Mercadex-Desjardins model

Developed by Mercadex International, The Mercadex-Desjardins model helps SMEs build internationalization strategies. It helps companies find the answer to the following question: Based on the targeted market, what penetration strategy should be adopted?

The model helps SME managers select an appropriate penetration strategy based on two variables:

• The firm's level of integration. To what level should (could) the SME commit to the host country?

• The means of penetration. By what means should the firm attempt to penetrate that country's market?

The Mercadex-Desjardins model proposes, first of all, three levels of SME integration within the host country: delegation, cooperation and control. It also proposes three approaches to the target country: a transactional approach, a contractual approach and a structural approach. The juxtaposition of the three levels of integration and three penetration approaches gives rise to nine generic SME internationalization strategies.

Level of integration	Means of penetration
	Transactional	Contractual	Structural
Delegation	Outside trading house Subcontracting for a domestic exporting contractor	Transfer of manufacturing license or Marketing license	Minority participation in a foreign company
Cooperation	Distributor in the target country Manufacturing agent Wholesaler	Cross licensing Franchise Consortium	Joint venture Reciprocal participation
Control	Direct sale to a foreign client Sales office in the target country	OEM Manufacturing agreement BOT	Acquisition Foreign direct investment Greenfield

The nine strategies of the Mercadex-Desjardins model

Transactional and delegation
Transactional and cooperation
Transactional and control
Contractual and delegation
Contractual and cooperation
Contractual and control
Structural and delegation
Structural and cooperation
Structural and control