Abstract
Purpose: This study develops an integrated framework to assist small firms in making foreign market entry decisions under uncertainty. By combining real options reasoning with effectual reasoning, the framework provides a strategic roadmap that balances structured decision-making with the flexibility needed to adapt to dynamic international markets.
Design/methodology/approach: The framework is built through a literature review identifying key factors influencing small firms’ foreign market entry decisions. These factors are prioritized using the fuzzy analytic hierarchy process (Fuzzy-AHP) to account for uncertainty in expert judgments. The quantitative strategic planning matrix (QSPM) translates these priorities into actionable strategies, combining quantitative analysis with behavioral and cognitive insights.
Findings: The framework enables small firms to systematically evaluate foreign market entry options using predictive and control-oriented approaches. It offers a structured yet adaptable decision-making process that considers resource constraints and the need for agility in uncertain external conditions. The framework’s effectiveness depends on the precision of Fuzzy-AHP and QSPM, highlighting the need for accurate expert input and ongoing refinement.
Research limitations/implications: In decision-making under uncertainty, especially in FME for small firms, repeating initial stages is often necessary to build knowledge and experience. However, this process can be time-consuming, highlighting the need for a solid understanding from the start. This research has developed a framework based on thorough analysis, providing strategic guidance for small firms. In this framework, FME mode decisions are based on current knowledge and experience, allowing for re-assessment as significant changes in the external environment occur. Extreme fluctuations, such as those caused by wars or economic sanctions, may require frequent repetitions of the decision-making process, demanding additional resources and time.
Practical implications: Small firms can use this framework to make informed decisions that align with their strategic objectives and resource limitations. By following the simplified steps, decision-makers can balance risk and opportunity, improving their chances of successful international market entry. Policymakers can also use insights from this study to support small firms’ internationalization efforts through targeted mechanisms.