Application of PROMETHEE-GAIA Method in the Entry Mode Selection Process in International Market Expansion

Abstract

Selecting an entry mode for a new organization or expansion is of vital importance to a decision maker, as many potential qualitative and quantitative criteria are to be considered. Entry mode decision is the most critical decision in international expansion; it can affect the performance of the company in the future. This paper solves an entry mode selection problem using PROMETHEE (Preference Ranking Organization Method for Enrichment Evaluation) and GAIA (Geometrical Analysis for Interactive Aid) method which is an effective multi-criteria decision-making (MCDM) tool and is used to deal with complex problems. In order to follow this technique, an investigation has been operated for comparing 5 entry modes such us exporting, franchising, licensing, joint venture and foreign direct investment (FDI) according to 15 criteria. The results, obtained by multi-criteria evaluation, clearly show that this method of entry mode selection for an Ivorian company named FILTISAC is successful and applicable. It is empirically determined that joint venture is the most suitable entry mode for company expansion amongst those selected.