Abstract

The choice of entry mode into a foreign market has a major impact on the success of an MNC's international operations. While the existing literature on the entry mode decision has either presented a list of determinant variables with identifying underlying constructs, or treated each entry mode in isolation. There is a clear need for a unified framework within which determinant variable should be included and the relationship between them then analyzed simultaneously without losing the joint impact effect. Although several authors have attempted to develop such a conceptual framework, for instance, Hill et al. (1990), their frameworks often suffer the impossibility of an empirical testing. Therefore, the contribution on the choice of entry mode is considered a minor. Moreover, an MNC may consider different entry decision among different countries or areas to gain the optimal competitive advantages. Such strategic formation of entry mode portfolio has been found in the most MNC's foreign operations. Unfortunately, the entry mode portfolio has not been studied in the literature doe greatly to the unavailability of data collection. This article attempts to overcome such barriers. The decision framework of entry mode based on Dunning's eclectic theory is first developed. Then, the entry mode portfolio is consequently formatted by combining the determinants of entry decision with strategic variables. The Taiwan-based MNC's are chosen as the example to test the model.