Particularly in SMEs international market selection is simply a reaction to a stimulus provided by a change agent, in the form of an unsolicited order.

A more proactive and systematic approach to IMS entails the following steps:

• selection of relevant segmentation criteria
• development of appropriate segments
• screening of segments to narrow down the list of appropriate countries (choice
• of target)
• micro-segmentation: development of sub-segments in each qualified country or across countries.

However, the pragmatic approach to IMS is often used successfully by firms. Often coincidences and the personal network of top managers play an important role in the ‘selection’ of the firm’s first export market. In making the IMS, the firm must seek the synergy between the possible new target market and its own strengths, objectives, and strategy. The firm’s choice of new international markets is very much influenced by the existence of complementary markets and the marketing skills gained in these markets.

After the four steps described above the market expansion strategy of the chosen market is a key decision. In designing this strategy the firm has to answer two underlying questions:

• Will it enter markets incrementally (the waterfall approach) or simultaneously (the shower approach)?
• Will entry be concentrated or diversified across international markets?

Corporate portfolio analysis represents an excellent way of combining the international market selection (the geographic dimension) with the product dimension. It is important to assess how to allocate resources across geographic areas/product businesses. However, it is also important to evaluate the interconnectedness of various portfolio units across geographic borders. For example, a particular customer (located in a certain country) may have businesses in several countries.