internalisation strategy Flashcards
reasons to enter international markets
small/ saturated domesticated markets economies of scale international production customer relationships market diversification international competitiveness
a firms internationalisation strategy will depend on…
size of the firm in its domestic market
firms strengths compared with overseas competitors
management experience of dealing in other countries
firms objectives for long-term growth
5 basic strategies to entering foreign markets
keep product and promotion the same worldwide- minimises entry cost eg. Coca Cola uses same advertising
adapt promotion only- promotion adapted for local cultural norms
adapt product only- e.g.. L’oreal products animal testing
adapt both product and promotion
invent new products- if existing product cannot meet the conditions in the new market
stages of development model- export(1)
manufacturer sells the firms products to a foreign importer and they handle the marketing
least cost
firm has little control over the way the product is marketing may lead to problems with the firms reputation
stages of development model- establishing a sales office(2)
implies greater financial commitment but greater control
joint ventures such as piggy backing arrangments (firm agrees to market other firms product alongside its own)
stages of development model- overseas distribution (3)
establishing a warehousing and distribution network in the foreign country- strong control over the marketing of the new product - relies on importing from home country
stages of development model- overseas manufacturers (4)
adapt the product more easily for overseas market, some cases manufacture costs are lower so further profits made
stages of development model- multinational marketer (5)
markets and manufactures in those countries that offer the best advantages
eclectic theory
firm will look into specific advantages over other firms both overseas and at home and plan market entry strategies without going through a series of stages.
