: Analysis of interview data
160
Altogether, nine factors influencing the development of international
marketing strategy were identified from these in-depth interviews as indicated
in Table 4.2 in the previous page. The first eight factors relate to the research
hypotheses developed in the literature review in Chapter Two.
Although, within the context of this research, the ninth factor that was
uncovered during this part of the research was found to be irrelevant to this
study because of its specific nature; as discussed in the following chapter
(Section 5.6) future research on this specific factor is recommended. This
factor was stated by participant E as follows:
“Our company needs to follow established guidelines from our
regional
headquarters
in
developing
our
international
marketing strategy, like …”
This factor seems only applicable to subsidiaries of MNCs which
require them to follow their parent company guidelines in their development of
international marketing strategy. This factor seems unique to larger
organisations where protocol must be strictly maintained for control purposes,
unlike smaller SMEs that are much more autonomous in their strategy
development.
Another irrelevant issue was identified during the in-depth interviews
when participants were encouraged to provide further comments. An
interesting remark came from participant A:
“Because our business is ‘virtual’ … on the World Wide Web,
we don’t need to look into any external factors in the foreign
markets as we do not know where our customers come
from”.
161
As established in the literature review where foreign external
environmental factors are always considered in the development of
international marketing strategy with traditional businesses, this phenomenon
seems completely different for virtual businesses. Thus, further investigation
and research on the development of international marketing strategy for this
type of businesses may be of value and is discussed in Section 5.6.
4.2.3 Qualitative Data Findings
After the qualitative data from in-depth interviews had been collected, reduced
and displayed; common key themes and recurring patterns began to emerge.
From the analysis carried out using Glaser and Strauss’s (1967) method of
constant comparison and Miles and Huberman’s (1994) coding and analytic
technique, the following findings are presented:
These nine themes - market factors in domestic markets, industry
factors in domestic markets, market factors in foreign markets, industry
factors in foreign markets, industry factors in foreign markets, firm’s internal
factors, foreign environmental factors, support networks factors and parent
company factors are dimensions or factors associated with the development
of international marketing strategy. As the last dimension - parent company
factor relates only to MNCs, the remaining eight dimensions provided a
foundation for the development of a measure for the quantitative phase of this
mixed methods research.
162
The following findings are the results from the analysis of the above
themes:
(1)
Successful Australian exporters follow a variety of multi-dimensional
strategy development processes that differ over time and in different
contexts when developing their international marketing strategies.
(2)
Most exporters take into consideration market and industry factors like
competition, customers and supply chain distribution networks both in
the domestic and foreign markets when developing their international
marketing strategies.
(3)
All exporters take into consideration the firm’s internal factors such as
the ambition and objectives of the organisation, its attitude towards
risk, the firm’s resources and core capabilities, and top management
aspirations and commitment when developing their international
marketing strategy.
(4)
Businesses that are subsidiaries of MNCs need to follow parent
company guidelines in developing their international marketing
strategy.
(5)
For most exporters, foreign environmental factors in particular sociocultural, political, legal, economic and technological factors in the
foreign markets have an influence in the development of their
international marketing strategy.
(6)
The public support networks in the foreign markets are considered by
some exporters in the development of their international marketing
strategy, but most of them rarely rely on private support networks in the
foreign markets.
163
(7)
Most businesses do not utilise only one development process in
formulating their international marketing strategy, but employ multiple
development processes of strategy development.
(8)
The international marketing strategies developed are not stagnant for a
fixed period, but modify over time when circumstances change or
opportunities present.
(9)
An interesting observation of an e-commerce company whose
business model is virtual, with operations rooted solely on the Internet
World Wide Web, is that it does not take into consideration any factors
in the foreign markets when developing their international marketing
strategy. They do not need strategies to target specific markets due to
the fact that the Internet is global in nature.
The common key themes in the qualitative data from the exploratory
research phase were incorporated into the final survey questionnaire to be
tested along with the hypotheses developed from the literature review in
Chapter Two.
In addition, these findings also validate several key factors influencing
the development of international marketing strategy that arose from the
literature review. These included market and industry factors in both domestic
and foreign markets, the firm’s internal factors, foreign environmental factors,
and public and private support networks in the foreign markets.
Furthermore, the findings from these in-depth interviews did identify an
issue related to the development of international marketing strategy that was
not found in the literature review. That is, virtual businesses do not consider
any environmental factors in the foreign markets when developing their
164
international marketing strategy compared to traditional businesses. While this
type of virtual businesses is extraneous to this study, further research on this
unique issue is recommended and discussed in Section 5.6.
4.3
Quantitative Data Analysis
In this mixed methods research both qualitative and quantitative approaches
were used. Qualitative research was conducted to validate the constructs and
linkages between constructs and quantitative research methods were then
applied to test those constructs and relationships.
In the previous section, results of the qualitative research were
reported, and the conclusions of this part of the research were incorporated
into the survey instrument to test the hypotheses developed in the literature
review. That is, the results of the qualitative research will be subjected to
further quantitative testing for validation and generalisation.
In this section, the results of the quantitative research will be reported.
Before reporting the detailed quantitative analyses, profiles of the respondents
are outlined in the classification of data.
4.3.1 Classification of Data
In this research, an introductory email with an integrated web link to the online
survey and an Information Sheet for Survey was sent on 15 July 2008 to the
manager in-charge of the export or (international) marketing department of the
204 Australian exporters who were either finalists or winners of the Australian
Export Awards from 2003 to 2007. If there was no such post in the
organisation, it was explicitly requested that the managing director, general
165
manager or someone with in-depth knowledge of the firm's exporting activities
should complete the questionnaire.
A total of 54 questionnaires were received during the three week
collection period with six responses not fully completed, yielding an effective
response rate of 23.5%.
This response rate was considered reasonable, according to Pecotich,
Hattie and Low (1999) and Groves (2004) on comparable similar surveys, as
busy executives tend to be less likely than the general population to respond
to survey questionnaires, and with the current problem of spamming, about
35% of mass emails are expected to be opened by receivers whilst the rest
would remain blocked or deleted. As a result, a response rate for an online
web-based questionnaire of above 20% is considered to be good (Melon
Media 2008). Although this response rate (23.5%) is not high, it was
considered adequate for this web-based online survey. Table 4.3 below
shows the response rate of surveyed respondents.
Table 4.: Response Rate of the Survey
Respondents
Australian Export Awards
Winners / Finalists 03-07
Working
Population
Sample
Size
Returned
Usable
Questionnaire
Response
Rate
437
204
48
23.5%
Source: Analysis of survey data
In the distribution of respondents by industry category, there was a
good mix of industry categories among the respondent firms, with the majority
166
(37.5%) falling within the high technology sector. Table 4.4 below shows the
distribution of respondents by industry category.
Table 4.: Distribution of Respondents by Industry Category
Industry Category
Number of Respondents
Percentage
High Technology
18
37.5
Primary Producers
4
8.3
Manufacturing
11
22.9
Services
11
22.9
Resources
3
6.3
Others
1
2.1
Source: Analysis of survey data
The largest number (66.7%) of the respondent firms had an
international annual turnover between A$5.0 to A$50.0 million and only 12.5%
of firms had an annual international turnover of more than A$50.0 million.
Table 4.5 below shows the distribution of respondent firms by their annual
international turnover.
Table 4.: Distribution of Respondent Firms by their Annual International
Turnover
Annual International
Turnover
Number of Respondents
Percentage
Less than A$5.0 Million
10
20.8
A$5.0 to A$50.0 Million
32
66.7
More than A$50.0 Million
6
12.5
Source: Analysis of survey data
167
In the distribution of respondent firms by their ownership types, the
majority are Australian owned proprietary companies (62.5%). Table 4.6
below shows the distribution of respondent firms by their ownership types.
Table 4.: Distribution of Respondent Firms by Ownership Types
Ownership Type
Number of Respondents
Percentage
Australian Owned Proprietary Company
30
62.5
Australian Government Enterprise
4
8.2
Australian Owned Sole Trader/Partnership
3
6.3
Subsidiary of a Foreign Multinational
3
6.3
Australian Public Company
8
16.7
Others
0
0
Source: Analysis of survey data
The majority of the respondent firms (83.3%) had international
business experience of more than five years and none had three years or
less. Table 4.7 below shows the distribution of respondent firms by the length
of their international business experience.
Table 4.: Distribution of Respondent Firms by Length of International
Experience
Length of International
Business Experience
Number of Respondents
Percentage
Less than 1 Year
0
0
1 - 3 Years
0
0
3 - 5 Years
8
16.7
More than 5 Years
40
83.3
Source: Analysis of survey data
168
There was also a good mix in the number of countries where the
respondent’s product/services are marketed, with the majority (70.8%)
marketed in more than 10 countries. Table 4.8 below shows the distribution of
respondent firms product/services by number of countries marketed.
Table 4.: Distribution of Respondent Firms Product/services by Number
of Countries Marketed
Marketed in number of
overseas countries
Number of Respondents
Percentage
Less than 3 countries
3
6.3
4 – 10 countries
11
22.9
More than 10 countries
34
70.8
Source: Analysis of survey data
In the distribution of respondent firms by mode of market entry, all of
the respondent firms are exporters, with some businesses having multiple
mode of entry to international markets. Table 4.9 below shows the respondent
firms by their mode of market entry.
Table 4.: Distribution of Respondents by Mode of Market Entry
Market entry mode
Number of Respondents
Percentage
Exporting
48
100
Contractual agreement
11
22.9
Joint venture
4
8.3
Direct investment
8
16.6
Others
3
6.3
Source: Analysis of survey data
169
4.3.2 Preliminary Analysis of Data
After the collected data was transferred into SPSS software for analysis, a
preliminary examination of the raw data was carried out to screen, and if
required, the raw data was cleaned.
This is to address two issues: case-related issues such as the
accuracy of the data input, homogeneity and reliability of the composite
variable on whether it really does represent a single underlying construct and
identifying both univariate and multivariate outliers; and distribution issues
such as normality, homoscedasticity and linearity (Hair et al. 2006;
Tabachnick & Fidell 2007).
4.3.2.1
Data Screening and Entry
For this study, the raw data was downloaded from the online survey in a
spreadsheet format. Coding was performed to transform the downloaded
character values to numerical scores and it was then transferred directly into
SPSS software.
Screening of the data set was conducted through an examination of
basic descriptive statistics or frequency distributions. Values that were
missing, out-of-range or improperly coded were identified with these checks.
In this research, a frequency test was run for the eight variables to
detect any missing, out-of-range or improperly coded values among the
responses. None were found in the data set as all cases for each variable
were within the expected range of 1 to 7 (see Appendix 10).
170
4.3.2.2
Composite Variables
After entry of the coded data into the SPSS software, the first step was to
create composite variables representing each theoretical construct. For each
respondent, the average scores across each item of the variable from
question 1 to 34 were calculated to form new composite variables
representing the respective theoretical constructs as summarised in Table
4.10.
Table 4.: Formation of Composite Variables
Composite
variables
Items
Market Factors in Domestic Markets
mfdm
1-4
Industry Factors in Domestic Markets
ifdm
5-8
Market Factors in Foreign Markets
mffm
9 - 12
Industry Factors in Foreign Markets
iffm
13 - 16
Firm’s Internal Factors
finf
17 - 21
Foreign Environmental Factors
exef
22 - 26
Support Networks Factors in Foreign Markets
snff
27 - 30
IMS Development Decisions Effectiveness
imsd
31 - 343313
Theoretical Constructs C
Composite variables Questions values
Source: Analysis of survey data
4.3.2.3
Factor Analysis
After creating the composite variables and having decided that the data were
acceptable for further analysis, an exploratory factor analysis was undertaken
to assess the latent structure (dimensions) of the screened dataset.
171
Exploratory factor analysis was considered appropriate to assess the
factor structures of the data and loadings of items. This procedure seeks to
summarise data by grouping together variables that are correlated and
provides a tool for consolidating variables about underlying processes
(Tabachnick & Fidell 2007).
To determine that the data were suitable for factor analysis, the KaiserMeyer-Olkin (KMO) measure of sampling adequacy (MSA) was carried out to
pre-analyse the data matrix. This procedure is recommended by Hair et al.
(2006) because it quantifies the degree of intercorrelations among the
variables and the appropriateness of factor analysis. In addition, Bartlett's test
of sphericity, also recommended by Hair et al. (2006) was carried out. This
test provides the statistical significance that the correlation matrix has
significant correlations among at least some of the variables.
KMO measure of sampling adequacy is calculated as a value between
0 and 1, and results close to 1 indicate a high rate of interrelationships
between variables. According to Hair et al. (2006), an overall KMO value of
above 0.50 is required before proceeding with the factor analysis, while
Barlett's test of sphericity seeks a significance level p < 0.05 (Hair et al. 2006).
Table 4.11 on the next page summarises the results of each variable,
indicating that analysis of the data revealed that all scales met the criteria as
described. KMO measure of sampling adequacy ranged from 0.63 to 0.79,
while Bartlett's tests of sphericity were all significant, p < 0.05.
172
Table 4.: KMO MSA and Bartlett's Test of Sphericity
KMO Measure of
Sampling
Adequacy
Bartlett’s Test
of Sphericity
Market Factors in Domestic Markets
0.69
<0.05
Industry Factors in Domestic Markets
0.72
<0.05
Market Factors in Foreign Markets
0.78
<0.05
Industry Factors in Foreign Markets
0.76
<0.05
Firm’s Internal Factors
0.68
<0.05
Foreign Environmental Factors
0.71
<0.05
Support Networks Factors in Foreign Markets
0.79
<0.05
IMS Development Decisions Effectiveness
0.63
<0.05
Composite Variables C
Source: Analysis of survey data
With the acceptance of the above two tests and completion of the preanalysis, the internal consistency (homogeneity) of all the composite variables
was checked by performing a factor analysis using principal components
extraction method to examine whether all the items in each particular
composite variable could be considered to measure a single underlying
construct.
With the exception of the firm’s internal factors variable, all other
composite variables had only one component extracted with an eigenvalue
greater than 1.0 and so unidimensionality was assumed for all these
composite variables (see Appendix 10). Also, all items in these composite
variables displayed component loadings greater than the minimum criterion of
0.50 as specified by Hair et al. (2006) as shown in Table 4.12 on the next
page.
173
Table 4.: Factor Analysis Eigenvalues and Component Loadings
Item
F1
Domestic competition in the local markets
0.83
Shift of customer base in the local markets
0.77
Substitutes of local product / services
0.68
Lack of growth in the local markets
0.70
F2
Local control & restriction in the industry
0.62
Bargaining power of local buyers
0.79
Bargaining power of local suppliers
0.72
Company competitive position in local markets
0.80
F3
Competition in foreign markets
0.72
Existing customers in foreign markets
0.76
Size of customer base in foreign markets
0.85
Substitutes of product / services in foreign markets
0.83
F4
Level of foreign government control
0.76
Foreign market commercial practices
0.76
Barriers of entry in foreign markets
0.69
Local customs and practices in foreign markets
0.81
F5
Company's attitude towards risk
0.92
Meeting overall business objectives
0.78
Existing business capabilities
0.76
Organisational resources commitments
0.65
The company competitive advantages
0.71
F6
Technological differences in foreign markets
0.62
Economic climate in foreign markets
0.71
Cultural practices in foreign markets
0.71
Legal systems in foreign markets
0.68
Political systems in foreign markets
0.81
F7
Government support networks in foreign markets
0.75
Private support networks in foreign markets
0.85
Service providers support in foreign markets
0.84
Agents and distributors support in foreign markets
0.75
F8
IMS decisions contribute to export profits
0.90
IMS decisions achieve export success in foreign markets
0.72
IMS decisions affect export sales
0.90
IMS decisions contribute to export growth
0.58
Eigenvalue
2.23
2.17
2.50
2.28
2.16
2.52
2.57
2.47
Percentage of variance
55.67
54.27
65.51
57.06
43.14
50.40
64.27
61.69
Factor labels:
F1 Market Factors in Domestic Markets
F5 Firm's Internal Factors
F2 Industry Factors in Domestic Markets
F6 Foreign Environmental Factors
F3 Market Factors in Foreign Markets
F7 Support Networks Factors in Foreign Markets
F4 Industry Factors in Foreign Markets
F8 IMS Development Decisions Effectiveness
Source: Analysis of survey data
174
The internal consistency of the composite variable for firm’s internal
factors was checked by performing a factor analysis using principal
components extraction method to examine whether the five items could be
considered to measure a single underlying construct. Two components were
extracted with an eigenvalue greater than 1.0 and so unidimensionality was
not assumed (see Appendix 10).
With this pattern it was decided that items 2 to 5 all seemed to display
adequate homogeneity (internal consistency), but this was not the case for
item 1. To ensure homogeneity of the composite variable for firm’s internal
factors, the first item was removed from the composite variable and another
factor analysis was performed.
In this case, only one component was extracted with an eigenvalue
greater than 1.0 and so unidimensionality was assumed (see Appendix 10).
All items displayed component loadings greater than the minimum criterion of
0.50 as specified by Hair et al. (2006).
4.3.2.4
Correlation Analysis
To further verify that the items of the dataset are homogenous, an
examination of its internal consistency was carried out by examining its
correlation using the Pearson Correlation Coefficient test among all key
(composite) variables and their associated items (Manning & Munro 2006).
It was found that all key variables display correlations with their
individual items all greater than 0.5 and inter-item correlations between items
are all greater than 0.3, except between item 2 and 3 for market factors in
domestic markets variable, item 1, 3 and 4 for industry factors in domestic
175
markets variable, item 1, 3 and 4 for foreign environmental factors variable,
and between item 1 and 4 for IMS development decisions effectiveness
variable (see Appendix 10). According to Hair et al. (2006), these high
correlations indicate similarity of patterns across characteristics between
variables.
Thus, as advocated by Manning & Munro (2006) and Field (2009), with
all key variables displaying correlations with their individual items greater than
0.5 this pattern seems to demonstrate adequate homogeneity of the dataset.
4.3.2.5
Univariate and Multivariate Outliers
After checking the composite variables for homogeneity and reliability, the
next step in the preliminary analysis of data was to examine the data for
outliers. Outliers are unreasonable observations with extreme values on one
variable or combination of variables that are distinct from the rest of the data
set (Hair et al. 2006; Tabachnick & Fidell 2007).
To identify univariate outliers for the variables market factors in
domestic markets, industry factors in domestic markets, market factors in
foreign markets, industry factors in foreign markets, firm’s internal factors,
foreign environmental factors, support networks factors in foreign markets and
IMS development decisions effectiveness, boxplots were visually inspected
and standard scores were calculated for each respondent.
From the boxplots analyses of the above eight key variables, no
univariate outliers were found (see Appendix 10). Also, each of these
respondents displayed standard scores with an absolute value within +/- 3.29
(p < 0.05).
176
A test for multivariate outliers was then conducted using the techniques
described by Tabachnick and Fidell (2007). Using data from the set of eight
variables, the Mahalanobis distance was calculated for each case.
Tabachnick and Fidell (2007) state that the Mahalanobis distance should be
interpreted as a ‫א‬2 (chi-square) statistic with the degrees of freedom equal to
the number of independent variables. The authors recommend that a criterion
of p < 0.05 be used to evaluate whether a case is judged to be a multivariate
outlier (Tabachnick & Fidell 2007), and so a critical value of ‫א‬82 = 26.125 was
used. No case was identified with a Mahalanobis score in excess of this value
and so no multivariate outliers were identified.
4.3.2.6
Normality of Distribution
To address the distribution issues of normality in this research, the scores of
the variables market factors in domestic markets, industry factors in domestic
markets, market factors in foreign markets, industry factors in foreign markets,
firm’s internal factors, foreign environmental factors, support networks factors
in foreign markets and IMS development decisions effectiveness were
investigated. Values of skewness and kurtosis were calculated for the
distribution of scores for these variables are shown in Table 4.13 on the next
page.
To test whether the distribution’s skew significantly deviated from that
of a normal distribution, the value for skew was divided by the standard error
of the skew to create a z-score. Using the criteria presented by Tabachnick
and Fidell (2007), for sample size less than 300, if this value exceeds an
absolute value of 2.58, then we say the skew is significant.
177
Table 4.: Skewness and Kurtosis
Skewness
Composite Variables
Kurtosis
Statistics
Std.
Error
z-score
Statistics
Std.
Error
z-score
Market Factors in Domestic Markets
-0.18
0.34
-0.54
-0.95
0.67
-1.40
Industry Factors in Domestic Markets
-0.22
0.34
-0.64
-0.76
0.67
-1.13
Market Factors in Foreign Markets
0.32
0.34
0.93
-0.10
0.67
-0.15
Industry Factors in Foreign Markets
-0.10
0.34
-0.29
-0.92
0.67
-1.36
New Firm’s Internal Factors
-0.09
0.34
-0.26
0.02
0.67
0.03
Foreign Environmental Factors
-0.15
0.34
-0.43
-0.54
0.67
-0.80
Support Networks Factors
0.20
0.34
0.58
-0.15
0.67
-0.22
IMS Development Decisions
Effectiveness
0.01
0.34
0.04
-0.96
0.67
-1.42
Source: Analysis of survey data
In this case the sample size was less than 300, the ratio of skew to
