THE MARKET ACCESS PLANNING SYSTEM (MAPS): A COMPUTER-BASED DECISION SUPPORT SYSTEM FOR FACILITATING EXPERIENTIAL LEARNING... Developments in Business Simulation and Experiential Learning, Volume 25, 1998 THE MARKET ACCESS PLANNING SYSTEM (MAPS): A COMPUTER-BASED DECISION SUPPORT SYSTEM FOR FACILITATING EXPERIEN- TIAL LEARNING IN INTERNATIONAL BUSINESS Michel Mitri, Eastern Michigan University Grigorios Karimalis, Wayne State University Hugh Cannon, Wayne State University Attila Yaprak, Wayne State University ABSTRACT This paper describes a computer based program, Market Access Planning System (MAPS), to as- sist in the teaching of international marketing. MAPS is an expert system for developing market entry strategy and plans. The paper discusses the system and how it can be used as an adjunct to case analyses in international marketing classes. INTRODUCTION The last decade has seen enormous changes in the economic environment of business. The fall of the former Communist Block in favor of a more de- mocratic political structure and a more market- based economy, together with a rapid movement toward deregulation, privatization, and the reduc- tion of international barriers to trade in more tra- ditional economies, have combined to create a highly competitive market environment, one in which companies must make good decisions quickly, with little margin for error. In this environment, computer-assisted simula- tions and expert systems will play a critical role in giving managers a competitive edge. Many inter- national business simulations have been devel- oped for this purpose (e.g. Thorelli and Graves 1964; Scott and Strickland 1984; Edge, Keys and Remus 1985). These provide an excellent oppor- tunity for students to develop their international business decision-making skills. However, inter- national business also requires a great deal of spe- cific knowledge. For instance, a company that wants to enter a foreign market has a host of al- ternative entry-mode strategies available to it, in- cluding direct export, indirect export through agents, indirect exports through distributors, li- censing, franchising, and so forth. This paper describes an experiential learning ap- proach that presents students with detailed case studies involving actual or hypothetical compa- nies that are considering international trade. In order to help students solve the cases, the ap- proach uses a computerized expert system called MAPS through which students can produce a plan for international market entry. The Market Access Planning System (MAPS) is a computer-based decision-support system that guides students through research and analysis of case studies. We will begin by describing the ba- sic structure of the MAPS system. We will then conclude by explaining how it can be used to structure their learning regarding international market entry strategies. AN OVERVIEW OF MAPS The MAPS system is an expert system that pro- vides decision support for companies that are con- sidering foreign market entry. It is sufficiently detailed that it can be used in both an academic learning or a practical business decision environ- ment. It incorporates information and principles from a host of different sources to provide a com- prehensive evaluation of success potential for various international marketing approaches. For example, a company must decide whether it is ready for an international business commitment. Given that it is ready, it must make strategic deci- 101 Developments in Business Simulation and Experiential Learning, Volume 25, 1998 sions about which market to enter (i.e. what coun- try or region), how to enter that market (e.g. ex- port, license, build a plant, etc.), and how to adapt the product or service according to market needs. It must then make decisions about setting up the appropriate type of partnership, selecting distribu- tors and freight forwarders, evaluating the per- formance of expatriate personnel and foreign sub- sidiaries, and setting up legal contracts and pric- ing policies to fit the target market. MAPS addresses all these major decisions by identifying all the ingredients of successful busi- ness planning such as the identification, evalua- tion, and selection from a set of decision alterna- tives regarding entry modes; in particular per- forming a S.W.O.T analysis and subsequently ranking the most appropriate entry strategies based on that S.W.O.T. analysis. In order to visualize the kind of information in- cluded in the MAPS