The Determinants Of International Market Selection: A Study On Asia-Pacific Food And Beverage Manufacturing Firms

Abstract

Selecting a host country for international expansion is one of the most challenging and time-consuming tasks in many businesses because of the enormous number of possibilities, competing objectives, and a range of considerations. In direct contrast to previous decades' portfolio expansion methods, food corporations today are increasingly refining their focus and streamlining their portfolios. Globalization has compelled major food manufacturers to take the required steps to increase their competitiveness. Unlike other manufacturing sectors, food enterprises are not controlled by major corporations with production facilities in a few places. Manufacturing operations, on the other hand, are distributed over the globe, since businesses want to situate their production facilities near their target consumers. The objective of this research was to determine the factors that affect host country selection during the international market selection process. The datasets were collected from 68 food and beverage companies in the Asia-pacific regions. Six hypotheses were developed and tested using the Probit and logistic regression analyses. The findings showed that when selecting a host nation, food and beverage firms searched for one with a significant consumer market potential as well as a low risk. Interestingly, the geographical and cultural closeness between possible host nations and food and beverage corporations influences their choice of abroad markets. When it comes to deciding between abroad markets, a company's size and expertise are irrelevant, according to the findings of this study. It is clear that the variables driving foreign market selection vary from country to country when these results are contrasted with the evidence from other similar emerging economies.