Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

2. International Marketing > L2: Internationalization process > Flashcards

L2: Internationalization process Flashcards

1
Q

Proactive motives (Hollensen, 2013)

A

Represents stimuli to attempt strategy change, based on firm’s interest in exploiting unique competences or market possibilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Types of proactive motives (Hollensen, 2013)

A
  1. Profit and growth goals
  2. Managerial urge
  3. Technology competence/ Unique product
  4. Foreign market opportunities/ Market information
  5. Economies of scale
  6. Tax benefits
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q
  1. Profit and growth goals proactive motive
A

Increase profit by selling more (exploit all existing resources) or buying better (access comparative advantage of host country and utilize its competitive advantage).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q
  1. Managerial urge proactive motive
A
  • Managers’ commitment and motivation that reflect the desire and enthusiasm to drive internationalization forward. The desire for entrepreneurial motivation (market expansion and continuous growth), cultural socialization, etc.
  • Strategy depends on the decision-makers.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q
  1. Technology competence / Unique product proactive motive
A
  • Real or perceived advantage?
  • The issue: how long the competitive advantage can continue, due to competing technologies and international patent protection.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q
  1. Foreign market opportunities/ Market information proactive motive
A
  • Only if the firm can secure those resources necessary to respond to the opportunities.
  • Explore markets with similar opportunities to their home.
  • Tempting opportunities: ASEAN (economic success), Eastern European (political freedom).
  • Market information: specialized MKT knowledge (competence) or secret-shared access to information.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q
  1. Economies of scale ( - learning curve) proactive motive
A
  • Exploit the resources and capabilities (competitive advantage) at home to transfer them abroad and benefiting from economies of scale.
  • BCG report in production cost <30% -> benefit for both domestic and foreign sales.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q
  1. Tax benefits proactive motive
A
  • Allow firm either to offer products at a lower cost in foreign markets or to accumulate a higher profit.
  • Anti-dumping (WTO) to against selling very cheap price on local market.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Reactive motives (Hollensen, 2013)

A

Firm reacts to pressures or threats in its home market or in foreign markets and adjusts passively to them by changing its activities over time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Types of reactive motives (Hollensen, 2013)

A
  1. Competitive pressures
  2. Domestic market: small and saturated
  3. Overproduction/ Excess capacity
  4. Unsolicited foreign orders
  5. Extend sales of seasonal products
  6. Proximity to international customers / psychological distance
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q
  1. Competitive pressures reactive motive
A
  • Losing domestic market share to competing firms

- Losing foreign markets permanently to domestic competitors.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q
  1. Domestic market: small and saturated reactive motive
A
  • Small market: unable to sustain economies of scale, so they export industrial goods that have few customers or consumer goods with small national segments.
  • Saturated domestic market: products in declining stage of PLC. So firms choose to prolong the PLC by going abroad, especially the developing markets.
  • Unused productive resources exist within firm (ex: production and managerial slack).
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q
  1. Overproduction / Excess capacity reactive motive
A

a. Overproduction: high inventory level => export sales via short-term price cuts, then can terminate global activities.
- However, customers are not interested in temporary business relationships.
b. Excess capacity: not fully utilized equipment => export to spread fixed cost.
- Changing demands in domestic market for new products => Sell old version globally.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q
  1. Unsolicited foreign orders reactive motive
A

The orders can result from advertising in trade journals that have a worldwide circulation, through exhibitions and by other means.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q
  1. Extend sales of seasonal products reactive motive
A

Seasonality in demand conditions may be different in the domestic market from other international markets.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q
  1. Proximity to international customers / Psychological distance reactive motive
A

The physical and psychological proximity to the international market. (Ex: EU)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Internationalization triggers (Hollensen, 2013)

A

The internal or external events taking place to initiate internationalization.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Types of internal triggers (Hollensen, 2013)

A
  1. Perceptive management
  2. Specific internal event
  3. Inward/Outward internationalization
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q
  1. Perceptive management internal trigger
A

They gain early awareness of developing opportunities in overseas market. Business becomes knowledgeable about these markets, and managers are open-minded about overseas expansion.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q
  1. Specific internal event internal trigger
A
  • A major event such as overproduction or a reduction in domestic market size.
  • Employees may find ways to motivate their management in undertaking global marketing activities.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q
  1. Inward/Outward internationalization internal trigger
A
  • Importing (inward) may precede and influence market entry and marketing activities (outward) in foreign markets.
  • It is initiated by the buyers who initiate the reverse marketing, or the buyers (importer) who gain access to the network of suppliers.
  • Inward activities: franchisee and licensee in host country, import direct, import intermediary, buying agent, etc.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Factors causing internationalization - as an outward-driven activity (Fletcher, 2011)