system, consider the more general expert system shell from which it was de- veloped. The shell is called CEVAL, for Candi- date Evaluator (Mitri 1995). It incorporates a number of general information categories that, in turn, provide the structure for MAPS. In this con- text, candidates refer to any decision alternatives from which the user is trying to choose. For MAPS, candidate evaluation addresses the suit- ability of candidate companies for alternative market entry strategies. The following are key concepts related to the MAPS system: 1. Evaluation criteria. Evaluation criteria consist of a hierarchical set of criteria containing rat- ing by importance. By hierarchical, we mean that the system contains categories and sub- categories, involving increasing levels of de- tail (See Figure 2). For instance, a criterion for evaluating licensing as a candidate method for market entry might be company characteris- tics. At a lower (more detailed) level of the hi- erarchy might be availability of resources, and below that company size. These characteris- tics would be relatively important as a crite- rion because licensing give the company a low level of control, but it is relatively inexpen- sive, thus making it more appropriate for companies with low levels of resources. 2. Evaluative questions. These are multiple choice questions that score candidates in their performance of the criteria. For instance, in the case of company size, the system would prompt the user to indicate whether the com- pany has 1-10 employees, 11-50, 51-100, and so forth, as shown in Figure 3. 3. Interpretation Fragments: These are text paragraphs based on criteria ratings that com- bine to form a report of recommendations to the user (See Figure 6). 4. Plans: These are decision alternatives for a par- ticular candidate. Plans are ranked from least to most promising (See Figure 7), together with an analysis of the reasons (See Figure 8). 5. Hypertext Tutorials: These are tutorials that can help gain insight into the reason for a rec- ommendation (See Figure 4). USING MAPS IN CASE ANALYSIS Figure 1 summarizes the manner in which MAPS would be used in a classroom, case analysis envi- ronment. Students would be given a case study describing either a fictional or real company and the product or service that the company provides, together with one or more potential target coun- tries to which the company may want to market its product or services. The case should be written in such a way that the characteristics of the com- pany and its product can be found by careful read- ing of the text. It should include as the target mar- kets countries for which a significant amount of information is available from the school’s library system or other accessible resources. After a careful reading of the case, the student will run the MAPS system and begin to answer questions related to MAPS’ S.W.O.T. analysis (see below). The questions will guide the student to look for pertinent information in the case’s text or in other resources related to target countries. The student must do significant research, particu- larly in target market analysis, but is guided in 102 Developments in Business Simulation and Experiential Learning, Volume 25, 1998 this effort via the MAPS structure. FIGURE 1: STEPS IN A TYPICAL USE OF MAPS FOR INTERNATIONAL BUSINESS STRATEGY FORMATION As a result of the S.W.O.T analysis, MAPS will present an overall evaluation of the company, its product, and the target market. Then, MAPS will produce a ranked list of potential strategies for entering the target market (entry modes) based on the results of the S.W.O.T. analysis. Students can then review these entry modes in order to learn what they involve and the reasons that they may be appropriate of inappropriate given the com- pany and target market. The MAPS results can be collected in digital or hard copy form and turned into the instructor for review and evaluation. In addition, different stu- dents’ (or teams’) results can be compared to il- lustrate the commonalties and/or differences in their assessments of the company and market. S.W.O.T. ANALYSIS IN MAPS The S.W.O.T. Analysis phase provides input needed for selection of the appropriate entry modes for the company. MAPS assists in this by guiding the user through a series of multiple- choice questions regarding the major factors rele- vant for international market entry. Major factors include company, target market, and product and marketing characteristics