standard error of skew for all eight variables was less than 2.58 (in absolute
terms) and so it was concluded that we did not have significant levels of skew.
A similar procedure was conducted for kurtosis where the value for
kurtosis was divided by the standard error of kurtosis to create a z-score.
Using the criteria presented by Tabachnick and Fidell (2007), for sample size
less than 300, if this value exceeds an absolute value of 2.58, then we say the
kurtosis is significant.
In this case the sample size was less than 300, the ratio of kurtosis to
standard error of kurtosis for all eight variables was less than 2.58 (in absolute
terms) and so it was concluded that we did not have significant levels of
kurtosis.
178
As concluded from the above test for normality of distribution, it
appeared that the eight key variables had no significant level of skew or
kurtosis from normality. Therefore, there was no need to transform the scores
for these distributions.
4.3.2.7
Descriptive Analysis of Data
The objective of this descriptive analysis section is to transform the raw data
into mean, range, minimum, maximum, standard deviation and variance to
display the frequency distributions, measure of central tendency and
dispersion of each variable involved (Coakes & Steed 2007).
It provides statistical and graphical displays that are useful for
describing all the key variables. The results are summarised below in Table
4.14.
Table 4.: Descriptive Statistics of Data
Composite Variables
Mean
Range
Min
Max
Std.
Dev.
Variance
Market Factors in Domestic Markets
4.29
2.25
3.25
5.50
0.65
0.42
Industry Factors in Domestic Markets
4.19
2.25
3.25
5.50
0.53
0.33
Market Factors in Foreign Markets
4.10
3.00
2.75
5.75
0.64
0.41
Industry Factors in Foreign Markets
4.13
2.25
3.00
5.25
0.64
0.40
New Firm’s Internal Factors
4.40
2.25
3.25
5.50
0.58
0.34
Foreign Environmental Factors
4.52
2.40
3.00
5.40
0.60
0.36
Support Networks Factors
4.32
3.75
2.50
6.25
0.79
0.63
IMS Development Decisions
Effectiveness
4.16
2.25
3.00
5.25
0.66
0.44
Source: Analysis of survey data
179
As there were no extreme values in the data set as indicated in the
tests for univariate and multivariate outliers in Section 4.2.3, the mean values
above represent the measure of central tendency for the purpose of statistical
inference instead of the median or mode. From these statistics, the means for
all the variables seem tightly packed, indicating that measures of central
tendency for these variables are consistent across the data set (Hair et al.
2006).
The range, standard deviation and variance were used to determine
the measures of variability of the data. As shown in the Table 4.14 above,
most of the standard deviations were less than 1.00, that is, they were small
and thus correspond to a small amount of variation in the data set. In contrast
to the standard deviation and variance, the range for each variable suggests
some variation or dispersion in the process, but the range is based on only
the maximum and minimum score, and it is often inferior to other measures of
variation like the standard deviations and variance that are based on the value
of every score (Sekaran 2003).
These descriptive statistics summarise the information contained in the
sample of scores of the collected data. The measures of central tendency
were consistent and measures of variability were small, exhibiting low
dispersion of the data. Hence, the next stage of the data analysis was to
classify the data and describe the relationships among these variables.
4.3.3
Common Method Variance
A Harman’s one-factor test was carried out to test for the presence of
common method variance effect.
All the 34 items were entered into an
180
exploratory factor analysis using principal component analysis to determine
the number of factors that are necessary to account for the variance in the
variables to assess common method variance.
According to Podsakoff et al. (2003), if either (a) a single factor emerge
from the analysis, or (b) one general factor will account for the majority of the
covariance among the variables, substantial amount of common method
variance is present.
However, the outcome revealed the presence of eight distinct factors
with eigenvalue greater than 1.0, rather than a single factor. These eight
factors together accounted for 86.24% of the total variance. Thus, no general
factor is apparent. The SPSS generated output is shown in the appendix 10.
While the results of the principal component analysis do not preclude
the possibility of common method variance, it does suggest that common
method variance is not of great concern and therefore is unlikely to confound
the interpretations of results.
4.3.4
Reliability and Validity
To reduce errors and to ensure quality of measurements, all variables in the
questionnaire were tested for reliability and validity as stated in Section
3.3.2.3. The reliability issue was addressed by calculating the coefficients of
reliability or Cronbach’s alpha values of all eight composite variables. Validity
was addressed by initiating Davis’s (2005) four-step procedure to measure
the content (face) validity of the questionnaire.
181
4.3.4.1
Reliability
The reliability of data was confirmed by calculating the coefficient
(Cronbach’s) alpha value of each composite variable. The value indicates a
level of confidence in the reliability of the questionnaire in terms of measuring
the underlying dimension (Hair et al. 2006). The alpha value ranges from 0
(perfectly unreliable) to 1 (perfectly reliable). Any construct that scores a value
higher than 0.80 is considered significantly reliable; and any alpha scores
between 0.70 to 0.80 is assumed to be acceptable (Hair et al. 2006).
Cronbach’s alpha for all composite variables are presented in Table 4.15.
Table 4.: Cronbach’s alpha Value of Composite Variables
C Composite Variables
Items
Cronbach alpha values
Market Factors in Domestic Markets
1-4
0.73
Industry Factors in Domestic Markets
5-8
0.72
Market Factors in Foreign Markets
9 - 12
0.80
Industry Factors in Foreign Markets
13 - 16
0.75
New Firm’s Internal Factors
18 - 21
0.71
Foreign Environmental Factors
22 - 26
0.75
Support Networks Factors
27 - 30
0.81
IMS Development Decisions
Effectiveness
31 - 343313
0.79
Composite variables Questions values
Source: Analysis of survey data
The results indicate that Cronbach’s alpha for the composite variables
market factors in foreign markets was 0.80 and support networks factors in
182
foreign markets was just above 0.80 (α = 0.81) which could be considered to
represent highly acceptable reliability (Hair et al. 2006).
The other remaining variables: market factors in domestic markets,
industry factors in domestic markets, industry factors in foreign markets, firm’s
internal factors, foreign environmental factors and IMS development decisions
effectiveness were above 0.70 (α ranging from 0.71 to 0.79) which could be
considered to represent acceptable reliability (Hair et al. 2006).
4.3.4.2
Validity
Davis (2005) proposed a four-step procedure to address the content (face)
validity of survey research. Firstly, conduct an exhaustive search of the
literature for all possible items to be included in the scale. Secondly, solicit
expert opinions on the inclusion of items. Thirdly, pre-test the scale on a set of
respondents similar to the population to be studied. Finally, modify as
necessary with the feedback and reflect it in the final draft.
All these four steps were followed in this research to ensure content
(face) validity. The literature review presented in Chapter Two was employed
intensively to formulate the questionnaire. The draft questionnaire was
circulated among three academic experts in the field for their feedback, and
pre-tested by four respondents who were similar to those in the target
population in terms of background characteristics and familiarity with the topic.
A pilot study was also carried out. Finally, the feedback was incorporated into
the completion of the final draft of the questionnaire.
183
4.3.5
Testing of Research Hypotheses
As stated in Chapter Three, there were four hypotheses with the first
hypothesis separated into four sub-hypotheses, developed in Chapter Two to
be tested as follows:
Hypothesis 1:
The consideration of market and industry factors in both
domestic and foreign markets are positively related to the
effectiveness of the development decisions of a firm’s
international marketing strategy.
Hypothesis 1a: The consideration of market factors in domestic
markets is positively related to the effectiveness of the
development decisions of a firm’s international
marketing strategy.
Hypothesis 1b: The consideration of industry factors in domestic
markets is positively related to the effectiveness of the
development decisions of a firm’s international
marketing strategy.
Hypothesis 1c: The consideration of market factors in foreign markets
is positively related to the effectiveness of the
development decisions of a firm’s international
marketing strategy.
Hypothesis 1d: The consideration of industry factors in foreign markets
is positively related to the effectiveness of the
development decisions of a firm’s international
marketing strategy.
184
Hypothesis 2:
The consideration of the firm's internal factors is positively
related to the effectiveness of the development decisions of
a firm’s international marketing strategy.
Hypothesis 3:
The consideration of foreign environmental factors is
positively related to the effectiveness of the development
decisions of a firm’s international marketing strategy.
Hypothesis 4:
The consideration of public and private support networks in
foreign markets is positively related to the effectiveness of
the development decisions of a firm’s international marketing
strategy.
As the survey’s data satisfied the assumption of normality and both
dependent and independent variables were measured in interval scales, as
advocated by Manning & Munro (2006) and Hair et al. (2006), a standard
multiple linear regression was performed between IMS development decisions
effectiveness as the dependent variable and market factors in domestic
markets, industry factors in domestic markets, market factors in foreign
markets, industry factors in foreign markets, new firm’s internal factors,
foreign environmental factors and support networks factors in foreign markets
as independent variables to determine any relationships.
The use of the standard multiple linear regression test determines the
strength of the relationship between each of the seven independent variables
individually, and the dependent variable. (Hair et al. 2006; Manning & Munro
2006; Tabachnick & Fidell 2007).
185
The multiple correlation coefficient (R = 0.90) was significant which
means that the combined correlation of the seven independent variables with
the dependent variable is high (Hair et al. 2006; Manning & Munro 2006).
The F statistic with degree of freedom of 7 and 40 (F (7,40) = 24.88, p <
0.05) means that the seven independent variables, as a set, are significantly
related to the dependent variable. Thus the multiple correlation coefficient is
significant (Hair et al. 2006; Manning & Munro 2006). Furthermore, 81.3% of
the variation in the dependent variable was explained by the set of
independent variables (R2 = 0.81) (see Appendix 10).
Accordingly, this means that market factors in domestic markets,
industry factors in domestic markets, market factors in foreign markets,
industry factors in foreign markets, new firm’s internal factors, foreign
environmental factors and support networks factors in foreign markets
accounts for 81.3% of the variation in the effectiveness of the development
decisions of IMS (Hair et al. 2006; Manning & Munro 2006).
Yet, individual predictors such as industry factors in foreign markets,
sri2 = 0.0086, b = 0.24, t = 1.36, p > 0.05, market factors in foreign markets,
sri2 = 0.0074, b = 0.20, t = 1.27, p > 0.05, foreign environmental factors, sri2 =
0.0053, b = 0.31, t = 1.07, p > 0.05, new firm’s internal factors, sri2 = 0.0013, b
= 0.09, t = 0.53, p > 0.05; industry factors in domestic markets, sri2 = 0.0012, b
= 0.09, t = 0.51, p > 0.05 and market factors in domestic markets, sri2 =
0.0008, b = 0.09, t = 0.41, p > 0.05 are all non-significant.
As the above b-values are positive in nature, it indicates that there are
positive relationships between the predictors and the outcome (Field 2009).
Since t-values are derived from the b-values divided by its standard error
186
(Manning & Munro 2006), any polarity changes in b-values will also affect the
t-values in similar way.
However, all the b-values and t-values are statistically non-significant.
Therefore, market factors in domestic markets, industry factors in domestic
markets, market factors in foreign markets, industry factors in foreign markets,
new firm’s internal factors and foreign environmental factors cannot contribute
to the expectation of a positive relationship with IMS development decisions
effectiveness.
Conversely, support networks factors in foreign markets was found to
have a negative b-value indicating a negative relationship between the
predictor and the outcome (Field 2009). Since both b-value and t-value are
statistically non-significant, it would appear that support networks factors in
foreign markets cannot provide any contribution to the expectation of a
negative relationship with IMS development decisions effectiveness (b = 0.08, t = - 1.29, p > 0.05).
As can be seen from the above multiple linear regression analysis,
there is a lack of statistical significance findings on the t-values in the
relationship between all of the independent variables and the dependent
variable. Perhaps this can be attributed to the limited number of responses
and the cross-sectional nature of the sample with respondents coming from a
variety of different industries which could influence the multicollinearity (Hair
et al. 2006; Tabachnick & Fidell 2007).
A summary of the multiple linear regression analysis findings is shown
in Table 4.16 on the next page.
187
Table 4.: Multiple Linear Regression Findings
Multiple R
R2
Results
0.90
0.81
Significant
b-values
t-values
Results
Market Factors in Domestic Markets
0.09
0.41
Non-significant
Industry Factors in Domestic Markets
Market Factors in Foreign Markets
Industry Factors in Foreign Markets
Firm’s Internal Factors (new)
Foreign Environmental Factors
Support Networks Factors in Foreign
Markets
0.09
0.51
0.20
0.24
0.09
0.31
1.27
1.36
0.53
1.07
Non-significant
Non-significant
Non-significant
Non-significant
Non-significant
-0.08
-1.29
Non-significant
Dependent Variable
IMS Development Decisions
Effectiveness
Independent Variables
Source: Analysis of survey data
From the statistical data analysis performed, it can be concluded that
the combined market factors in domestic markets, industry factors in domestic
markets, market factors in foreign markets, industry factors in foreign markets,
new firm’s internal factors, foreign environmental factors and support
networks factors in foreign markets contributed significantly to the IMS
development decisions effectiveness.
Though there are signs of positive relationships between each of the
predicators with the outcome, except support networks factors in foreign
markets which indicates a negative relationship, the results of these individual
predictors are statistically non-significant.
Therefore, it cannot lay claim to the support of the four research
hypotheses, specifically Hypothesis 1 where market and industry factors in
domestic and foreign markets are positively related to the effectiveness of the
188
development decisions a firm’s international marketing strategy, Hypothesis 2
where the firm's internal factors are positively related to the effectiveness of
the development decisions a firm’s international marketing strategy,
Hypothesis 3 where foreign environmental factors are positively related to the
effectiveness of the development decisions a firm’s international marketing
strategy, and Hypothesis 4 where public and private support networks in
foreign markets are positively related to the effectiveness of the development
decisions a firm’s international marketing strategy.
4.3.6
Non-Parametric Analysis
Due to the smaller sample size of the data available for analysis, a nonparametric technique using the Spearman rank correlation coefficient
(Spearman's rho) test was used to verify the significance of relationship
between the variables.
It was found that there were significant positive correlation between the
dependent
variable
IMS
development
decisions
effectiveness
and
independent variables market factors in domestic markets (rs = 0.83, p <
0.05), industry factors in domestic markets (rs = 0.78, p < 0.05), market factors
in foreign markets (rs = 0.86, p < 0.05), industry factors in foreign markets (rs =
0.83, p < 0.05), new firm’s internal factors (rs = 0.77, p < 0.05), foreign
environmental factors (rs = 0.87, p < 0.05) and non-significant negative
correlation between the dependent variable IMS development decisions
effectiveness and independent variable support networks factors in foreign
markets, rs = - 0.07, p > 0.05 (see Appendix 10).
189
The correlation between independent and dependent variables is
shown in Table 4.17.
Table 4.: Correlation between independent and dependent variables
Market
Factors in
Domestic
Market
Industry
Factors
in
Domestic
Market
Market
Factors
in
Foreign
Market
Industry
Factors
in
Foreign
Market
Foreign
Environmental
Factors
Support
Network
Factors in
Foreign
Markets
New
Firm's
Internal
Factors
IMS
Development
Decisions
Effectiveness
Market Factors in
Domestic Market
1
0.89
0.86
0.80
0.92
0.07
0.90
0.83
Industry Factors in
Domestic Market
0.89
1
0.83
0.76
0.88
0.10
0.88
0.78
Market Factors in
Foreign Market
0.86
0.83
1
0.80
0.89
-0.07
0.82
0.86
Industry Factors in
Foreign Market
0.80
0.76
0.80
1
0.91
0.01
0.71
0.83
0.92
0.88
0.89
0.91
1
0.03
0.85
0.87
Support Network
Factors in Foreign
Markets
0.07
0.10
-0.07
0.01
0.03
1
0.01
-0.07
New Firm's
Internal Factors
0.90
0.84
0.82
0.71
0.85
0.01
1
0.77
IMS Development
Decisions
Effectiveness
0.83
0.78
0.86
0.83
0.87
-0.07
0.77
1
Foreign
Environmental
Factors
Source: Analysis of survey data
This indicates that the strength of the linear relationship between the
independent variables market factors in domestic markets, industry factors in
domestic markets, market factors in foreign markets, industry factors in
foreign markets, new firm’s internal factors, foreign environmental factors and
the dependent variable IMS development decisions effectiveness are strong,
whereas the strength of the linear relationship between the independent
variable support networks factors in foreign markets with other variables is
very weak.
190
4.4
Summary of Research Findings
Findings from the qualitative data gathered during the exploratory research
phase were incorporated into the final survey instrument to test the
hypotheses using quantitative methods in the descriptive and causal research
phase.
Research findings from the quantitative data collected from the online
web-based survey carried out during the descriptive and causal research
phase are presented in the following tables. The results of the demographic
data of respondents are summarised in Table 4.18.
Table 4.: Demographics of Respondents
Characteristics of respondents
Percentage of the largest category
Industry category
37.50% are in the high technology sector
Ownership type
62.50% are Australian owned proprietary company
Length of international experience
83.30% have more than 5 years
Product/services marketed overseas
70.80% are in more than 10 countries
Annual international turnover
66.70% are between A$5.0 to A$50.0 million
Market entry mode
100% are exporters
Source: Analysis of survey data
The results of the hypotheses testing are summarised in Table 4.19 on
the next page.
191
Table 4.: Summary of Hypotheses Testing
Research Hypotheses
Hypothesis 1a: The consideration of market factors in domestic
markets is positively related to the effectiveness of the development
decisions of a firm’s international marketing strategy.
Hypothesis 1b: The consideration of industry factors in domestic
markets is positively related to the effectiveness of the development
decisions of a firm’s international marketing strategy.
Hypothesis 1c: The consideration of market factors in foreign markets
is positively related to the effectiveness of the development decisions of
a firm’s international marketing strategy.
Results
Not Supported
Not Supported
Not Supported
Hypothesis 1d: The consideration of industry factors in foreign markets
is positively related to the effectiveness of the development decisions of
a firm’s international marketing strategy.
Not Supported
Hypothesis 2: The consideration of the firm's internal factors is
positively related to the effectiveness of the development decisions of a
firm’s international marketing strategy.
Not Supported
Hypothesis 3: The consideration of foreign environmental factors is
positively related to the effectiveness of the development decisions of a
firm’s international marketing strategy.
Not Supported
Hypothesis 4: The consideration of public and private support
networks in foreign markets is positively related to the effectiveness of
the development decisions of a firm’s international marketing strategy.
Not Supported
Source: Analysis of survey data
4.5
Conclusion
This chapter analyses the data collected from respondents who have
participated in the in-depth interviews and online web-based survey. Findings
from the qualitative data gathered from the in-depth interviews during the
exploratory research phase were incorporated into the final survey
questionnaire to test the hypotheses using quantitative methods in the
descriptive and causal research phase.
192
Of 204 questionnaires emailed to the international marketing / export
departments of these firms, 54 were returned with six responses not fully
completed, thus providing 48 usable valid responses for further analysis.
The results were classified into three categories: preliminary analysis of
data, classification of data and the statistical testing of hypotheses. In the
preliminary analysis of data, the raw data was screened and the internal
consistency for composite variables was checked. Univariate and multivariate
outliers were also examined.
Tests of normality of distribution were carried out and no significant
skew and kurtosis in the distribution were detected, and therefore the
distribution was close to normal. Furthermore, descriptive analysis of data to
measure the central tendency and dispersion, and display the frequency
distribution also confirmed that the data set was close to a normal distribution.
Test for the presence of common method variance effect were carried
out using Harman’s one-factor test resulting in non-substantial amount of
common method variance detected.
For the reliability of data, Cronbach’s alpha value of each composite
variable was calculated. These tests indicated that all eight composite
variables were reliable. Validity of data was ensured by performing Davis
(2005) four-step procedure to address the content (face) validity issue.
In the testing of hypotheses concerning relationships between market
factors in domestic markets, industry factors in domestic markets, market
factors in foreign markets, industry factors in foreign markets, new firm’s
internal factors, foreign environmental factors, support networks factors in
foreign markets and IMS development decisions effectiveness; standard
193
multiple linear regression analysis was used. The findings showed that the all
four hypotheses were not supported by the survey data due to a lack of
statistically significant results.
Finally, a non-parametric analysis using Spearman rank correlation
coefficient test was performed and had shown that there were significant
positive correlation between the dependent variable and most independent
variables, except for the support networks factors in foreign markets
independent variable where a non-significant negative correlation was found.
The next chapter will summarise this study, its contribution to
knowledge, its implications for theory, policy and practice as well as its
limitations and provide recommendations for future research.
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CHAPTER FIVE
Conclusions and Implications
Chapter 1
Introduction
Chapter 2
Literature Review
Chapter 3
Research Design
and Methodology
Chapter 4
Data Analysis and
Research Findings
5.1
Introduction
Chapter 5
Conclusions and
Implications
5.2
Discussion of
Hypotheses
5.3
Conclusions from
Research Findings
5.4
Contribution of this
Research
5.5
Limitations of this
Research
5.6
Future Research
5.7
Conclusion
195
5
CONCLUSIONS AND IMPLICATIONS
5.1
Introduction
In the previous chapter, the research findings were presented, with a detailed
description of the data analysis procedures, together with a description of the
statistical tests performed on the collected data.
The chapter begins with a discussion of the research findings for each
hypothesis in relation to the literature review (Section 5.2). Research findings
to address the research question and its conclusions are examined (Section
5.3).
Next, the study’s contribution to knowledge, and its implications for
