Internationalisation Flashcards
proactive
the intentional action to focus a trajectory for business model evolution on to value creation in non-home locations.
reactive
adaptive responses within a firm’s business model to environmental pressures upon it which push the firm to operate in non-home locations.
international strategy framework
internationalisation drivers
market selection
mode of entry
geographic advantage
internationalisation drivers
why go international?
market selection
where to compete?
mode of entry
how to enter foreign markets?
geographic advantage
how to compete in foreign markets?
proactive internal internationalisation motives
managerial urge
growth and profit goals
preempt competition
economies of scale
unique product/technology
proactive external internationalisation motives
foreign market opportunities
change agents
location advantages
reactive internal internationalisation motives
risk diversification
extend sales of seasonal products
excess capacity
reactive external internationalisation motives
unsolicited orders
small home market
stagnant or declining home market
value creation
monetise firms value proposition
re-organise value network
refocus cost base
access new resources/activities
new segments
sustain and enhance pre-existing relations
value destruction
ignorance of process
simplify complexity
absence of trust in value network
intensity of competition in new segments
adaptation of pre-existing relations
market selection criteria
a matter of psychic distance: “factors preventing or disturbing the flows of information between the firm and the market”
psychic distanced is influenced by…
differences between home and host countries e.g. culture, language, political systems etc.
the CAGE framework
cultural distance
administrative distance
geographic distance
economic distance
risk
known or unknown?
ambiguity over PEST
ambiguity over value proposition
uncertainty in value network
segments still evolving
immature business system
opportunity
less ignorance
value proposition understood
PEST factors favourable
value network established
well established segments
mature business system
global strategy
- geographically centralised value-chain for standardised
products - economies of scale
- cross-cultural learning
transnational strategy
- geographically dispersed stages of a unified value
chain - move material, people, and ideas across national boundaries
international strategy
- centralised core competencies with minimum local
adjustments. - import/export or license existing products
multidomestic strategy
- geographically dispersed core competencies with
extensive local adjustments - franchise, joint venture, subsidiaries