interacting with each other in the global environment (See Figure 2). Each of these is a CEVAL evaluation criterion, and is composed of other sub-criteria. FIGURE 2: THE HIERARCHY OF EVALUATION CRITERIA FOR THE MAPS SYSTEM IS COMPOSED OF COMPANY, TARGET MARKET, AND PROD- UCT/MARKET CHARATERISTICS, AND FORMS THE BASIS FOR THE SWOT ANALYSIS 1) Student reads a case study 2) Student runs MAPS for S.W.O.T. analysis: •Company assessment •Target market assessment •Assessment of product and marketing characteristics 3) MAPS presents interpretation and ranks plans 4) Students can compare results 5) Instructor reviews and provides feedback of students’ work 1. The Company, Target Market, and Product and Marketing Characteristics are divided into five, twelve, and three characteristics respec- tively, as displayed below. Thus, MAPS pre- sents students with a structured set of overall market entry conditions relevant for selecting an appropriate foreign-market entry mode. For example, the Company characteristics are composed of 2. Available resources, which are constituted of (a) Company size; (b) Ownership; ( c) Cur- rent Net Income; (d) Current Retained Earn- ings; and (e) Return on Assets; 3. Risk taking and Commitment; which are consti- tuted of (a) Current Management Attitude; (b) Current Employee Attitude; ( c) Projected Fi- nancial outlook; (d) Human Resources Alloca- tion; and (e) International Business Plan De- velopment; 4. Management Experience, which can be viewed in terms of (a) Work and Living Experience Outside Home Market; (b) International Transaction Experience; ( c) Number of Peo- ple Fluent in Host Language; and (d) Host Country Government Contact; 103 Developments in Business Simulation and Experiential Learning, Volume 25, 1998 5. Desire for Control, which can be seen through the lens of (a) Desire for Strategic Control; (b) Level of Ownership Desired for Market; ( c) Desired Operational Management Control; (d) Desired control Over Technology; and (e) De- sired Control Over Manufacturing; 6. Organizational Culture, which can be seen in terms of (a) Management Style; (b) Organiza- tional and Management Flexibility; ( c) Prior- ity Setting; and (d) Decision-Making Process; The Target Market Characteristics are com- posed of 1. Political Characteristics which are composed of (a) Political Stability; (b) Regime Style; and ( c) Political Risk; 2. Economic Characteristics which can be viewed in terms of (a) Balance of Payments; (b) Infla- tion Rates; ( c) Currency Convertibility; (d) Status of Banking Systems; (e) Importance of Economic Assistance and Incentives; (f) Level of Economic assistance and incentives; 3. Legal Characteristics which can be seen in terms of (a) Intellectual Property Protection; (b) Ownership Laws and Regulations; ( c) Contact Laws Regarding Sales, Agents etc.; (d) Labor Laws; (e) Local Content Require- ments; (f) Environment Regulations and Stan- dards; 4. Taxes which are consisted of (a) Corporate Tax Rates; (b) Individual Tax Rates; ( c) Tax Treaties for Companies, Individuals; (d) Value Added Taxes; (e) Tariffs / Duties; (f) Sur- charges; (g) Taxes on Dividends; 5. Financial characteristics of the Market which are consisted of (a) Repatriation of Capital Earnings; and (b) Availability of Local Credit; 6. Transportation Characteristics which can be seen in terms of (a) Types Available; (b) Ex- tensiveness; ( c) Reliability; (d) Cost; and (e) Distribution Channel; 7. Communication Characteristics which are con- sisted of (a) Mail and packages; (b) Telecommunications; 8. Cultural Environment which can be seen through the (a) Business / Personal Customs; (b) Management Styles and Practices; (c) In- terpersonal interactions; (d) Ethics / morality of business; (e) Market Receptivity; (f) Per- cent of Host People Speaking English; (g) Ease of Learning Host Country Language (s); 9. Production Characteristics can be seen in terms of (a) Trade Secrets; (b) Local Supplier Scope/Strength; ( c) Availability of Skilled Workers; (d) Availability of Professional Tal- ent; (e) Availability of Natural resources; (f) Availability of Utilities; (g) Relative cost of Producing in Host Country(ies); 10. Market Characteristics can be seen in terms of (a) Market Size; (b) Market Segmentation; ( c) Meet Existing Need or Create New Need; (d) Market Hub Capability; (e) Marketing Support Service Availability; (f) Methods of Distribution Available; 11. Customer Analysis which can be done in terms of (a) Demographics and Psychograph- ics; (b) Purchasing