theory, policy and practice study are covered (Section 5.4) and are followed
by a discussion on the limitations of this research (Section 5.5).
Recommendations for future research are presented (Section 5.6) and the
study is summarised in the final conclusion (Section 5.7).
5.2
Discussion of Hypotheses Underpinning the
Research Questions
Although the importance of international marketing strategy developmental
decisions were argued in academic literature and international marketing
texts, the current international market development process models
promulgated in international marketing texts reflect neither the breadth of
theory underpinning the factors influencing the development of international
marketing strategy, nor approaches adopted by successful Australian
exporters.
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The literature review has identified key aspects of current international
marketing strategy development processes. Following this theoretical
guidance and with an integrated qualitative and quantitative mixed methods
research methodology that brings together theories underpinning international
market strategy development with successful business practice; and in pursuit
of identifying the factors that successful Australian exporters consider in
developing their international marketing strategy, four hypotheses were
developed and tested. The four hypotheses with the first hypothesis
separated into four sub-hypotheses that were tested using quantitative
methods are as follows:
Hypothesis 1:
The consideration of market and industry factors in both
domestic and foreign markets are positively related to the
effectiveness of the development decisions of a firm’s
international marketing strategy.
Hypothesis 1a: The consideration of market factors in domestic
markets is positively related to the effectiveness of the
development
decisions
of
a
firm’s
international
marketing strategy.
Hypothesis 1b: The consideration of industry factors in domestic
markets is positively related to the effectiveness of the
development
decisions
marketing strategy.
197
of
a
firm’s
international
Hypothesis 1c: The consideration of market factors in foreign markets
is positively related to the effectiveness of the
development
decisions
of
a
firm’s
international
marketing strategy.
Hypothesis 1d: The consideration of industry factors in foreign markets
is positively related to the effectiveness of the
development
decisions
of
a
firm’s
international
marketing strategy.
Hypothesis 2: The consideration of the firm's internal factors is positively
related to the effectiveness of the development decisions of
a firm’s international marketing strategy.
Hypothesis 3: The consideration of foreign environmental factors is positively
related to the effectiveness of the development decisions of
a firm’s international marketing strategy.
Hypothesis 4: The consideration of public and private support networks in
foreign markets is positively related to the effectiveness of
the development decisions of a firm’s international marketing
strategy.
These hypotheses were developed from the literature review and
reflected the international marketing strategy development behaviour of the
firms that participated in the qualitative research. They were then subjected to
quantitative analysis to assess whether they were generalisable to the
population of specific interest to this research, that is, successful exporters in
198
Australia. The findings of the mixed methods research were reported in
Chapter Four.
In the following section, research findings relating to each of the above
empirically tested hypotheses are discussed with conclusions drawn.
5.2.1 Review and Conclusion for Hypothesis One
The first hypothesis developed from the literature review is:
Hypothesis 1:
The consideration of market and industry factors in both
domestic and foreign markets are positively related to the
effectiveness of the development decisions of a firm’s
international marketing strategy.
This is separated into four sub-hypotheses, each of which represents a
market or industry factor in both domestic and foreign markets studied in this
research, and are tested separately as follows:
Hypothesis 1a: The consideration of market factors in domestic markets is
positively related to the effectiveness of the development
decisions of a firm’s international marketing strategy.
Hypothesis 1b: The consideration of industry factors in domestic markets is
positively related to the effectiveness of the development
decisions of a firm’s international marketing strategy.
Hypothesis 1c: The consideration of market factors in foreign markets is
positively related to the effectiveness of the development
decisions of a firm’s international marketing strategy.
199
Hypothesis 1d: The consideration of industry factors in foreign markets is
positively related to the effectiveness of the development
decisions of a firm’s international marketing strategy.
Review of the market and industry factors in both the domestic and
foreign markets are discussed below. Conversely, as reported by the research
findings in Chapter Four, the four sub-hypotheses of the first hypothesis were
not empirically supported by the survey’s quantitative data analysis due to the
lack of statistically significant results on the individual predicator. This implies
that market and industry factors in both domestic and foreign markets do not
have a positive relationship with the effectiveness of the development
decisions of international marketing strategy among successful Australian
exporters.
5.2.1.1
Market and Industry Factors in Domestic Markets
The findings of this study provide some insight into the major factors that have
influenced the development of international marketing strategy practices of
exporting businesses in Australia. The qualitative study found that market and
industry factors in the domestic markets are considered to be minor factors in
the development of international marketing strategies among successful
Australian exporters. However, this was not empirically supported by the
quantitative data due to a lack of statistically significant results.
Such market and industry factors in the domestic markets include (1)
size of the customer base, (2) competition, (3) the power of substitutes for the
firm’s products/services, (4) growth potential, (5) controls and restrictions on
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the industry, (6) bargaining power of buyers and suppliers, and (7) firm's
competitive position.
These factors were raised in the in-depth interviews of the qualitative
study by all the interviewees, thus validating that market and industry factors
in the domestic markets were considered in the development of their firm’s
international marketing strategies.
However, due to a lack of statistically significant results from the
survey’s quantitative data analysis, the hypothesis that there is a positive
relationship between market and industry factors in domestic markets, and the
effectiveness of the development decisions of a firm’s international marketing
strategy cannot be empirically supported, even though indication of a positive
relationship exists.
According to the literature review, all the above factors have, to some
extent, affected the decision of businesses to start their export endeavour
(Doole & Lowe 2008). With a shrinking customer base and rising
competitiveness in the local market, the only avenue for growth for many
businesses is to export into international markets. Similarly, more substitutes
for the firm’s products/services, slowing growth potential, tougher controls and
restrictions on the industry, rising bargaining power of buyers and suppliers,
and declining firm's competitive position in the local market can also affect
many firms’ decision to look towards international markets (Doole & Lowe
2008).
Thus, with regards to the market and industry factors in the domestic
markets, the qualitative results support the argument by Doole and Lowe
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(2008) that these factors do influence the development of international
marketing strategy and contribute to more exports.
However from the qualitative study, it seems that successful Australian
exporters do consider market and industry factors in domestic markets when
developing their international marketing strategy, but do not place great
importance on these factors; deeming them as minor factors in their
international marketing strategy development. Perhaps, this is because the
domestic market in Australia is still lucrative and growing.
5.2.1.2
Market and Industry Factors in Foreign Markets
The qualitative study found that market and industry factors in foreign markets
are factors in the development of international marketing strategies among
successful Australian exporters.
Such market and industry factors in foreign markets include (1) size of
the customer base, (2) competition, (3) the power of substitutes for the firm’s
products/services, (4) growth potential, (5) controls and restrictions on the
industry, (6) bargaining power of buyers and suppliers, (7) firm's competitive
position, (8) overseas distribution networks, (9) level of foreign government
control on the industry, (10) overseas markets’ commercial practices, (11)
threat of new entrants to the industry, and (12) foreign markets’ customs and
practices of the industry.
All the above factors were validated in the qualitative study as most
interviewees mentioned that they had considered the above market and
industry factors in the foreign markets when developing their international
marketing strategies, except for one ICT e-commerce company that did not
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need to consider the market and industry factors in the foreign markets. This
is perhaps because their business model is virtual in nature, which hardly has
any effects on the competition, customer base, product/services substitution,
distribution networks and local/ commercial practices in the foreign markets.
However, due to a lack of statistically significant results from the
survey’s quantitative data analysis, the hypothesis that there is a positive
relationship between market and industry factors in foreign markets, and the
effectiveness of the development decisions of a firm’s international marketing
strategy cannot be empirically supported, even though there is indication of a
positive relationship.
It has been established through the qualitative study among successful
exporters, that when deciding to export to any particular international market,
market attractiveness is one of the primary market factors considered in the
development of their international marketing strategy. This finding supports
the study of Rahman’s (2001:2006) key factors on international market
selection considered by successful Australian international firms. Market
attractiveness is affected by market factors, such as size of the customer
base; growth potential in the markets and customer bargaining power; and by
competitive factors, such as the structure of competition and substitutes.
Competitiveness for the firm means its ability to increase earnings by
expanding sales and/or profit margins in the markets in which it competes,
that is, the firm’s competitive position. This competitive position is influenced
by its market position – share, differentiation, product range and image; by its
economic and technological position – cost structure, capacity, patents; and
capability: – management and marketing strengths, channel power and its
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relationships with labour and government. The extent to which a firm proves
successful in defending its position will clearly be dependent upon its ability
and the strategy it chooses to follow.
Competition on the other hand means the firm’s ability to defend its
market position as the rivalry in products and production processes evolve.
Competition in home markets is often the catalyst for expanding into overseas
markets. Furthermore, the analysis of competition in target markets is always
carried out when developing an international marketing strategy, as its
success is dependent upon the strength of the competitive analysis on which
it is based. Thus, competition among marketers in the foreign markets is well
considered in the development of an international marketing strategy as it is
another primary factor influencing the success of their strategy.
Another market factor that has an impact on the development of an
international marketing strategy is the distribution networks in the foreign
markets. Particularly for MNCs, the supply chain internationalisation of
outsourcing its supplies is an increasingly important consideration in their
strategic decisions. Thus, the distribution networks in target markets are
important factors for these organisations when developing their international
marketing strategy. At the same time, SMEs are also benefiting from these
strategic moves by piggybacking on the MNC’s international development and
expansion.
This distribution networks in overseas markets supports Ling-Yee and
Ogunmokun’s (2001) research that supply chain or channel support do
influence the development of international marketing strategy and were found
204
to significantly and positively correlate with export performance of the
enterprise.
In addition to the above market factors, industry factors in foreign
markets such as the level of foreign government control, and restrictions on
the industry, have an impact on the development of international marketing
strategies. These governmental controls can include measures such as tariffs
and non-tariff barriers like quotas. Tariffs have strategic implications for
exporters as it places them at a competitive disadvantage to locally competing
firms. Although tariffs have generally declined over recent years, they still
influence the price competitiveness in international markets and, as such, are
considered in the development of an international marketing strategy.
These findings in the qualitative study are in line with Doole and Lowe
(2003) and Jeannet and Hennessey (2004) argument that the presence of
barriers such as tariffs and quotas affect an organisation’s international
marketing strategy development process.
Likewise, the threat of new entrants to the industry, foreign markets’
customs and commercial practices of the industry have a similar effect on the
development of an international marketing strategy. New entrants to the
industry mean more competition for the firm; and to be successful in overseas
markets, the local customs and commercial practices of the industry must not
be neglected.
205
5.2.2 Review and Conclusion for Hypothesis Two
The second hypothesis developed from the literature review is:
Hypothesis 2: The consideration of the firm's internal factors is positively
related to the effectiveness of the development decisions of
a firm’s international marketing strategy.
In this study, the firm’s internal factors refer to (1) the firm's attitude
towards risk, (2) the overall business objectives, and (3) the necessary
business capabilities, resources and competitive advantages of the firm.
One of the strategic guidelines that successful Australian exporters use
in their international marketing strategy development is their risk acceptance
guideline. Like individuals, firms may be risk-averse, risk-neutral or risk
seeking (Hubbard 2004). Certain international markets may seem attractive in
absolute terms, but may not be selected if the firm finds the market too risky in
relation to its defined risk acceptance guideline. This confirms that an
organisational attitude towards risk also plays an important part in the
development of international marketing strategy (Tse et al. 1988).
Business objectives of the organisation involve assessing the
statements of the organisation such as its vision and/or mission to understand
what it is trying to do, and to comprehend its organisational values. Often, the
decision to market their products / services overseas is reflected in the
business objectives of the organisation. This supports the view of Knight
(2000) that objectives of the organisation have a large influence in the
development of an organisation’s international marketing strategy.
The success of an international marketing strategy is influenced by the
existence of complementary markets and marketing skills that can increase
206
the total market return on investment. This influence normally occurs where
the firm has some skills or expertise that will allow quick access to the market
or where the target market is compatible with existing markets of the firm. To
compete successfully in today's international markets, firms and their
managers must master certain skills and competencies. Such competencies
include: (1) strategic competence, that is, the ability to focus on strategic or
long-term requirements of their firms; and (2) functional competence, or
marketing and managerial competence, that is, being able to design and
implement market strategies and organise them effectively. Firms vary widely
in these areas of competencies, and different overseas markets require
different levels of competencies for the firms to be successful. As a result, a
match between the target market requirements and the firm's capabilities is
vital when developing an international marketing strategy. As such, firmspecific characteristics and export marketing strategy significantly influence
the international marketing performance of these businesses (Lu & Julian
2008).
Another question is whether the pursuit of a particular strategy is
compatible with firm's competitive advantages. When a firm succeeds in
creating greater value for customers than do its competitors, that firm is said
to enjoy competitive advantage. Thus, competitive advantage is measured in
relation to rivals in a given industry. Value, competitive advantage, and the
focus required to achieve them, are universal in their relevance and should
guide marketing efforts in international markets.
Findings from the qualitative study among the five companies are very
similar. All the companies have taken into consideration their business
207
objectives,
competitive
advantages,
attitude
towards
risk,
business’s
resources and core capabilities, and top management aspirations and
commitment when developing their international marketing strategies, with
only one company not taking into consideration their firm’s attitude towards
risk. Thus, it validate that the firm’s internal factors were considered when
developing their international marketing strategies.
Thus, with regards to the firm’s internal factors, the qualitative study
support the argument by Cavusgil and Zou (1994) that international marketing
strategy is influenced by both internal and external factors and are the key
determinants of export marketing performance.
However, due to a lack of statistically significant results from the
survey’s quantitative data analysis, the hypothesis that there is a positive
relationship between the firm’s internal factors and the effectiveness of the
development decisions of a firm’s international marketing strategy cannot be
empirically supported, even though indication of a positive relationship exists.
This conclusion therefore implies that the firm’s internal factors do not
influence the development of international marketing strategy among
successful Australian exporters.
5.2.3 Review and Conclusion for Hypothesis Three
The third hypothesis developed from the literature review is:
Hypothesis 3: The consideration of foreign environmental factors is positively
related to the effectiveness of the development decisions of
a firm’s international marketing strategy.
208
External macro-environmental issues include those general influences
that affect many industries. These issues are beyond the control of the
organisation. However, they have some of the most profound influences on an
organisation’s international marketing strategy development. In this study, the
external environmental factors are: (1) economic, (2) political, (3) legal, (4)
technological, and (5) social / cultural.
Economic indicators could include GNP, personal disposable income
growth rates, inflation rates, unemployment levels, interest rates, exchange
rates, taxation rates and wage rates. As there are more than 200 countries in
the world, there are varying GNP per capita, economic conditions and levels
of economic development. Thus, it is important that exporters have an
understanding of economic developments in their target markets and how
they impinge on their international marketing strategy. Changes in economic
policies in the targeted countries can in many ways have an effect on the
adoption of international marketing strategy.
The political environment is intrinsically linked to government’s attitude
to business and freedom within which it allows firms to operate. This often
means that the political arena is the most volatile area of international
marketing as the tendencies of governments to change regulations can
seriously affect the development of an international marketing strategy,
providing it with both opportunities and threats. As stated by Jain (2004), the
invisible hand and the heavy interventionist role of government do have an
impact on the development of international marketing strategy.
Apart from specific legislation which comes from political influences,
developments in the legal system can also have an important influence on the
209
development of an international marketing strategy (Bradley 2005). Therefore,
it is important for the firm to know the legal environment in each of its markets,
as it will impact upon the organisation’s ability to market into particular
overseas countries. These laws in the target markets constitute the rules of
the game for their business activities and will affect the marketing mix in terms
of products, price, distribution and promotional activities quite dramatically. At
the same time, the ability to envisage and handle legal problems in foreign
countries was a major attribute in high performing Australian exporters as
according to Ogunmokun and Ng (2004).
Technology is a major driving force both in international marketing and
in the move towards a more global marketplace. The impact of technological
advances can be seen in all aspects of the marketing process. Particularly,
marketers must be able to recognise the limits of their technology, know what
new technologies are emerging, and decide when to incorporate new
technology in their products and services when developing their international
marketing strategy (Jain 2004). As such, exporters need to consider the
technological environment in their target markets when developing their
international marketing strategy.
Social and cultural trends are often difficult to capture in strategic
analysis, because they change almost imperceptibly. However, their
influences on the development of international marketing strategy are
immense. Cultural influences have been identified as significant determinants
of international marketing behaviour and export performance as according to
Faaborg et al. (2005), Rugimbana and Nwankwo (2003) and Thirkell and
Ramadhani (1998).
210
Differences in social conditions, religion and culture, all affect
consumers’ perceptions and buying behaviour. It is in this area that
determines the extent to which consumers across the globe are classified as
either similar or different and so advocates the marketing concept of
standardisation and adaptation.
It is interesting to note that the firm’s internal factors discussed in the
previous sub-section, and external environmental factors discussed here, are
both evaluated in the strategy development process at all three levels of the
organisation’s strategies, that is, its functional, business and corporate
strategy. Perhaps this is so because according to the literature, strategy
development in organisations, irrespective of the strategy hierarchy, takes into
consideration both internal and external factors (Hubbard 2004, Cavusgil &
Zou 1994).
Findings from the qualitative study indicate that economic, political,
legal, technological, and social / cultural factors have been taken into
consideration when developing their firm’s international marketing strategies.
However, an observation was made that in the ICT industries, where the
business model of e-commerce companies is virtual and operations are
rooted solely on the Internet World Wide Web, environmental factors in the
foreign markets are not taken into consideration when firms are developing
their international marketing strategy as they do not need strategies to target
specific markets due to the fact that the Internet is global in nature.
Although many studies have examined strategy development and
many models promulgated with a conclusive decision to consider both the
firm’s internal and external environmental factors when developing a strategy
211
at functional, business and corporate levels, it may be wise for exporters to
consider the specific market and industry factors in both domestic and foreign
markets that were identified in this study when developing their international
marketing strategy.
