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Support International Business Expansion with Sequential Reviews

In: Sustainable Supply Chain Management

Author

Listed:
  • Rui Fernandes
  • Carlos Pinho

Abstract

This chapter is about the multinational company's decision on whether to enter new foreign markets using direct investment, exporting, or developing a local partner for distribution, with the possibility of scaling the investment under different demand levels. The perception of the host market demand does not remain the same during the investment period due to additional information and economic or political reasons. Therefore, the influence of uncertainty can be addressed by recombining a trinomial lattice model with changing uncertainty, to value investments with several interacting options. Overall, in this chapter we enhance the knowledge associated with exploring foreign markets subject to different demand uncertainties, valuing the flexibility of sequential options.

Suggested Citation

  • Rui Fernandes & Carlos Pinho, 2016. "Support International Business Expansion with Sequential Reviews," Chapters, in: Evelin Krmac (ed.), Sustainable Supply Chain Management, IntechOpen.
    • Handle: RePEc:ito:pchaps:102135
    DOI: 10.5772/62987
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    More about this item

    Keywords

    multinational corporations; international business; investments; demand uncertainty; real options;
    All these keywords.

    JEL classification:

    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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