Research On Entry Mode For Resource-based Central Enterprises Based On CAGE Distance Model

Global configuration of the mineral resources has become an important part of the economic globalization. Mineral resources are important natural materials for human Social-economic development as well as affect a country’s foreign strategic plan and national security. China’s rapid economic development has brought rapid growth of energy and mineral resources demand, with the process of industrialization, urbanization and agricultural modernization, the total demand for mineral resources will continue to increase. Today. more and more companies began to enter the overseas market in order to achieve optimal allocation of resources and maximization of corporate interests. Central enterprises play important role in China’s implementation of "going out" strategy. Resource-based central enterprises participate the mineral resources re-configuration within global wide.Selection of target markets and market entry modes are the key for enterprise internationalization, which directly impact on the enterprise’s future strategic decision-making and management in a country market. Global communications are shrinking the world in recent years, turning it into a small and relatively homogeneous place.But when it comes to business, distance still matters, and companies must explicitly and thoroughly account for it when they make decisions about global expansion. This article from the resource-based central enterprises to international markets into the characteristics of the departure, in the context of the resources industry, through empirical analysis research resource type central enterprises to enter the international market, the case sample, verify that the target market factors into the mode selection, and thus for the resource-based central enterprises to enter the international The market mode selection decision model.Based on Prof. Pankaj Ghemawatt’s CAGE distance theory, Atthe author firstly selected100resource-based central enterprises international market entry cases which involved with37host countries as study cases. Then, using the CAGE distance model to get the quantitative data of distances between China and the host country in the mineral resources industry from cultural, administrative, geographical, and economic dimension. Using K-means clustering analysis method, according to the distance between these countries with China to cluster four types of target international markets:Repulse Bay market, oasis market, swamp market, deep-sea market. Further, the author made a cross-analyzes for the four types market corresponding to the typical countries. Binary logistic regression analysis of empirical data was used to test the influence of CAGE distance to entry model selection for resource-based central enterprises. Through cross-analyzes, the superior entry mode can be get for four types of target international markets. Finally, Location and Entry Model Selection (LEMS) Decision-making Model was designed for guiding resource-based central enterprises to select international target market and entry mode.