As reported by the research findings in Chapter Four, this third
hypothesis was not empirically supported by the quantitative data of the
survey due to a lack of statistically significant results, even though there is
indication of a positive relationship. This implies that environmental factors do
not influence the development of international marketing strategy among
successful Australian exporters.
5.2.4 Review and Conclusion for Hypothesis Four
The fourth hypothesis developed from the literature review is:
Hypothesis 4: The consideration of public and private support networks in
foreign markets is positively related to the effectiveness of
the development decisions of a firm’s international marketing
strategy.
In this study, public support networks are the Australian government
agencies, at both federal and state / territory levels that provide international
marketing advice and intelligence for Australian exporters. These government
agencies include Austrade and the various states / territories trade and
investment offices in overseas countries. On the contrary, private support
networks refer to personal contacts with family, friends, other business
associates with whom they have personal relationships, especially for SMEs,
and also includes distribution channels partners like agents and/or
212
distributors, chambers of commerce and business support agencies with
whom they have commercial relationships in the foreign countries.
The Australian government recognises the benefits of exports in terms
of the contribution they make to jobs and wealth creation for the country, and
offers support to Australian international marketers for their development in
general, and the encouragement of exporting in particular. Other public and
private organisations also provide the exporters with a range of services to
support their international marketing activity.
According to the literature review, these public and private support
networks are factors to be considered when developing an international
marketing strategy, particularly for SMEs (Doole & Lowe 2008).
On the contrary, the findings of the qualitative research found that
public support networks and particularly private support networks were rarely
considered among the five companies interviewed when developing their
firm’s international marketing strategies.
Likewise, the findings of the quantitative study as reported in Chapter
Four established that the fourth hypothesis was not empirically supported.
Furthermore, there is indication of a negative relationship, though the results
are statistically non-significant.
Therefore, the conclusion implies that public and private support
networks in foreign markets do not influence the development of international
marketing strategy among successful Australian exporters.
It may be argued that the majority of successful exporters who
participated in this research are mostly experienced international marketers
with more than five years of international business experience, have marketed
213
their products / services overseas in more than ten countries and with an
international turnover of more than AUD5.0 million (see Section 4.6.2 Table
4.36).
These established players generally have their own support resources
and thus do not give too much consideration to the issues of public and
private support networks as key factors in the development of their
international marketing strategy. However, if this research was conducted
among new international marketers with little international business
experience, this particular finding could have been different.
5.3
Conclusions from the Research Findings
Regarding the Research Questions
If considered against the first research question addressed by this study as
raised in Chapter One:
What are the key factors influencing the development of international
marketing strategies among successful Australian exporters?
The findings of this study lead to the following conclusions:
(1)
Market and industry factors in the domestic and foreign markets are
primary factors that influence the development of international
marketing strategy among successful exporters.
(2)
Firm’s internal factors are also primary factors that influence the
development of international marketing strategy among successful
exporters.
214
(3)
External environmental factors in the foreign markets are primary
factors and have a strong influence in the development of international
marketing strategy among successful exporters.
(4)
The public and private support networks in the foreign markets are
extraneous factors and do not influence the development of
international marketing strategy among successful exporters.
If considered against the second research question addressed by this study
as raised in Chapter One:
Are the key factors influencing the development of international
marketing strategies among successful Australian exporters related to
the effectiveness of the strategy development decisions?
The findings of this study lead to the following conclusions:
(1)
Australian successful exporters follow a variety of multi-dimensional
strategy development processes, and consider a wide range of internal
and external factors in both the domestic and foreign markets when
developing their international marketing strategies.
(2)
It is the integration of these considered factors, especially all the
primary factors as a whole within the strategy development process
that determine the decisions on the choice and direction of the
organisation’s international marketing strategy, and therefore the above
key factors are directly related to the effectiveness of the strategy
development decisions.
215
These findings are consistent with recommendations and findings of
strategic management theories, decision making theories, international
marketing theories, marketing strategy theories and international marketing
strategy theories as discussed in the literature review in Chapter Two of this
thesis, except for item 4 relating to the first research question, the networks
support factor in foreign markets.
Perhaps this is because the research was conducted among
successful exporters who are either finalists or winners of the Australian
export awards, and are therefore accomplished and established players in
international markets.
This might not be the case if the research was conducted among new
and lesser experienced exporters. Then the public and private support
networks in the foreign markets could be a factor to be considered in the
development of their international marketing strategy.
5.4
Contributions of This Research
The development of an international marketing strategy is an important aspect
of international marketing. Every time a business decides to market its
products and/or services overseas, it must develop an appropriate
international marketing strategy. This development process is based on
managerial decisions with due considerations to the many factors, both
internally and externally that affect this process.
Accordingly, it is vital that international marketers should have some
pre-set decision variables to guide their development of an international
marketing strategy, as well as understand the factors that influence the
216
development process of their strategy. This research has identified these
factors and also confirms that all these factors contribute significantly to the
development of an international marketing strategy, and may be followed by
other aspiring businesses.
International marketing academics have identified the importance of an
international marketing strategy and have presented a range of decision
variables and various models to guide the development process. However,
most of these models are mere propositions and have not been empirically
tested in order for these theories to be integrated into the general body of
international marketing strategy theory.
Furthermore, there has been minimal reported research studying the
factors influencing the development of international marketing strategy on
exporters carried out in Australia. By empirical testing of the variables
affecting the development process of international marketing strategies
among successfully exporters in Australia, this research fills that gap.
This work represents one of the few empirical studies on the
development process of international marketing strategy. Accordingly, in the
following section the contribution of this research will be analysed from
academic and practitioner perspectives.
5.4.1 Implications for Theory
In one sense there is nothing new in the findings of this research; many of the
factors or variables described have been previously established in other areas
of international marketing, marketing strategy and strategic marketing.
However, the implications of such findings on the development of international
217
marketing strategies among successful exporters in Australia have been
overlooked by researchers. This empirical study fills that gap.
This research successfully integrates and applies existing knowledge in
decision-making theories, strategic management theories, marketing strategy
theories, marketing theories, international marketing theories, and trade
theories to this research and empirically tests the research hypotheses.
It identifies and establishes the factors related to the development
process of international marketing strategies among Australian exporters.
These factors play a significant role in the decisions on the choice and
direction of an organisation’s international marketing strategy.
These key factors must be taken into consideration by any business
when developing their international marketing strategy if they hope to achieve
sustainable progress in their international marketing operations.
This research has identified and tested specific hypotheses, and has
developed measurement scales for those hypotheses. These hypotheses and
their measurement scales can now form the basis for further research in this
area both in Australia and overseas. Compared to internationalisation process
theories, the development process of an international marketing strategy is
not a well-researched area. There has been minimal reported study in
Australia and such research has not been widely reported overseas. This
research is a major study on an important, but overlooked, area of business
importance.
Another major contribution of this research is the successful integration
of both qualitative and quantitative approaches in this study. The use of mixed
methods research methodology reflects an attempt to secure an in-depth
218
understanding of the phenomenon in question which provide a greater
diversity of views and stronger inferences on the research accuracy, and offer
a fuller and more comprehensive study.
5.4.2 Implications for Policy and Practice
The development of an international marketing strategy plays a major function
in the overall process of moving into international markets. Many international
marketers take a leading role in the development process of their international
marketing strategy. Others acquire expert help from consultants and external
agencies. Accordingly, the findings of this research will be of interest to
international marketers both in Australia and overseas.
The findings in this research offers some initial evidence on the factors
influencing the development of international marketing strategy that Australian
international marketers, including exporters, as well as firms using other entry
modes into international markets may find useful. The results of the research
findings are applicable to firms of different sizes and it has the potential to be
the basis of building a decision support system for the development of a firm's
international marketing strategy.
Finally, the research findings will be useful for government agencies
like Austrade and other states and territories’ trade and investment offices that
provide specialist help in international marketing to increase their clients’
exports
to
overseas
markets,
and
raise
Australia’s
international
competitiveness.
Overall, this research has both academic and practical implications.
For practitioners, the research findings contribute to better and improved
219
understanding of the key factors influencing international marketing strategy
development which will positively impact directly on their business in foreign
markets. For academics, it provides empirical evidence and opens up
potential new areas for further research.
5.5
Limitations of this Research
In regard to this research, some of the major limitations are as follows:
(1)
Geographic limitation - Australia is a small, open economy and a
relatively minor player internationally with less than two percent share
of the world GDP and less than one percent share of the annual
international trade in 2007 (World Trade Organization 2008). As this
research has been carried out in Australia only, the findings of this
research may not be considered as an international phenomenon. To
determine international validity, these tests need to be replicated with
similar firms in other countries.
(2)
Weightings limitation - Another limitation of this research is that the
findings of the variables are reflective of the international marketing
strategy development behaviour of successful exporters in Australia.
This research identifies the factors that affect the development process
of international marketing strategy and the measurement scales of
each of those factors. It does not take into consideration the individual
weighting that may be assigned by each firms to those factors and its
measurement scales.
(3)
Time limitation - Time may be a factor in the development and
implementation of an international marketing strategy. An international
220
marketing strategy that has the potential for a particular product/service
today may not continue to have the same potential in a couple of years.
Similarly, an international marketing strategy that is not appropriate
today may turn out to hold potential in the future. This research does
not examine the time factor and its importance in the development of
an international marketing strategy.
5.6
Future Research
This pioneering study conducted among the successful Australian exporters
has the potential to open up new areas of empirical research. Similar studies
may be conducted among firms that are not that successful in international
marketing, to identify the processes and factors they consider when
developing their international marketing strategy.
The focus of this research has identified the factors influencing the
development of an international marketing strategy. Other similar research
can be undertaken to determine the process and factors affecting the
development of a marketing strategy for the domestic markets as well as for
the development of functional, business and corporate strategies for any
organisations.
The findings from this study are relevant only for Australian firms. As
Australia is a relatively small player in the international business arena, such
findings may or may not be representative of successful international
marketing in other countries. For the sake of generalisation, similar research
needs to be conducted among international marketers of other countries of
the world.
221
Whilst the respondents in this study are all international marketers,
some with joint ventures and/or direct investments in overseas countries; the
majority category are exporters as shown in the classification of data in
Chapter Four. Thus, further research can be undertaken to test other market
entry mode firms, to confirm this research applicability in different business
environments.
Findings of this research have identified the factors that are considered
in the development of an international marketing strategy. This research has
also identified the observed variables that measure those factors. However,
this research did not measure the relative importance of each of those factors
and variables in the international marketing strategy development process for
different firms. In reality, although each of those factors and associated
variables are included in their development of international marketing
strategy, it may well be the case that different firms put different weighting on
the factors and variables. While it was not an objective of this research to find
out such relative importance, if any, future research may be conducted to
establish whether individual firms will need to assign a firm-specific numerical
weight to each factor and variable to indicate their relative importance in the
development of the international marketing strategy process.
One major finding of the research is the importance of the parent firm's
guidelines in the development of an international marketing strategy,
especially for companies who are subsidiaries of MNCs. With increasing
numbers of Australian businesses being taken over by foreign firms, this issue
will have major implications in defining the international activities of such
222
businesses. Further research in this area needs to be conducted to assess
such implications.
Another interesting research finding was that firms whose business
model is virtual and operations rooted solely on the Internet World Wide Web
do not take into consideration any factors in the foreign markets when
developing their international marketing strategy compared to traditional
businesses. These unique phenomena and differences in the development of
strategies among virtual knowledge-based businesses using the World Wide
Web as a global marketplace need further research as we move into a
borderless new economy in the future.
5.7
Conclusion
The development of international marketing strategy is fundamental to the
success of any business attempting to market their products and/or services
overseas. There are many factors, both internal and external that impact on
the decisions in the development of international marketing strategy. This
research will examine the international marketing strategy practices of
successful Australian exporters; investigate what factors these businesses
consider and how these factors are related to the effectiveness of the strategy
development decisions.
Hence, the objective of this study is to explore the research problem
relating to determining the factors considered by Australian successful
exporters in developing their international marketing strategies and the
relationship, if any between the strategic developmental decisions and a
range of context variables. The findings of this research will benefit both the
223
academic and practitioner arena, contributing to a better and improved
understanding of the factors influencing the development of international
marketing strategies that would lead to an increase in Australia’s successful
exports to overseas markets.
The target population selected for this study were all successful
Australian exporters who were either finalists or winners of the various
categories of the Australian Export Awards for the five years from 2003 to
2007. This study was carried out solely in Australia from January 2007 to
February 2010.
The mixed methods research methodology employed in this study
includes qualitative methods through in-depth interviews in the exploratory
research stage and quantitative methods using an online survey questionnaire
in the descriptive and causal research stage to test the hypotheses developed
from the literature review.
From the literature review carried out, several factors were found that
have an impact on the decisions for the development of international
marketing strategy. These include market and industry factors in both
domestic
and
foreign
markets,
the
firm’s
internal
factors,
foreign
environmental factors and public and private support networks in the foreign
markets. Thus, four hypotheses were developed based on these factors to be
tested in the descriptive and explanatory research.
These factors were further validated in the qualitative study.
Subsequently, an online survey instrument in the form of a questionnaire was
designed with all of these factors as variables to be emailed to a sample of
respondents selected randomly from the target population. The collected data
224
was screened, cleaned and several statistical tests were performed using
SPSS version 14.0 for Windows software to analyse the data. However, due
to the lack of statistically significant results from the analysis of the survey
data, the four hypotheses were not supported.
It is believed that this study is one of the few undertaken to examine
the factors influencing the development of international marketing strategy of
Australian exporters. It is hoped that future research will replicate this study in
other countries. Such studies will not only substantiate this research, but also
offer new insights into understanding the factors influencing the decisions in
the development of an international marketing strategy on a global basis.
225
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APPENDICES
Appendix 1: Australian Export Awards (2007) Selection Criteria
Eligibility
Applications are invited from any organisation or firm which exports goods
and services of predominantly Australian origin.
Winners from past years are eligible to apply for the 2007 Export Awards
Winners of the six core State Export Award categories will automatically
become finalists in the 2007 Australian Export Awards.
Please note, there will be no separate application for the Australian Export
Awards and Austrade will not accept entries submitted directly and solely for
the 2006 Australian Export Awards.
To qualify to apply an applicant must:
• Earn foreign exchange.
• Operate as a separate business if part of a larger organisation.
• Produce goods or services with Australian content of at least 50 per cent of
the total sales value.
• Have been exporting for more than three years with the exception of
applicants for the New Exporter Award.
Note: Applications will not be accepted from organisations sponsoring State
Export Awards or the Australian Export Awards,
Winning organisations will be exporters which are corporate role models for
the Australian business community.
Winners will demonstrate what significantly differentiates their organisation
from other Australian exporters in the same business.
Judging Criteria
An independent panel of judges will base their selections on the following
criteria:
•
•
•
•
•
•
Level of export sales as a proportion of total sales - the term 'sales' refers
to revenue from primary business activity. This figure should not include
grants of any nature or extraordinary income not related to sales.
Export growth in the last five year period or since the organisation
commenced exporting.
The quality of the organisation's marketing strategy.
Sound capital base with financial resources to support export growth.
Internal company organisation to support export activity.
Other factors which judges may consider appropriate.
250
The judges' decision is final and no correspondence will be entered into.
This application form is also available on computer disk from your State
Export Award Organiser.
Categories
State winners will be selected in each of six core categories. State winners
will automatically become finalists in the 2006 Australian Export Awards. One
national winner will be selected in each of the six categories. The Australian
Exporters of the Year will be selected from six national category winners.
Categories are:
New Exporter
For outstanding export achievement by an organisation which has been
exporting manufactured goods or services for three years or less.
Small to Medium Manufacturers
For outstanding export achievement by a manufacturer with total annual sales
of $20 million or less.
Large Manufacturers
For outstanding export achievement by a manufacturer with total sales of
more than $20 million.
Mineral Products
For outstanding export achievement by an organisation exporting mineral
products.
Agricultural Products
For outstanding export achievement by an organisation exporting agricultural
products.
Services
For outstanding export achievement in a recognised Australian service
industry (the achievement must be quantifiable with specific export earnings
which are verifiable)
Source: Export Education & Training, Austrade (2007)
Guidelines for Applicants: Australian Export Awards
251
Appendix 2: Semi-structured Interview Guide
Interview Guide
Before commencement of the interview, have the informant read through the
‘Information Sheet for the Interview’.
Ask informant whether he or she needs any clarifications regarding the ‘Information
Sheet for the Interview’. If required, clarify any points raised by the informant.
After the details of the ‘Information Sheet for the Interview’ are understood by the
informant and before commencement of the interview, the ‘Informed Consent for
Interviews’ form needs to be completed. Run through this form with the informant,
delete whatever is required and ensure that informant sign this form, preferably with
a witness.
Following this pre-interview procedure, a brief explanation of the research project is
given to the informant and the in-depth interview begins with the following questions:
Start with a series of closed-ended questions to ‘warm-up’ the informant:

What category of ownership does this business fall into?

How long has the business been involved in international markets?

Presently, in how many overseas countries are your product/ services been
marketed?

In addition to exporting, do your firm have other mode of international
involvement, like joint venture, direct investment and/or contractual
agreement overseas?

Can you tell me the approximate international turnover of your business in the
last financial year?
After these ‘warm-up’ closed ended questions, it is follow by more open-ended
questions as follows:

As a successful exporter, tell me how does your business develop winning
international marketing strategy?

Can you tell me some of the factors your business considers in developing
successful international marketing strategies?

How are these factors integrated into the development process?

Do you consider market and industry factors in the domestic market when
developing your business international marketing strategy? IF YES,

Tell me about some of these domestic market and industry factors that affect
your decisions in the development of your business’s international marketing
strategy?
252

How these domestic market and industry factors do affects the development
of your business’s international marketing strategy?

Do you consider market and industry factors in the foreign market when
developing your business international marketing strategy? IF YES,

Tell me about some of these foreign market and industry factors that affect
your decisions in the development of your business’s international marketing
strategy?

How these foreign market and industry factors do affects the development of
your business’s international marketing strategy?

Do you consider the firm’s internal factors when developing your business
international marketing strategy? IF YES,

Tell me what are some of the firm’s internal factors that affect your decisions
in the development of your business’s international marketing strategy?

How these internal factors do affects the development of your business’s
international marketing strategy?

Do you consider the foreign environmental factors when developing your
business international marketing strategy? IF YES,

Tell me what are some of the foreign environmental factors that affect your
decisions in the development of your business’s international marketing
strategy?

How these foreign environmental factors do affects the development of your
business’s international marketing strategy?

Does private and public support networks in foreign countries affects your
decisions in the development of your business’s international marketing
strategy?

If yes, how do these private and public support networks in foreign countries
factors affects the development of your business’s international marketing
strategy?