Power; and ( c) Decision Making Process; The Product and Marketing Characteristics are composed of: 1. Industry Trend Analysis which is constituted of (a) Home Market Characteristics; and (b) Global Market Characteristics; 2. Product Analysis which can be seen in terms of (a) Level of Home Government Export Con- trol; (b) Level of Home Government Export Support; ( c) Product Labeling and Packaging Regulations; (d) Degree of Product Differen- tiation; (e) New Product Development; and (f) After-Sales Services Requirements; 3. Competitive Analysis which is constituted in terms of (a) Number of Competing Firms al- ready Present; (b) Availability of Competitive Products and Products Substitutes; ( c) Tar- geted Share of Home / Global Market; (d) Or- der of Entry into Market; 4. Marketing Characteristics can be identified in 104 Developments in Business Simulation and Experiential Learning, Volume 25, 1998 terms of (a) Buyer Behavior; (b) Influential Ad- vertising and Promotions; (c) Brand Recogni- tion; and (d) Cost of Producing and Promoting Product. FIGURE 3: THE STUDENT USER IS PRE- SENTED WITH A SERIES OF EVALUA- TIVE QUESTIONS IN MULTIPLE-CHOICE FORMAT. THESE QUESTIONS PROVIDE THE BASIS BY WHICH THE SWOT ANALYSIS EVALUATES THE CRITERIA FOR INTERNATIONAL MARKET ENTRY. STUDENT’S INTERACTION WITH MAPS As we have noted, the presentation to the students is based upon multiple choice answers to evalua- FIGURE 4: THE STUDENT CAN REQUEST AN EXPLANATION FOR A QUESTION, AND FROM THERE CAN FOLLOW A SE- RIES OF HYPERTEXT LINKS TO OTHER RELATED TOPICS. THIS PROVIDES A TUTORIAL COMPONENT TO THE MAPS SYSTEM. tive questions related to the twenty criteria de scribed above. This provides a user-friendly inter- face that facilitates the case analysis. As the user FIGURE 5: STUDENTS CAN ENTER COM- MENTS TO DOCUMENT AND JUSTIFY THE ANSWERS THEY GIVE TO THE QUESTIONS. progresses through the question and answer proc- ess (Figure 3), his or her responses to the ques- tions cause the assignment of quantitative scores and qualitative ratings to the evaluation criteria (Figures 7). Each question is also provided with FIGURE 6: THE INTERPRETATION OF THE SWOT INCLUDE QUANTITATIVE SCORES AND QUALITATIVE RATINGS FOR EACH CRITERION, ALONG WITH PARAGRAPHS PROVIDING DETAILED EXPLANATIONS OF THE FINDINGS. 105 explanations and hypertext linkages, should the Developments in Business Simulation and Experiential Learning, Volume 25, 1998 student not be familiar with some terminology (Figure 4). Similarly, the final rankings and rat- ings are accompanied by explanations of the rea- soning (Figure 8). In addition, the user can enter comments regard- ing their answers to a question (as illustrated in Figure 5). This provides a feedback mechanism by which the instructor can ensure that the student is giving full consideration to the questions. As a result of the question-and-answer process, a report is generated which shows the quantitative scores and qualitative ratings, together with detailed in- terpretations of the results of the SWOT analysis. ENTRY MODE SELECTION Along with assessing the strengths and weak- nesses of the company, and the opportunities and threats associated with the target market and product/marketing characteristics analysis, the S.W.O.T. serves as input for establishing the most appropriate strategy for entering the target market. We refer to this as entry mode selection. FIGURE 7: THE PLANNING RANKING DISPLAYS ALL THE ENTRY MODES TO THE USER IN ORDER OF THEIR APPRO- PRIATENESS GIVEN THE RESULTS OF THE SWOT ANALYSIS. T C c te e p wholly owned subsidiaries/facilities. Each mode has certain factors that support it and other factors that refute it as an option. Based on these support- ing and refuting factors, the entry modes are scored and ranked from most promising to least promising, and then presented to the user. The user can select one of the entry modes in order to get a description of that plan. In addition, the user can obtain details regarding the factors that sup- port and/or refute any particular entry mode. FIGURE 8: A PARTICULAR PLAN (ENTRY MODE) CAN BE QUERIED TO OBTAIN A DETAILED DESCRIPTION OF THE FAC- TORS THAT SUPPORT AND/OR REFUTE THE PLAN. SUMMARY AND CONCLUSIONS This article described an experiential learning ap- proach that combines cases involving actual or he different entry modes are implemented via EVAL’s planning feature. Each mode (plan) in- ludes various export types (through trading in- rmediaries, distributors, or