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Cornell Hotel and Restaurant Administration Quarterly
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Global Brand Expansion

How to Select a Market Entry Strategy

Chekitan S. Dev

Cornell University School of Hotel Administration, csd5{at}cornell.edu

James R. Brown

West Virginia University College of Business and Economics, jbrown{at}mail.wvu.edu

Kevin Zheng Zhou

School of Business at the University of Hong Kong, kevinzhou{at}business.hku.hk

When hotel firms expand internationally, they must determine the ownership strategy and the management strategy that will best maintain the firm’s competitive advantage. Those decisions are made separately from each other and depend on the expanding company’s own strengths and the strengths found in the local market. That interplay between the company’s strengths and local resources drives the type of partnership or affiliation arrangement that the company uses to enter the foreign market. The decision regarding who controls management and marketing, for instance, depends to a large extent on whether the expanding company can rely on local interests to maintain the firm’s customer service standards. If the firm does not use customer service as a competitive advantage, it can make more use of third-party interests to operate the hotel. If the hotel facility is itself a point of competitive advantage, the decision on the extent of equity investment by the firm rests on whether local interests have sufficient resources to build and maintain the property.

Key Words: international hotel expansion • marketing • hotel management • franchise systems

Cornell Hotel and Restaurant Administration Quarterly, Vol. 48, No. 1, 13-27 (2007)
DOI: 10.1177/0010880406294472
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