Is there any other factors or information you like to contribute on how your
business develops winning international marketing strategy?
End of Interview
After completion of interview, thank the informant for his or her time. Let them know
that a summary of the research is available if requested.
253
Appendix 3: Sample Size Decision Table
Sample Size for a Given Population Size
Source: Adapted from Sekaran (2003, p. 294)
254
Appendix 4: Online Survey Questionnaire
255
256
257
258
259
260
261
Source: Developed for this research
http://tinyurl.com/44w6mx
262
Appendix 5: Information Sheet for Survey
INFORMATION SHEET FOR THE SURVEY
An empirical study on the factors influencing International Marketing Strategy
development among successful exporters in Australia
My name is Ricky Tang. I am conducting research on the above project through
Southern Cross University.
You are invited to participate in a study being conducted that seeks to examine the
international marketing strategies practices of successful Australian international
marketers.
The development of international marketing strategy is crucial in the success of any
business attempting to market their products and/or services overseas. There are
many factors, both internal and external that impact on the decisions on the
development of international marketing strategy. This study will examine what
factors do successful Australian exporters consider and how are these factors
integrated into the development process.
This research forms part of my Doctor of Business Administration studies and will be
supervised by Dr. Margo Poole.
Procedures to be followed
The survey should take roughly 10 minutes to complete. Important demographic
information will be collected. This will consist of your firm international business
experience, turnover, type of company etc. as it is necessary to provide group related
statistics. No other personal information will be collected by the researcher. It will be
an online survey with the researcher providing a questionnaire and you will be asked
to choose an appropriate answer based on your organisation’s practices, rather than
what you think should be done. Please click on the following web link to access the
survey: http://tinyurl.com/44w6mx
Participation is purely voluntary and no financial remuneration or incentive will be
offered for taking part in this research. There are no travel expenses, nor are there
any costs associated with participation in this research. There is no cost to you apart
from your time.
However, if requested an executive summary of the findings can be email to you
when the study is completed.
263
Possible Discomforts and Risks
There are no foreseeable risks or discomforts for these surveys.
Responsibilities of the Researcher
It is our duty to make sure that any information given by you is protected. Your
name and other identifying information will not be attached to data collected. Your
name will only be used to facilitate sending the questionnaire to you. Any identifying
information will be destroyed after your participation in the study.
Responsibilities of the Participant
It is your responsibilities to provide one appropriate answer to each question that
are based on your organisation’s practices and that you answer all the questions.
Freedom of Consent
If you decide to participate, you are free to withdraw your consent and to
discontinue participation at any time. However, we would appreciate you letting us
know your decision.
Inquiries
This form is yours to keep for future reference. If you have any questions, we expect
you to ask us. If you have any additional questions at any time please ask:
Researcher: Ricky Tang
Graduate College of Management
Southern Cross University
PO Box 42
Tweed Heads NSW 2485
Supervisor: Dr. Margo Poole
Graduate College of Management
Southern Cross University
PO Box 42
Tweed Heads NSW 2485
Email: [email protected]
Phone: 0403771290
Email: [email protected]
Phone: 0415758959
The ethical aspects of this study have been approved by the Southern Cross
University Human Research Ethics Committee. The Approval Number is ECN-08057. If you have any complaints or reservations about any ethical aspect of your
participation in this research, you may contact the Committee through the Ethics
Complaints Officer:
Ms Sue Kelly
Ethics Complaints Officer and Secretary
HREC
Southern Cross University
PO Box 157
Lismore, NSW, 2480
Telephone (02) 6626-9139 or fax (02) 6626-9145
Email: [email protected]
All complaints, in the first instance, should be in writing to the above address. All
complaints are investigated fully and according to due process under the National
Statement and this University. Any complaint you make will be treated in confidence
and you will be informed of the outcome.
264
Appendix 6: Introductory email to the Survey
Date: 15 July 2008
Re: International Marketing Strategy Research by Southern Cross University
An Empirical Study on the Factors influencing International Marketing Strategy
Development among successful Exporters in Australia
To: The Manager – Export or (International) Marketing Department*
Dear Sir/Madam
The development of international marketing strategy is crucial in the success of any
business attempting to market their products and/or services overseas. There are
many factors, both internal and external that impact on the decisions in the
development of international marketing strategy. This study will examine what
factors do successful Australian exporters consider and how are these factors
integrated into the development process.
This study covers all Australian Export Awards finalists and winners from 2003 to
2007. As one such organisation, I would appreciate if you could take part in this
research which takes no more than 10 minutes of your time, yet the findings of this
study could benefit your organisation and others leading to increase in exports for
Australia.
You can access the online survey for this research at this web link:
http://tinyurl.com/44w6mx
Attached is an Information Sheet on the details regarding this research project for
your perusal and if requested, an executive summary of the findings can be email to
you when completed.
I wish to take this opportunity to thank you in anticipation of your kind co-operation.
Regards,
Ricky Tang, Researcher
Graduate College of Management
Southern Cross University, Australia
* If your organisation does not have an export or (international) marketing department, could the managing director,
general manager or someone with in-depth knowledge of the firm's exporting activities complete the questionnaire.
Encl: Survey Information Sheet
265
Appendix 7: Follow-up email to the Cover Letter
Date: 18 July 2008
Re: International Marketing Strategy Research by Southern Cross University
An Empirical Study on the Factors influencing International Marketing Strategy
Development among successful Exporters in Australia
To: The Manager – Export or (International) Marketing Department*
Dear Sir/Madam
Further to our recent email dated 15 July 2008 inviting your participation on the
above study. It will be greatly appreciated if you could take part in this research which
takes no more than 10 minutes of your time, yet the findings of this study could
benefit your organisation and others leading to increase in exports for Australia.
Please complete the online survey for this research by clicking on this web link:
http://tinyurl.com/44w6mx and if requested, an executive summary of the findings can
be email to you when completed.
Look forward to your response.
Thanks in advance.
Ricky Tang, Researcher
Graduate College of Management
Southern Cross University
Australia
* If your organisation does not have an export or (international) marketing department, could the managing director,
general manager or someone with in-depth knowledge of the firm's exporting activities complete the questionnaire.
PLEASE IGNORE THIS EMAIL IF YOU HAVE RESPONDED TO THE SURVEY
266
Appendix 8: Email reminder to the Survey
Date: 22 July 2008
Re: International Marketing Strategy Research by Southern Cross University
An Empirical Study on the Factors influencing International Marketing Strategy
Development among successful Exporters in Australia
To: The Manager – Export or (International) Marketing Department*
Dear Sir/Madam
Our recent emails dated 15 July 2008 and 18 July 2008 inviting your participation on
the above study refers.
It will be greatly appreciated if you could take part in this research which takes no
more than 10 minutes of your time, yet the findings of this study could benefit your
organisation and others leading to increase in exports for Australia.
Please complete the online survey for this research by clicking on this web link:
http://tinyurl.com/44w6mx and if requested, an executive summary of the findings can
be email to you when completed.
Look forward to your response.
Thanks in advance.
Ricky Tang, Researcher
Graduate College of Management
Southern Cross University
Australia
* If your organisation does not have an export or (international) marketing department, could the managing director,
general manager or someone with in-depth knowledge of the firm's exporting activities complete the questionnaire.
PLEASE IGNORE THIS EMAIL IF YOU HAVE RESPONDED TO THE SURVEY
267
Appendix 9: Second Email Reminder
Date: 29 July 2008
Re: International Marketing Strategy Research by Southern Cross University
An Empirical Study on the Factors influencing International Marketing Strategy
Development among successful Exporters in Australia
To: The Manager – Export or (International) Marketing Department*
Dear Sir/Madam
Further to our emails dated 18 and 22 July 2008 inviting your participation on the
above study, it will be greatly appreciated if you could take part in this research. It
takes no more than 10 minutes of your time, yet the findings of this study could
benefit your organisation and others leading to increase in exports for Australia.
Please complete the online survey for this research by clicking on this web link:
http://tinyurl.com/44w6mx and if requested, an executive summary of the findings can
be email to you when completed.
Look forward to your response.
Thanks in advance.
Ricky Tang, Researcher
Graduate College of Management
Southern Cross University
Australia
* If your organisation does not have an export or (international) marketing department, could the managing director,
general manager or someone with in-depth knowledge of the firm's exporting activities complete the questionnaire.
PLEASE IGNORE THIS EMAIL IF YOU HAVE RESPONDED TO THE SURVEY
268
Appendix 10: SPSS Generated Outputs
Frequencies
Market Factors in Domestic Markets
Valid
3.25
3.50
3.75
4.00
4.25
4.50
4.75
5.00
5.25
5.50
Total
Frequency
7
3
2
6
8
4
9
4
4
1
48
Percent
14.6
6.3
4.2
12.5
16.7
8.3
18.8
8.3
8.3
2.1
100.0
Valid Percent
14.6
6.3
4.2
12.5
16.7
8.3
18.8
8.3
8.3
2.1
100.0
Cumulativ e
Percent
14.6
20.8
25.0
37.5
54.2
62.5
81.3
89.6
97.9
100.0
Industry Factors in Domestic Markets
Valid
3.25
3.50
3.75
4.00
4.25
4.50
4.75
5.00
5.50
Total
Frequency
6
6
2
4
9
9
9
2
1
48
Percent
12.5
12.5
4.2
8.3
18.8
18.8
18.8
4.2
2.1
100.0
Valid Percent
12.5
12.5
4.2
8.3
18.8
18.8
18.8
4.2
2.1
100.0
269
Cumulativ e
Percent
12.5
25.0
29.2
37.5
56.3
75.0
93.8
97.9
100.0
Market Factors in Foreign Markets
Valid
2.75
3.25
3.50
3.75
4.00
4.25
4.50
4.75
5.00
5.25
5.50
5.75
Total
Frequency
1
5
8
6
3
7
10
4
1
1
1
1
48
Percent
2.1
10.4
16.7
12.5
6.3
14.6
20.8
8.3
2.1
2.1
2.1
2.1
100.0
Valid Percent
2.1
10.4
16.7
12.5
6.3
14.6
20.8
8.3
2.1
2.1
2.1
2.1
100.0
Cumulativ e
Percent
2.1
12.5
29.2
41.7
47.9
62.5
83.3
91.7
93.8
95.8
97.9
100.0
Industry Factors in Foreign Markets
Valid
3.00
3.25
3.50
3.75
4.00
4.25
4.50
4.75
5.00
5.25
Total
Frequency
3
5
3
6
5
10
3
6
5
2
48
Percent
6.3
10.4
6.3
12.5
10.4
20.8
6.3
12.5
10.4
4.2
100.0
Valid Percent
6.3
10.4
6.3
12.5
10.4
20.8
6.3
12.5
10.4
4.2
100.0
Cumulativ e
Percent
6.3
16.7
22.9
35.4
45.8
66.7
72.9
85.4
95.8
100.0
Firm's Internal Factors
Valid
3.20
3.40
3.80
4.00
4.20
4.40
4.60
4.80
5.00
5.20
5.40
5.60
Total
Frequency
1
1
2
6
6
10
3
7
6
3
1
2
48
Percent
2.1
2.1
4.2
12.5
12.5
20.8
6.3
14.6
12.5
6.3
2.1
4.2
100.0
Valid Percent
2.1
2.1
4.2
12.5
12.5
20.8
6.3
14.6
12.5
6.3
2.1
4.2
100.0
270
Cumulativ e
Percent
2.1
4.2
8.3
20.8
33.3
54.2
60.4
75.0
87.5
93.8
95.8
100.0
Foreign Environment Factors
Valid
3.00
3.20
3.40
3.60
3.80
4.00
4.20
4.40
4.60
4.80
5.00
5.20
5.40
Total
Frequency
2
1
4
4
2
6
7
6
3
9
1
1
2
48
Percent
4.2
2.1
8.3
8.3
4.2
12.5
14.6
12.5
6.3
18.8