directly to custom- rs), licensing, franchising, or contracting, various artnership arrangements (e.g. joint ventures), or h n p c t S s r g s b t s M 106 ypothetical companies that are considering inter- ational trade combined with a computerized ex- ert system called MAPS through which students an produce a comprehensive plan for interna- ional market entry. The Market Access Planning ystem (MAPS) is a computer-based decision- upport system that guides students through their esearch and analysis of the case studies. We be- an by describing the basic structure of the MAPS ystem. We then described how it could be used y international business students to structure heir learning regarding international market-entry trategies. APS is sufficiently powerful to address the Developments in Business Simulation and Experiential Learning, Volume 25, 1998 needs of actual companies. However, when used in an educational setting, it teaches students the principles incorporated within the system, thus enriching their knowledge of export marketing. Its educational features include context specific tuto- rials and descriptions of the relationships between concepts through hypertext links. In this sense, it provides many of the same benefits as a conven- tional text book, or as library research, but in a much more applied and memorable setting. One of the advantages of the MAPS approach is its ability to incorporate an ever increasing range of knowledge and principles. By testing it against new cases, and incorporating the output of new research findings, the system can continually in- crease its usefulness. By repeated use, students can continue to increase their mastery of the prin- ciples involved in market entry strategy. Further- more, the underlying CEVAL system is not lim- ited to the market entry decision. MAPS, then, can be expanded to address other international marketing decisions as well, ranging from such diverse topics as product strategy to cross- national segmentation, pricing, and the like. It can also be adapted to the needs of particular compa- nies or industries, tailoring programs to address more specific bodies of international marketing expertise. Because it is computer-based, it can be easily applied in training programs in virtually any part of the world. REFERENCES Cavusgil, Tamer S. (1987) Qualitative Insights into Company Experiences in International Marketing Research, Journal of Business and Industrial Marketing 2(3):41-54. Edge, Alfred G., Bernard Keys and William E. Remus (1985), The Multinational Management Game (2nd ed.), Plano, TX: Business Publica- tions, Inc. Green, Donna H., Barclay, Donald, W. Ryans, Adrian, B. (1995). Entry Strategy and Long- Term Performance: Conceptualization and Em- pirical Examination, Journal of Marketing, 59, 1-16 Mitri, Michel (1995). MAPS: A Planning System for International Market Entry, International Journal of Intelligent Systems in Accounting, Finance, and Management 5: 57-72. Root, Franklin, R. (1994). Entry Strategies for International Markets. New York: Lexington Books. Scott, C.R. Jr. And A.J. Strickland III (1985), Tempomatic IV: A Management Simulation, Third Edition, Boston, MA Houghton Mifflin. Thorelli, Hans B., Grave, R.L., and Howells, L.T. (1964), INTOP (International operations Simu- lation), New York: The Free Press. Yannopoulos, Peter (1997). The Use of Artificial Intelligence in Marketing Research, in Amin Sammy, Fullerton Sam, and Neumann ed. Inter- national Business Practices: Contemporary Readings, p. 496-504. For further information, contact: Michel Mitri, Ph.D. Associate Professor Department of Finance and CIS Eastern Michigan University Ypsilanti, MI 48197 (313) 487-4044 - Telephone Michel.Mitri@emich.edu E-mail 102 Table of Contents Volume 25, 1998 Marketing Goes to the Movies Bringing Experiential Learning to a Principles of Marketing Course Investment Analysis Application Using In-house Spreadsheet Models SugarCoated Statistics: An Exercise for the First Day of Class Improving Undergraduate Student Involvement in Management Science and Business Writing Courses Using the Seven Principles in Action Establishment and Funding for Interuniversity / Multidisciplinary Student experiences The Prospects of Creative Teaching: A Discussion with Patricia Sanders The Simulation and Classroom Assessment Techniques Developments of Management Skill Assessment Games as Instruments of Assessment: A Framework for Evaluation The Role of Artificial Intelligence in Business