DEVELOPMENT OF ENTRY LOCATION ASSESSMENT CRITERIA (ELAC) MODEL FOR MALAYSIAN CONSTRUCTION FIRMS IN INTERNATIONAL MARKETS
Keywords:
assessment criteria, construction firms, entry location, international marketsAbstract
Malaysian construction firms have increasingly gained investment opportunities in foreign countries pushed by the competitive and saturated domestic market. However, the entry location decision involves complex factors to be considered by these firms prior to their international operations. Currently, based on a secondary data obtained from the Construction Industry Development Board (CIDB) Malaysia, there are twelve (12) firms that are actively operating in international markets. The main objective of this preliminary study is to develop an entry location assessment criteria (ELAC) model based on the performance of Malaysian construction firms in international markets. The ELAC formula was derived through a development of taxonomy criteria from previous studies. The construction firms’ performance was analyzed and ranked using a weightage score characterized under three (3) dimensions of country with the taxonomy criteria. First dimension involves entry location decision to countries in ASEAN, Non-ASEAN and both regions, while the second dimension involves entry location decision to ASEAN, Asia, Africa, United States of America and Europe while the third dimension involves entry location decision to countries categorized as Developing Countries (DLC); Least Developed Country (LDC); Newly Industrialized Countries (NIC); Developed Countries (DC); and Highly Developed Countries (HDC). The ELAC score shows that three (3) construction firms which are, Sapura Energy Berhad (66%), Gamuda Berhad (53%) and Sime Darby Berhad (50%) have sustained international operations in various locations by obtaining an ELAC score of more than 50% by venturing to ASEAN countries, developing countries and developed countries. Even though his study is limited to Malaysian construction firms, it provides significant information and contributes to the current knowledge in international market expansion. This ELAC model is useful especially for construction firms that are just beginning to explore foreign business opportunities or for the global players that are expanding geographically to new international markets.
References
Abdul-Aziz, A.-R. (1993). The Trend Towards Contractors Globalization in Developing Countries. in Business: Lessons for Habitat International, 17(3), 115–124. https://doi.org/10.1016/0197-3975(93)90020-D
Abdul R. A., Awil, A.-U., & Yi, H. S. (2006). Export Capabilities of Malaysian Housing Developers in the Context of Globalisation and Liberalisation. In Second NAPREC Conference, INSPENS.
Agarwal, S., & Ramaswami, S. N. (1992). Choice of Foreign Market Entry Mode: Impact of Ownership, Location and Internalization Factors. Journal of International Business Studies,
(1), 1–27.
Asgari, M., & Ahmad, S.Z. (2010). Internationalization of Malaysian Service Firms:Business Strategy and Choice of Foreign Market Entry Mode. In International Conference on Business, Economics and Tourism Management (CBETM 2010) (Vol. 1, pp. 1-6).
Aishah, N., Hamdan, M., & Adnan, H. (2008). An Assessment of Analysis on the Penetration of Malaysian Contractors into India. Asian Social Science, 4(5), 45–53.
Brambila, G., Gonzalez, R., Veloso. and Angon., P. (2016). The Scientific Impact of Developing Nations. PLOS ONE. 11(3). doi:10.1371/journal.pone.0151328
Bris, A.(2018). Malaysia in the IMD World Competitiveness Yearbook 2018. The Institute for Management Development (IMD). Lausanne, Switzerland.
Cheprasov, A. (2019).Developed Countries: Definition & Examples. Retrieved from https://study.com/academy/lesson/developed-countries-definition-examples.html
Chen, C. (2005) Entry strategies for international construction markets. Pennsylvania State University. Published PhD thesis. https://doi.org/10.1080/01446190701882382
Construction Industry Development Board Malaysia Report (2020). Projects Awarded to Malaysian Contractors in Global Market by Year, available at http://convince.cidb.gov.my/Statistics/Construction-Projects/Oversea-Projects
Encyclopedia Britannica (2019). Countries of Asia. Retrieved from https://www.britannica.com/topic-browse/Countries-of-the-World/Countries-of-Asia.
Ellis, P. D. (2007). Paths to foreign markets: Does distance to market affect firm internationalisation? International Business Review, 16(5), 573–593. https://doi.org/10.1016/j.ibusrev.2007.06.001
Gunnarson, A. (2011). The Selection of Entry Modes when Penetrating a Foreign Market. Linnaeus University. Published Master Thesis
Gunhan, S., & Arditi, D. (2005). International Expansion Decision for Construction Companies. Journal of Engineering Management, 131(8), 928-937
International Monetary Fund (2020). World Economic Outlook. Retrieved from https://www.imf.org/external/datamapper/datasets/WEO
Investopedia (2016). Top 25 Developed and Developing Countries. Retrieved from https://www.investopedia.com/updates/top-developing-countries/
Kuepper, J. (2018). Newly Industrialised Countries. International Investing. Retrieved from https://www.thebalance.com/what-are-newly-industrialized-countries-nics-1978978
Lim, B. T. H., Oo, B. L., & Ling, F. (2010). The survival strategies of Singapore contractors in prolonged recession. Engineering, Construction and Architectural Management, 17(4), 387–403.