2.1
2.1
4.2
100.0
Valid Percent
4.2
2.1
8.3
8.3
4.2
12.5
14.6
12.5
6.3
18.8
2.1
2.1
4.2
100.0
Cumulativ e
Percent
4.2
6.3
14.6
22.9
27.1
39.6
54.2
66.7
72.9
91.7
93.8
95.8
100.0
Support Networks Factors in Foreign Markets
Valid
2.50
3.00
3.25
3.75
4.00
4.25
4.50
4.75
5.00
5.25
5.50
5.75
6.25
Total
Frequency
1
2
2
12
6
3
4
7
3
3
2
2
1
48
Percent
2.1
4.2
4.2
25.0
12.5
6.3
8.3
14.6
6.3
6.3
4.2
4.2
2.1
100.0
Valid Percent
2.1
4.2
4.2
25.0
12.5
6.3
8.3
14.6
6.3
6.3
4.2
4.2
2.1
100.0
271
Cumulativ e
Percent
2.1
6.3
10.4
35.4
47.9
54.2
62.5
77.1
83.3
89.6
93.8
97.9
100.0
IMS Development Decisions
Valid
Frequency
3
3
6
6
6
3
9
5
2
5
48
3.00
3.25
3.50
3.75
4.00
4.25
4.50
4.75
5.00
5.25
Total
Percent
6.3
6.3
12.5
12.5
12.5
6.3
18.8
10.4
4.2
10.4
100.0
Valid Percent
6.3
6.3
12.5
12.5
12.5
6.3
18.8
10.4
4.2
10.4
100.0
Cumulativ e
Percent
6.3
12.5
25.0
37.5
50.0
56.3
75.0
85.4
89.6
100.0
Factor Analysis
Market Factors in Domestic Markets
KMO and Bartl ett's Test
Kaiser-Mey er-Olkin Measure of Sampling
Adequacy .
Bart lett 's Test of
Sphericity
.685
Approx. Chi-Square
df
Sig.
40.611
6
.000
Total Variance Explained
Component
1
2
3
4
Total
2.227
.742
.661
.370
Initial Eigenv alues
% of Variance Cumulat iv e %
55.674
55.674
18.548
74.222
16.525
90.747
9.253
100.000
Extract ion Method: Principal Component Analy sis.
Component Matri xa
Mkt
Mkt
Mkt
Mkt
Domestic
Domestic
Domestic
Domestic
1
2
3
4
Component
1
.829
.769
.681
.696
Extraction Method: Principal Component Analy sis.
a. 1 components extract ed.
272
Extract ion Sums of Squared Loadings
Total
% of Variance Cumulat iv e %
2.227
55.674
55.674
Industry Factors in Domestic Markets
KMO and Bartl ett's Test
Kaiser-Mey er-Olkin Measure of Sampling
Adequacy .
Bart lett 's Test of
Sphericity
.721
Approx. Chi-Square
df
Sig.
35.218
6
.000
Total Variance Explained
Component
1
2
3
4
Total
2.171
.771
.615
.442
Initial Eigenv alues
% of Variance Cumulat iv e %
54.271
54.271
19.287
73.558
15.381
88.939
11.061
100.000
Extract ion Sums of Squared Loadings
Total
% of Variance Cumulat iv e %
2.171
54.271
54.271
Extract ion Method: Principal Component Analy sis.
Component Matri xa
Ind Domestic
Ind Domestic
Ind Domestic
Ind Domestic
Component
1
.618
.792
.719
.803
1
2
3
4
Extraction Method: Principal Component Analy sis.
a. 1 components extract ed.
Market Factors in Foreign Markets
KMO and Bartl ett's Test
Kaiser-Mey er-Olkin Measure of Sampling
Adequacy .
Bart lett 's Test of
Sphericity
.778
Approx. Chi-Square
df
Sig.
55.711
6
.000
Total Variance Explained
Component
1
2
3
4
Total
2.501
.641
.494
.364
Initial Eigenv alues
% of Variance Cumulat iv e %
62.513
62.513
16.019
78.532
12.356
90.888
9.112
100.000
Extract ion Method: Principal Component Analy sis.
273
Extract ion Sums of Squared Loadings
Total
% of Variance Cumulat iv e %
2.501
62.513
62.513
Component Matri xa
Mkt
Mkt
Mkt
Mkt
Component
1
.715
.764
.847
.829
Foreign 1
Foreign 2
Foreign 3
Foreign 4
Extraction Method: Principal Component Analy sis.
a. 1 components extract ed.
Industry Factors in Foreign Markets
KMO and Bartl ett's Test
Kaiser-Mey er-Olkin Measure of Sampling
Adequacy .
Bart lett 's Test of
Sphericity
.756
Approx. Chi-Square
df
Sig.
39.778
6
.000
Total Variance Explained
Component
1
2
3
4
Total
2.282
.701
.540
.476
Initial Eigenv alues
% of Variance Cumulat iv e %
57.055
57.055
17.532
74.587
13.512
88.098
11.902
100.000
Extract ion Method: Principal Component Analy sis.
Component Matri xa
Ind Foreign
Ind Foreign
Ind Foreign
Ind Foreign
1
2
3
4
Component
1
.762
.760
.685
.809
Extraction Method: Principal Component Analy sis.
a. 1 components extract ed.
274
Extract ion Sums of Squared Loadings
Total
% of Variance Cumulat iv e %
2.282
57.055
57.055
Firm’s Internal Factors
KMO and Bartl ett's Test
Kaiser-Mey er-Olkin Measure of Sampling
Adequacy .
Bart lett 's Test of
Sphericity
.683
Approx. Chi-Square
df
Sig.
35.793
10
.000
Total Variance Explained
Component
1
2
3
4
5
Total
2.157
1.100
.647
.642
.454
Initial Eigenv alues
% of Variance Cumulat iv e %
43.136
43.136
22.008
65.144
12.939
78.084
12.838
90.922
9.078
100.000
Extraction Sums of Squared Loadings
Total
% of Variance Cumulat iv e %
2.157
43.136
43.136
1.100
22.008
65.144
Extraction Method: Principal Component Analy sis.
Component Matri xa
Component
1
Firm's
Firm's
Firm's
Firm's
Firm's
I nt ernal
I nt ernal
I nt ernal
I nt ernal
I nt ernal
1
2
3
4
5
2
.919
.784
.758
.645
.714
-.425
Extraction Method: Principal Component Analy sis.
a. 2 components extract ed.
Rotated Component Matrixa
Component
1
Firm's
Firm's
Firm's
Firm's
Firm's
Int ernal
Int ernal
Int ernal
Int ernal
Int ernal
1
2
3
4
5
.721
.762
.714
.712
2
.942
.396
Extraction Method: Principal Component Analy sis.
Rotation Met hod: Varimax with Kaiser Normalization.
a. Rotation conv erged in 3 iterations.
Component Transformation Matrix
Component
1
2
1
.982
-.191
2
.191
.982
Extraction Method: Principal Component Analy sis.
Rotation Met hod: Varimax wit h Kaiser Normalization.
275
Rotation Sums of Squared Loadings
Total
% of Variance Cumulat iv e %
2.118
42.363
42.363
1.139
22.782
65.144
Firm’s Internal Factors (revised)
KMO and Bartl ett's Test
Kaiser-Mey er-Olkin Measure of Sampling
Adequacy .
Bart lett 's Test of
Sphericity
.741
Approx. Chi-Square
df
Sig.
30.961
6
.000
Total Variance Explained
Component
1
2
3
4
Total
2.134
.705
.642
.519
Initial Eigenv alues
% of Variance Cumulat iv e %
53.352
53.352
17.619
70.971
16.049
87.020
12.980
100.000
Extract ion Method: Principal Component Analy sis.
Component Matri xa
Firm's
Firm's
Firm's
Firm's
I nt ernal
I nt ernal
I nt ernal
I nt ernal
2
3
4
5
Component
1
.764
.767
.670
.716
Extraction Method: Principal Component Analy sis.
a. 1 components extract ed.
Foreign Environment Factors
KMO and Bartl ett's Test
Kaiser-Mey er-Olkin Measure of Sampling
Adequacy .
Bart lett 's Test of
Sphericity
Approx. Chi-Square
df
Sig.
.712
54.625
10
.000
276
Extract ion Sums of Squared Loadings
Total
% of Variance Cumulat iv e %
2.134
53.352
53.352
Total Variance Explained
Component
1
2
3
4
5
Total
2.520
.908
.661
.573
.338
Initial Eigenv alues
% of Variance Cumulat iv e %
50.399
50.399
18.157
68.556
13.213
81.769
11.469
93.239
6.761
100.000
Extract ion Sums of Squared Loadings
Total
% of Variance Cumulat iv e %
2.520
50.399
50.399
Extract ion Method: Principal Component Analy sis.
Component Matri xa
Env ironment
Env ironment
Env ironment
Env ironment
Env ironment
Component
1
.617
.714
.709
.680
.814
1
2
3
4
5
Extraction Method: Principal Component Analy sis.
a. 1 components extract ed.
Support Networks Factors in Foreign Markets
KMO and Bartl ett's Test
Kaiser-Mey er-Olkin Measure of Sampling
Adequacy .
Bart lett 's Test of
Sphericity
.787
Approx. Chi-Square
df
Sig.
60.850
6
.000
Total Variance Explained
Component
1
2
3
4
Total
2.571
.622
.448
.359
Initial Eigenv alues
% of Variance Cumulat iv e %
64.267
64.267
15.548
79.816
11.207
91.022
8.978
100.000
Extract ion Method: Principal Component Analy sis.
277
Extract ion Sums of Squared Loadings
Total
% of Variance Cumulat iv e %
2.571
64.267
64.267
Component Matri xa
Support
Support
Support
Support
1
2
3
4
Component
1
.754
.853
.840
.754
Extraction Method: Principal Component Analy sis.
a. 1 components extract ed.
IMS Development Decisions Effectiveness
KMO and Bartl ett's Test
Kaiser-Mey er-Olkin Measure of Sampling
Adequacy .
Bart lett 's Test of
Sphericity
.625
Approx. Chi-Square
df
Sig.
100.245
6
.000
Total Variance Explained
Component
1
2
3
4
Total
2.467
.902
.542
.089
Initial Eigenv alues
% of Variance Cumulat iv e %
61.687
61.687
22.549
84.236
13.548
97.784
2.216
100.000
Extract ion Method: Principal Component Analy sis.
Component Matri xa
IMS decisions
IMS decisions
IMS decisions
IMS decisions
1
2
3
4
Component
1
.896
.720
.898
.583
Extraction Method: Principal Component Analy sis.
a. 1 components extract ed.
278
Extract ion Sums of Squared Loadings
Total
% of Variance Cumulat iv e %
2.467
61.687
61.687
Correlation Analysis
Market Factors in Domestic Markets
Correlati ons
Market Factors in
Domest ic Market s
Mkt Domest ic 1
Mkt Domest ic 2
Mkt Domest ic 3
Mkt Domest ic 4
Pears on C orrelation
Sig. (2-t ailed)
N
Pears on C orrelation
Sig. (2-t ailed)
N
Pears on C orrelation
Sig. (2-t ailed)
N
Pears on C orrelation
Sig. (2-t ailed)
N
Pears on C orrelation
Sig. (2-t ailed)
N
Market
Factors in
Domest ic
Mkt
Mkt
Mkt
Mkt
Markets
Domest ic 1 Domest ic 2 Domest ic 3 Domest ic 4
1
.800**
.734**
.735**
.704**
.
.000
.000
.000
.000
48
48
48
48
48
.800**
1
.585**
.452**
.374**
.000
.
.000
.001
.009
48
48
48
48
48
.734**
.585**
1
.275
.389**
.000
.000
.
.059
.006
48
48
48
48
48
.735**
.452**
.275
1
.359*
.000
.001
.059
.
.012
48
48
48
48
48
.704**
.374**
.389**
.359*
1
.000
.009
.006
.012
.
48
48
48
48
48
**. Correlat ion is signif icant at the 0. 01 lev el (2-tailed).
*. Correlat ion is signif icant at the 0. 05 lev el (2-tailed).
Industry Factors in Domestic Markets
Correlati ons
Indust ry Factors in Pears on C orrelation
Domest ic Market s Sig. (2-t ailed)
N
Ind Domest ic 1
Pears on C orrelation
Sig. (2-t ailed)
N
Ind Domest ic 2
Pears on C orrelation
Sig. (2-t ailed)
N
Ind Domest ic 3
Pears on C orrelation
Sig. (2-t ailed)
N
Ind Domest ic 4
Pears on C orrelation
Sig. (2-t ailed)
N
Indust ry
Factors in
Domest ic
Ind
Ind
Ind
Ind
Markets
Domest ic 1 Domest ic 2 Domest ic 3 Domest ic 4
1
.659**
.781**
.721**
.776**
.
.000
.000
.000
.000
48
48
48
48
48
.659**
1
.368**
.270
.296*
.000
.
.010
.064
.041
48
48
48
48
48
.781**
.368**
1
.378**
.532**
.000
.010
.
.008
.000
48
48
48
48
48
.721**
.270
.378**
1
.467**
.000
.064
.008
.
.001
48
48
48
48
48
.776**
.296*
.532**
.467**
1
.000
.041
.000
.001
.
48
48
48
48
48
**. Correlat ion is signif icant at the 0. 01 lev el (2-tailed).
*. Correlat ion is signif icant at the 0. 05 lev el (2-tailed).
279
Market Factors in Foreign Markets
Correlati ons
Market Factors in
Foreign Market s
Mkt Foreign 1
Mkt Foreign 2
Mkt Foreign 3
Mkt Foreign 4
Pears on C orrelation
Sig. (2-t ailed)
N
Pears on C orrelation
Sig. (2-t ailed)
N
Pears on C orrelation
Sig. (2-t ailed)
N
Pears on C orrelation
Sig. (2-t ailed)
N
Pears on C orrelation
Sig. (2-t ailed)
N
Market
Factors in
Foreign
Markets
Mkt Foreign 1 Mkt Foreign 2 Mkt Foreign 3 Mkt Foreign 4
1
.738**
.766**
.837**
.816**
.
.000
.000
.000
.000
48
48
48
48
48
.738**
1
.374**
.457**
.482**
.000
.
.009
.001
.001
48
48
48
48
48
.766**
.374**
1
.559**
.488**
.000
.009
.
.000
.000
48
48
48
48
48
.837**
.457**
.559**
1
.622**
.000
.001
.000
.
.000
48
48
48
48
48
.816**
.482**
.488**
.622**
1
.000
.001
.000
.000
.
48
48
48
48
48
**. Correlat ion is signif icant at the 0. 01 lev el (2-tailed).
Industry Factors in Foreign Markets
Correlati ons
Indust ry Factors in Pears on C orrelation
Foreign Market s
Sig. (2-t ailed)
N
Ind Foreign 1
Pears on C orrelation
Sig. (2-t ailed)
N
Ind Foreign 2
Pears on C orrelation
Sig. (2-t ailed)
N
Ind Foreign 3
Pears on C orrelation
Sig. (2-t ailed)
N
Ind Foreign 4
Pears on C orrelation
Sig. (2-t ailed)
N
Indust ry
Factors in
Foreign
Markets
Ind Foreign 1 Ind Foreign 2 Ind Foreign 3 Ind Foreign 4
1
.760**
.766**
.696**
.795**
.
.000
.000
.000
.000
48
48
48
48
48
.760**
1
.465**
.355*
.470**
.000
.
.001
.013
.001
48
48
48
48
48
.766**
.465**
1
.325*
.492**
.000
.001
.
.024
.000
48
48
48
48
48
.696**
.355*
.325*
1
.447**
.000
.013
.024
.
.001
48
48
48
48
48
.795**
.470**
.492**
.447**
1
.000
.001
.000
.001
.
48
48
48
48
48
**. Correlat ion is signif icant at the 0. 01 lev el (2-tailed).
*. Correlat ion is signif icant at the 0. 05 lev el (2-tailed).
280
New Firm’s Internal Factors
Correlati ons
New Firm's
Internal Factors
Firm's Int ernal 2
Firm's Int ernal 3
Firm's Int ernal 4
Firm's Int ernal 5
Pears on Correlation
Sig. (2-t ailed)
N
Pears on Correlation
Sig. (2-t ailed)
N
Pears on Correlation
Sig. (2-t ailed)
N
Pears on Correlation
Sig. (2-t ailed)
N
Pears on Correlation
Sig. (2-t ailed)
N
New Firm's
Internal
Firm's
Firm's
Firm's
Firm's
Factors
Internal 2 Internal 3 Internal 4 Internal 5
1
.753**
.757**
.687**
.721**
.
.000
.000
.000
.000
48
48
48
48
48
.753**
1
.479**
.344*
.375**
.000
.
.001
.017
.009
48
48
48
48
48
.757**
.479**
1
.333*
.390**
.000
.001
.
.021
.006
48
48
48
48
48
.687**
.344*
.333*
1
.338*
.000
.017
.021
.
.019
48
48
48
48
48
.721**
.375**
.390**
.338*
1
.000
.009
.006
.019
.
48
48
48
48
48
**. Correlat ion is signif icant at the 0. 01 lev el (2-t ailed).
*. Correlat ion is signif icant at the 0. 05 lev el (2-t ailed).
Foreign Environment Factors
Correlati ons
Foreign Env ironment
Factors
Env ironment 1
Env ironment 2
Env ironment 3