Curricula Threshold Solo Competitor: A Management Simulation (V1.0) a Windows-Based. Play Alone, Total Enterprise Simulation and Assessment Instrument Toward An Understanding of One's self-concept Total Enterprise Simulations and the Internet: Improving Student Perceptions and Simplifying Administrative Workloads The Expatriate an Assignment Orientation Game An Expatriate's Nightmare: An Experiential Exercise in Coping with Overseas Assignments Analyzing Experiential Exercise: Using the Scientific Method for Problem Solving The Second Component to Experiential Learning: A Look Back at How ABSEL has handled the Conceptual and Operational Definitions of Learning Predictive Models of Learning: Participant Satisfaction of Experiential Exercises in Business Education Accelerating Moral Development through Use of Experiential Ethical Dilemmas Ethical Dilemmas to use with Business Simulations to Teach Ethics The Class Approach in Behavioral Simulation in a Business Policy/Strategic Management course: A Progression toward Greater Realism An Exploration of the Emergence of Process Prototypes in a Management Course Utilizing a Total Enterprise Simulation How Organizations Are Improving Their Performance Utilizing Electronic Commerce: Examples From The Internet The Market Access Planning System (Maps): A Computer-Based Decision Support System For Facilitating Experiential Learning In International Business An Excel Workbook For Student Planning And Interface With A Simulation Game Design Of Multi-Media Based Pedagogy For Leadership Training Panel Discussion On Using The Internet For Courses Valuing And Enhancing Teaching: Sharing Tips Via The Web The Buddy Project: A Semester Long Project Aimed At Developing An Appreciation For Diversity Enhancing The Excitement And Learning Retention In The Classroom: The Power Of Magic The Supervised Management Internship: A Job Or Learning Experience Team Ware™ An Online Moderated Class Discussion Facility And Beyond A Neophyte Distance Educator's Experience Learning Management By Practicing Management: A Report Of Significant Student Service In 1997 Integration Of Academic And Service Learning: Students' Perceptions About Its Effects And Outcomes The Value Of Incorporating A Service Learning Component Into Course Content: A Presentation And Roundtable Discussion Business Games Teach: Thoughts on the Sources of Conflicting Conclusions on their Effectiveness Antecedents Of Learning In The Simulation: A Replication Using Student Journals To Enhance Learning From Simulations Technological Change And Intertemporal Movements In Consumer Preferences In The Design Of Computerized Business Simulations With Market Segmentation Integrating The Marketing Curriculum Using Collaborative Learning Teaching Time Management In A Sales Program: The Application Of A Computer Simulation Game Adapting Interactive Computer Simulations For Content Based Esl Instruction Multimedia And Student Expectations Synthesizing Data For Media Simulations Composing A Team Health Promoting Behaviors-A Decision Making Exercise Does it really Work? An Application of the Group Interaction Framework Administering the MIT Beer Game: Lessons Learned A Paperless Economy? Instructing Students on the Aspects of Successful Electronic Commerce Maximizing Learning Gains in Simulations: Lessons from the Training Literature Observing General Ability in a Total Enterprise Gaming Simulation FReach Teach: A Computer-Based System for Teaching Advertising Media Planning An Integrated Business Instruction System An Experiential Exercise you can Tinker With Experiential Exercises or Computer Simulations? Cash Flow Statements: Are They Important in Business Simulations? Holistic Cognitive Strategy in a Computer-Based Marketing Simulation Game: An Investigation of Attitudes Towards the Decision-Making Process Barnga: A Game on Cultural Clashes The Many Faces of Culture: Understanding Country and Corporate Culture Students' View of the Use of Business Gaming in Hong Kong Assessing General Management Interest What is the Future of Business Gaming? Starting a Small Music Trivia Business Exercise and Other Innovative Icebreakers An Integrated Approach to Behavioral Skill Development Career Focus: A Student and Business Learning Experience The Use of Concept Mapping in Teaching Strategic Management An Experiential Approach to Developing Mission Statements Business Games in Brazil-Learning or Satisfaction A Simulation within a Simulation: Job Layoff's and Emotional Reactions