Loo, S. C., & Abdul-rahman, H. (2012). Malaysian Contractors in Gulf Construction : A Preliminary Study on Financial and Economic Risks. IACSIT International Journal of Engineering and Technology, 4(4), 437–441.
Low, W. W., Abdul-Rahman, H., & Zakaria, N. (2015). The impact of organizational culture on international bidding decisions: Malaysia context. International Journal of Project Management, 33(4), 917–931. https://doi.org/10.1016/j.ijproman.2014.10.010
Maizland, L., and Albert, E. (2020). ASEAN : The Association of Southeast Asian Nations. Council on Foreign Relation. Retrieved from https://www.cfr.org/backgrounder/asean-association-southeast-asian-nations."please check the author name. from the provided link there have two author name"
Mat Isa, C. M., Ab Rani, N. I., Preece, N. C., & Mohd aman, H. (2014). Identification of Malaysian Contractors with Sustained International Operations ( CSIO ). In Chapter 25 - InCIEC2014 (pp. 287–299).
Mat Isa, C. M., Mohd, H., Rashidah, S., Nasirs, M., Jaapar, A., & Jaapar, A. (2013). Motives for International Market Expansion by Malaysian Construction Firms using Correlation Analysis. In International Conference in Research Methodology for Built Environment and Engineering (ICRMBEE2013) (pp. 17–18).
Mat Isa, C. M., Mustaffa, N. K., Mohd Saman, H., Mohd Nasir, S. R., & Che Ibrahim, Che Khairilngineering, C. (2012). Factor Influencing Malaysian Construction Firms in Venturing into International Markets. In International Conference on Innovation, Management and Technology Research (ICIMTR2012) (pp. 168–173). IEEE explore.
Mat Isa, C. M. (2016). An Integrated Model for Intenational Market Entry Location,Entry Timing and Entry Modes (ELETEM) Decisions of Malaysian Construction Firms. Universiti Teknologi Mara. PHD Thesis.
Mat Isa, C. M., Adnan, H., & Endut, I. R. (2006). Malaysian Contractors‟ Opinions Towards International Market Expansion. In International Conference in the Built Environment in the 21st Century (ICiBE2006) (Vol. 1, pp. 287–298).
Materials Research Society (2019). World Bank Classifications for Developing Countries. Materials Research Society, Washington, D.C. https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups
National Geographic (2019). United States. Retrieved from https://kids.nationalgeographic.com/explore/countries/united-states/#united-states-golden-gate-bridge.jpg
Nielsen, L. (2011). Classifications of Countries Basedon their Level of Development: How it is Done and How it Could Be Done. IMF Working Papers. https://doi.org/10.5089/9781455216789.001
Preece, C. N., Mat Isa, C. M., Mohd Saman, H., & Che Ibrahim, C. K. I. (2016). Development of entry location , entry timing and entry mode decision model for construction firms in international markets. Construction Management and Economics, 34(4–6), 236–257. https://doi.org/10.1080/01446193.2015.1084429
Rani, N. I., Mat Isa, C. M., & Preece, C. N. (2015). Development of Foreign Competitor Identification Index ( FCII ) in Malaysia F. Information Management and Business Review, 7(1), 12–22.
Sarpin, N., Ling, C. Y., Kasim, N., Noh, H. M., Omar, R., & Zainal, R. (2019). Key Strategies in Undertaking International Construction Project : Contractors ’ Perspective. In MATEC Web of Conferences (IConBEE2018) (p. 266). Retrieved from https://doi.org/10.1051/matecconf/201926603019
Schwab, K. (2015).The Global Competitiveness Report 2015–2016. World Economy Forum,Geneva.
The United Nations Statistics Division (2019). Countries in Africa. Retrieved from https://unstats.un.org/unsd/databases.htm
Tiong, R., & Yeo, K. T. (1993). Project financing as a competitive strategy in winning overseas jobs. International Journal of Project Management, 11(2), 79–86.
Wijeratne, D. (2018). The Future of ASEAN – Time to Act. PwC Growth Markets Centre. Retrieved from https://www.pwc.com/vn/en/publications/2018/pwc-gmc-the-future-of-asean-time-to-act.pdf
World Bank (2019).International Monetary Fund World Economic Outlook. Retrieved from http://statisctictimes.com/economy/projected-world-gdp-ranking.php
World Population Review (2019). Population of Countries in Africa 2019. Retrieved from http://worldpopulationreview.com/countries/countries-in-africa/
Yang, H., & Lu, W. (2013). Niche comparisons: toward a new approach for analysing competition and organizational performance in the international construction market. Construction Management and Economics, 31(4), 307–321. https://doi.org/10.1080/01446193.2013.777753
Downloads
Published
Issue
Section
License
Copyright (c) 2021 Journal of Academia
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