Env ironment 4
Env ironment 5
Pears on C orrelation
Sig. (2-t ailed)
N
Pears on C orrelation
Sig. (2-t ailed)
N
Pears on C orrelation
Sig. (2-t ailed)
N
Pears on C orrelation
Sig. (2-t ailed)
N
Pears on C orrelation
Sig. (2-t ailed)
N
Pears on C orrelation
Sig. (2-t ailed)
N
Foreign
Env ironment
Factors
Env ironment 1 Env ironment 2 Env ironment 3 Env ironment 4 Env ironment 5
1
.654**
.713**
.687**
.684**
.800**
.
.000
.000
.000
.000
.000
48
48
48
48
48
48
.654**
1
.433**
.158
.286*
.396**
.000
.
.002
.285
.049
.005
48
48
48
48
48
48
.713**
.433**
1
.349*
.366*
.396**
.000
.002
.
.015
.011
.005
48
48
48
48
48
48
.687**
.158
.349*
1
.358*
.600**
.000
.285
.015
.
.013
.000
48
48
48
48
48
48
.684**
.286*
.366*
.358*
1
.419**
.000
.049
.011
.013
.
.003
48
48
48
48
48
48
.800**
.396**
.396**
.600**
.419**
1
.000
.005
.005
.000
.003
.
48
48
48
48
48
48
**. Correlat ion is signif icant at the 0. 01 lev el (2-t ailed).
*. Correlat ion is signif icant at the 0. 05 lev el (2-t ailed).
281
Support Networks Factors in Foreign Markets
Correlati ons
Support Network s Fact ors Pears on Correlation
in Foreign Markets
Sig. (2-t ailed)
N
Support 1
Pears on Correlation
Sig. (2-t ailed)
N
Support 2
Pears on Correlation
Sig. (2-t ailed)
N
Support 3
Pears on Correlation
Sig. (2-t ailed)
N
Support 4
Pears on Correlation
Sig. (2-t ailed)
N
Support
Net works
Factors in
Foreign
Markets
Support 1 Support 2 Support 3 Support 4
1
.776**
.842**
.834**
.749**
.
.000
.000
.000
.000
48
48
48
48
48
.776**
1
.514**
.542**
.386**
.000
.
.000
.000
.007
48
48
48
48
48
.842**
.514**
1
.631**
.559**
.000
.000
.
.000
.000
48
48
48
48
48
.834**
.542**
.631**
1
.495**
.000
.000
.000
.
.000
48
48
48
48
48
.749**
.386**
.559**
.495**
1
.000
.007
.000
.000
.
48
48
48
48
48
**. Correlat ion is signif icant at the 0. 01 lev el (2-t ailed).
IMS Development Decisions Effectiveness
Correlati ons
IMS D ev elopment
Dec is ions
IMS decisions 1
IMS decisions 2
IMS decisions 3
IMS decisions 4
Pears on C orrelation
Sig. (2-t ailed)
N
Pears on C orrelation
Sig. (2-t ailed)
N
Pears on C orrelation
Sig. (2-t ailed)
N
Pears on C orrelation
Sig. (2-t ailed)
N
Pears on C orrelation
Sig. (2-t ailed)
N
IMS
Dev elopment
IMS
IMS
IMS
IMS
Dec is ions
dec isions 1
dec isions 2
dec isions 3
dec isions 4
1
.861**
.754**
.866**
.631**
.
.000
.000
.000
.000
48
48
48
48
48
.861**
1
.459**
.910**
.287*
.000
.
.001
.000
.048
48
48
48
48
48
.754**
.459**
1
.438**
.431**
.000
.001
.
.002
.002
48
48
48
48
48
.866**
.910**
.438**
1
.321*
.000
.000
.002
.
.026
48
48
48
48
48
.631**
.287*
.431**
.321*
1
.000
.048
.002
.026
.
48
48
48
48
48
**. Correlat ion is signif icant at the 0. 01 lev el (2-t ailed).
*. Correlat ion is signif icant at the 0. 05 lev el (2-t ailed).
282
Explore
Market Factors in Domestic Markets
5.50
5.00
4.50
4.00
3.50
3.00
Market Factors in Domestic Markets
Industry Factors in Domestic Markets
5.50
5.00
4.50
4.00
3.50
3.00
Industry Factors in Domestic Markets
283
Market Factors in Foreign Markets
6.00
5.50
5.00
4.50
4.00
3.50
3.00
2.50
Market Factors in Foreign Markets
Industry Factors in Foreign Markets
5.50
5.00
4.50
4.00
3.50
3.00
Industry Factors in Foreign Markets
284
Firm’s Internal Factors
6.00
5.50
5.00
4.50
4.00
3.50
3.00
Firm's Internal Factors
Foreign Environment Factors
5.50
5.00
4.50
4.00
3.50
3.00
Foreign Environment Factors
285
Support Networks Factors in Foreign Markets
6.00
5.00
4.00
3.00
Support Networks Factors in Foreign Markets
IMS Development Decisions Effectiveness
5.50
5.00
4.50
4.00
3.50
3.00
IMS Development Decisions
286
Descriptives
Descriptive Statistics
N
St at ist ic
Market Fact ors in
Domestic Markets
Industry Factors in
Domestic Markets
Market Fact ors in Foreign
Markets
Industry Factors in
Foreign Markets
Firm's Int ernal Factors
Foreign Env ironment
Factors
Support Net works Factors
in Foreign Markets
IMS Dev elopment
Decisions
Valid N (listwise)
Skewness
St at ist ic
St d. Error
Kurt osis
St at ist ic
St d. Error
48
-.184
.343
-.945
.674
48
-.221
.343
-.763
.674
48
.319
.343
-.103
.674
48
-.098
.343
-.916
.674
48
-.090
.343
.020
.674
48
-.149
.343
-.537
.674
48
.200
.343
-.147
.674
48
.013
.343
-.957
.674
48
Descriptives
Descriptive Statistics
N
Market Factors in
Domestic Market s
Industry Factors in
Domestic Market s
Market Factors in Foreign
Markets
Industry Factors in
Foreign Markets
Foreign Env ironment
Factors
Support Networks Factors
in Foreign Markets
IMS Dev elopment
Decisions
New Firm's I nt ernal
Factors
Valid N (list wise)
Range
Minimum
Maximum
Mean
Std. Dev iat ion
Variance
48
2.25
3.25
5.50
4.2917
.64892
.421
48
2.25
3.25
5.50
4.1875
.57311
.328
48
3.00
2.75
5.75
4.0990
.64151
.412
48
2.25
3.00
5.25
4.1302
.63579
.404
48
2.40
3.00
5.40
4.2208
.59963
.360
48
3.75
2.50
6.25
4.3229
.79386
.630
48
2.25
3.00
5.25
4.1563
.65968
.435
48
2.25
3.25
5.50
4.3958
.58079
.337
48
287
Frequencies
Industries Type
Valid
High Tech
Primary Producers
Manuf acturing
Serv ices
Resources
Others
Total
Frequency
18
4
11
11
3
1
48
Percent
37.5
8.3
22.9
22.9
6.3
2.1
100.0
Cumulat iv e
Percent
37.5
45.8
68.8
91.7
97.9
100.0
Valid Percent
37.5
8.3
22.9
22.9
6.3
2.1
100.0
Ownershi p Type
Valid
Frequency
Australian Proprietary Co.
30
Australian Gov t Enterprise
4
Australian Sole Trader /
3
Part nership
Subsidiary of Foreign
3
MNC
Australian Public Co.
8
Total
48
Percent
62.5
8.3
Valid Percent
62.5
8.3
Cumulat iv e
Percent
62.5
70.8
6.3
6.3
77.1
6.3
6.3
83.3
16.7
100.0
16.7
100.0
100.0
Years of International Business
Valid
Frequency
> 3 y ears & < 5 y ears
8
> 5 y ears
40
Total
48
Percent
16.7
83.3
100.0
Valid Percent
16.7
83.3
100.0
Cumulat iv e
Percent
16.7
100.0
No. of Overseas Mkts served
Valid
< 3 countries
4 to 10 countries
> 10 countries
Total
Frequency
3
11
34
48
Percent
6.3
22.9
70.8
100.0
288
Valid Percent
6.3
22.9
70.8
100.0
Cumulat iv e
Percent
6.3
29.2
100.0
International Turnover
Valid
Frequency
< A$5.0 M
10
A$5.0 M t o A$50.0 M
32
> A$50.0 M
6
Total
48
Percent
20.8
66.7
12.5
100.0
Valid Percent
20.8
66.7
12.5
100.0
Exporting
Valid
Yes
Frequency
48
Percent
100.0
Valid Percent
100.0
Cumulativ e
Percent
100.0
Contractual Agreement
Valid
No
Yes
Total
Frequency
37
11
48
Percent
77.1
22.9
100.0
Valid Percent
77.1
22.9
100.0
Cumulativ e
Percent
77.1
100.0
Joint Venture
Valid
No
Y es
Total
Frequency
44
4
48
Percent
91.7
8.3
100.0
Valid Percent
91.7
8.3
100.0
Cumulativ e
Percent
91.7
100.0
Direct Investment
Valid
No
Y es
Total
Frequency
40
8
48
Percent
83.3
16.7
100.0
Valid Percent
83.3
16.7
100.0
Cumulativ e
Percent
83.3
100.0
Others
Valid
No
Yes
Total
Frequency
45
3
48
Percent
93.8
6.3
100.0
Valid Percent
93.8
6.3
100.0
289
Cumulativ e
Percent
93.8
100.0
Cumulat iv e
Percent
20.8
87.5
100.0
Factor Analysis for testing Common Method Variance
Total Variance Expl ained
Component
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
Tot al
14. 168
3. 813
2. 843
2. 736
2. 171
1. 288
1. 231
1. 071
.781
.627
.565
.455
.394
.322
.311
.236
.178
.146
.127
.112
9. 346E-02
6. 978E-02
5. 961E-02
4. 853E-02
4. 397E-02
3. 607E-02
2. 794E-02
1. 555E-02
1. 193E-02
8. 820E-03
5. 996E-03
3. 361E-03
5. 921E-17
-1.99E-17
Init ial Eigenv alues
% of Variance Cumulat iv e %
41. 670
41. 670
11. 215
52. 885
8. 361
61. 246
8. 046
69. 293
6. 384
75. 677
3. 788
79. 465
3. 621
83. 086
3. 150
86. 236
2. 297
88. 533
1. 843
90. 376
1. 662
92. 039
1. 339
93. 378
1. 158
94. 536
.947
95. 482
.916
96. 398
.695
97. 094
.524
97. 618
.429
98. 047
.374
98. 420
.330
98. 750
.275
99. 025
.205
99. 230
.175
99. 405
.143
99. 548
.129
99. 677
.106
99. 784
8. 217E-02
99. 866
4. 572E-02
99. 911
3. 509E-02
99. 947
2. 594E-02
99. 972
1. 764E-02
99. 990
9. 887E-03
100.000
1. 742E-16
100.000
-5.857E-17
100.000
Extraction Sums of Squared Loadings
Tot al
% of Variance Cumulat iv e %
14. 168
41. 670
41. 670
3. 813
11. 215
52. 885
2. 843
8. 361
61. 246
2. 736
8. 046
69. 293
2. 171
6. 384
75. 677
1. 288
3. 788
79. 465
1. 231
3. 621
83. 086
1. 071
3. 150
86. 236
Extraction Met hod: Principal Component Analy s is .
Reliability
Market Factors in Domestic Markets
Reliabi lity Statisti cs
Cronbach's
Alpha
.725
N of Items
4
Industry Factors in Domestic Markets
Reliabi lity Statisti cs
Cronbach's
Alpha
.715
N of Items
4
290
Rot ation Sums of Squared Loadings
Tot al
% of Variance Cumulat iv e %
6. 346
18. 666
18. 666
5. 028
14. 788
33. 454
4. 701
13. 828
47. 281
3. 502
10. 299
57. 581
3. 343
9. 834
67. 414
2. 687
7. 903
75. 318
2. 423
7. 126
82. 443
1. 290
3. 793
86. 236
Market Factors in Foreign Markets
Reliabi lity Statisti cs
Cronbach's
Alpha
.797
N of Items
4
Industry Factors in Foreign Markets
Reliabi lity Statisti cs
Cronbach's
Alpha
.747
N of Items
4
Firm’s Internal Factors
Reliabi lity Statisti cs
Cronbach's
Alpha
.708
N of Items
4
Foreign Environment Factors
Reliabi lity Statisti cs
Cronbach's
Alpha
.751
N of Items
5
Support Networks factors in Foreign Markets
Reliabi lity Statisti cs
Cronbach's
Alpha
.812
N of Items
4
291
IMS Development Decisions Effectiveness
Reliabi lity Statisti cs
Cronbach's
Alpha
.787
N of Items
4
292
Nonparametric Correlations of Key Variables
Correlati ons
Spearman's rho
IMS Dev elopment
Decisions
Market Factors in
Domestic Market s
Industry Factors in
Domestic Market s
Market Factors in Foreign
Markets
Industry Factors in
Foreign Markets
New Firm's I nternal
Factors
Foreign Env ironment
Factors
Support Networks Factors
in Foreign Markets
Correlation Coef f icient
Sig. (2-tailed)
N
Correlation Coef f icient
Sig. (2-tailed)
N
Correlation Coef f icient
Sig. (2-tailed)
N
Correlation Coef f icient
Sig. (2-tailed)
N
Correlation Coef f icient
Sig. (2-tailed)
N
Correlation Coef f icient
Sig. (2-tailed)
N
Correlation Coef f icient
Sig. (2-tailed)
N
Correlation Coef f icient
Sig. (2-tailed)
N
**. Correlation is signif icant at the .01 lev el (2-t ailed).
293
Support
Market
Industry
Market
Industry
Networks
IMS
Factors in
Factors in
Factors in
Factors in
New Firm's
Foreign
Factors in
Dev elopment
Domestic
Domestic
Foreign
Foreign
Internal
Env ironment
Foreign
Decisions
Markets
Markets
Markets
Markets
Factors
Factors
Markets
1.000
.826**
.780**
.855**
.825**
.767**
.867**
-.073
.
.000
.000
.000
.000
.000
.000
.623
48
48
48
48
48
48
48
48
.826**
1.000
.887**
.855**
.797**
.901**
.921**
.070
.000
.
.000
.000
.000
.000
.000
.638
48
48
48
48
48
48
48
48
.780**
.887**
1.000
.826**
.756**
.841**
.877**
.096
.000
.000
.
.000
.000
.000
.000
.515
48
48
48
48
48
48
48
.855**
.000
48
.825**
.000
48
.767**
.000
48
.867**
.000
48
-.073
.623
48
.855**
.000
48
.797**
.000
48
.901**
.000
48
.921**
.000
48
.070
.638
48
.826**
.000
48
.756**
.000
48
.841**
.000
48
.877**
.000
48
.096
.515
48
1.000
.
48
.802**
.000
48
.819**
.000
48
.886**
.000
48
-.066
.658
48
.802**
.000
48
1.000
.
48
.710**
.000
48
.908**
.000
48
.013
.928
48
.819**
.000
48
.710**
.000
48
1.000
.
48
.854**
.000
48
.012
.936
48
.886**
.000
48
.908**
.000
48
.854**
.000
48
1.000
.
48
.030
.841
48
48
-.066
.658
48
.013
.928
48
.012
.936
48
.030
.841
48
1.000
.
48
Regression
Model Summary
Model
1
R
.902a
R Square
.813
Adjusted
R Square
.781
Std. Error of
the Est imat e
.30906
a. Predictors: (Constant), New Firm's Int ernal Factors,
Support Networks Factors in Foreign Markets, Indust ry
Factors in Foreign Markets, Industry Factors in
Domestic Market s, Market Factors in Foreign Markets,
Market Factors in Domestic Markets, Foreign
Env ironment Factors
ANOVAb
Model
1
Regression
Residual
Total
Sum of
Squares
16.632
3.821
20.453
df
7
40
47
Mean Square
2.376
.096
F
24.876
Sig.
.000a
a. Predictors: (Constant), New Firm's Internal Factors, Support Networks Factors in
Foreign Markets, Industry Factors in Foreign Markets, Indust ry Fact ors in Domestic
Markets, Market Factors in Foreign Markets, Market Factors in Domestic Markets,
Foreign Env ironment Factors
b. Dependent Variable: IMS Dev elopment Decisions
Coeffici entsa
Model
1
(Constant)
Market Factors in
Domestic Market s
Industry Factors in
Domestic Market s
Market Factors in Foreign
Markets
Industry Factors in
Foreign Markets
Foreign Env ironment
Factors
Support Networks Factors
in Foreign Markets
New Firm's I nt ernal
Factors
Unstandardized
Coef f icients
B
Std. Error
.178
.429
Standardized
Coef f icients
Beta
Zero-order
Correlations
Part ial
.415
Sig.
.680
t
Part
.091
.224
.090
.408
.685
.839
.064
.028
.094
.186
.082
.507
.615
.793
.080
.035
.201
.159
.196
1.265
.213
.836
.196
.086
.240
.177
.232
1.357
.182
.838
.210
.093
.310
.291
.282
1.065
.293
.879
.166
.073
-.077
.060
-.093
-1.289
.205
-.045
-.200
-.088
.091
.171
.080
.532
.598
.786
.084
.036
a. Dependent Variable: IMS Dev elopment Decisions
294