Export MarketExpansionStrategy41Imp

Export Market
Expansion
Strategy
41
Impact of Export Market
Expansion Strategy on
Export Performance
Chong S. Lee
Lucky-Goldstar, Seoul, Korea, and
Yoo S. Yang
University of Wisconsin-Milwaukee, Wisconsin, USA
In the literature, export market expansion strategy is defined as the long-range
strategic decision as to the rate of export market expansion over time and the
allocation of marketing efforts among different export markets (Ayal and Zif,
1979). Since export market expansion strategy has been regarded as a potentially
important determinant of a firm's export performance, the choice of a particular
export market expansion strategy is expected to have a significant influence
on formulating a firm's overall export marketing mix strategies, and eventually
on its export performance (Piercy, 1982). Therefore, most export strategy
studies tend to suggest a specific type of export market expansion strategy
as the ideal means of achieving better export performance. However, there
has been no consensus among researchers with regard to which strategy, market
concentration or market diversification, is expected to lead exporting firms to
better export performance.
The fact that researchers have made seemingly contradictory suggestions
can be explained partly by the lack of well-operationalised types of export market
expansion strategy, and partly by the research framework used in previous
empirical studies. The multidimensional nature of export market expansion was
not sufficiently reflected in most of the past empirical studies that simply used
the number of export country markets as representing a particular export market
expansion strategy. Further, despite the large number of studies of export
performance, relatively few studies have attempted to analyse systematically
the possible influence of choosing a particular export market expansion strategy
on the export performance of firms.
An important objective of this study is to propose an operationalisation scheme
in which export market expansion strategy is measured as a multidimensional
construct. Another major objective of this study is to examine the effect of
the choice of an export market expansion strategy on the export performance
of firms, using multiple measures of performance.
Pertinent Literature
Two alternative export market expansion strategies have been broadly discussed
in the export literature — export market concentration and diversification.
Traditionally, the geographical dispersion of export markets has been the
major method of differentiating the two types of export market expansion