Chapter 5

Question 1

What is the role of internalization in economic generation?

Answer 1

Increases home demand
Forengn exchange
Creation of wealth and Employment

Question 2

what are some STRATEGIES FOR SME INTERNATIONALISATION

Answer 2

Exporting (adaptive exporter)
International niche marketing
Domestically delivered or developed niche services
Direct marketing including electronic commerce
Participation in the international supply chain

Question 3

WHAT ARE KEY MOTIVATORS TO INTERNATIONAL MARKETING

Answer 3

Reactive stimuli(push)
 adverse domestic market conditions and opportunity to reduce inventories
 availability of production capacity and favourable currency movements
 opportunity to increase the number of country markets and reduce market related risk
 unsolicited orders from overseas customers

Proactive stimuli: (pull)
 attractive profit and growth opportunities
 ability to easily modify products for export markets
 public policy programmes for export promotion
 foreign country regulations
 possession of unique products
 economies resulting from additional orders

Managerial elements:
 presence of export minded manager
 opportunity to better utilize management talent and skills
 management believes about the value of exporting

Question 4

what are some BARRIERS TO INTERNATIONALISATION

Answer 4

 Trade barriers
 Transportation difficulties
 Lack of trained personnel
 Lack of export incentives
 Lack of coordinated assistance
 Unfavourable conditions overseas
 Slow payments by buyers
 Lack of competitive products
 Payment defaults
 Language barriers

Question 5

MCKINSEY 7S FRAME WORK

Answer 5

• Strategy
• Structure
• Systems
• style
• Staff
• Skills
• Shared values

Question 6

benefits of OUTSOURCING FOR SMES

Answer 6

 Managing difficulty of developing quickly
 improving flexibility
 firms reluctant to take risks in non-core areas

Question 7

Pros and cons of outsourcing

Answer 7

 Advantages
 opportunities for learning from OEM (Original Equipment Manufacturer)
 able to focus on production and technical issues

 Disadvantages
 need for dependence on one/two major customers
 internationalization driven by demands of OEM
 continual pressure to improve product and operations
 weakening external marketing
 loss of know-how
 costs of managing outsourced supplies