A
  1. Management characteristics: Demographics, International exposure, Knowledge of IB
  2. Organizational characteristics: Technological advantage, Willingness to fund IB, Nature of products
  3. External impediment: Exchange rate, Competitors activities, Perception of risk
  4. External incentives: Overseas demand, Excess capacity, Reduction in cost.
23
Q

The holistic approach (Fletcher, 2011)

A
  • Firms become internationalised by undertaking import-led activities.
  • Firm’s international decision-making is both multidimensional (both inward and outward-driven) and multifocal (both circumstances of the firm and market).
  • ‘inward’ and ‘outward’ activities are ‘linked’ in different ways: strategic alliances, cooperative manufacturing and countertrade.
24
Q

Types of external triggers (Hollensen, 2013)

A
  1. Market demand
  2. Network partners
  3. Competing firms
  4. Trade associations and other outside experts
  5. Financing
25
Q
  1. Network partners external triggers
A

Access to external network partners encourages company to use this as a source of knowledge (ex: access to international sales via distribution and sales network).

26
Q
  1. Trade associations and other outside experts external triggers
A
  • Small firms decide to export on the basis of collective experience of the group of firms which they belong.
  • Outside experts: Export agents (handle exportable products), Governments (export assistance program), Chambers of commerce (overseas market information) and Banks (capitalize foreign opportunities).
27
Q
  1. Financing external trigger
A

Financial resources to fund international activities.

  • Influenced by firm’s willingness to borrow funds from financial institutions.
  • Raise funds by Government grants. Or a riskier method, industry grants, debt or equity finance.
28
Q

Globalisation’ impact on business environment (Lee and Carter, 2012)

A

impact on PEST aspects of global business environment.

29
Q

Globalisation’ impact on Economic factor

A

Global presence of businesses, Integration of financial institutions, Emergence of international competition

30
Q

Globalisation’ impact on Political factor

A

Distribution of politico-economic power, Loss of national sovereignty, Presence of global institutions.

31
Q

Globalisation’ impact on Socio-cultural factor

A
  • More frequent exchange of culture through cheaper travel, television, networks, and communication.
  • Increased trade of cultural goods (both tangible goods and intangible services).
32
Q

Globalisation’ impact on Technological factor

A

Global communication technologies, Global transportation technologies; Speed and frequency technological change.

33
Q

Opportunity of globalization (Lee and Carter, 2012)

A

1) Market access
2) Financial integration
3) Reduction in communication and transportation cost.
4) Global , purchasing and production.

34
Q

1) Market access as an opportunity

A
  • WTO: Reduce tariff and non-tariff barriers.

- Trade liberalization: access to more products, economies of scale, drive up competition that improves quality

35
Q

2) Financial integration as an opportunity

A

The movement of financial capital flow allows exchange, and being central to economic growth.
Two types: portfolio capital (bank) and FDI.

36
Q

3) Reduction in communication and transportation cost as an opportunity

A
  • Reach wider audience and communicate effectively.

- Minimize tax by locating HQ strategically and adopting transfer pricing.

37
Q

4) Global sourcing, purchasing and production as an opportunity

A

Reason: increasing complexity in product design, production process and logistical infrastructure

38
Q

Threat of globalization (Lee and Carter, 2012)

A
  • Macroeconomic volatility
  • Intensification of competition
  • The growing anti-globalisation sentiments
39
Q

Macroeconomic volatility as a threat

A
  • Increasing vulnerability of national economies to global macroeconomic crisis.
  • Difficulty for government to manage domestic economic activity: lack of regulation, limited choice of tax rate.
  • Massive economic contraction and sluggish global consumer demand => Cut foreign investment.
40
Q

Intensification of competition as a threat

A
  • Markets are more turbulent and unpredictable.
  • Difficult for local firm to fence off foreign competitors.
  • The intensification of global competition and digitization with connectivity create knowledge-based competition.
41
Q

The growing anti-globalisation sentiments as a threat

A
  • Growing divide between the rich and poor regarding income (The ‘Champagne Glass’ phenomenon).
  • Developing countries confront protectionism in the rich countries, which are barriers in exactly the comparative advantage areas of developing countries: agriculture and labour-intensive manufacturers.
  • Environmental degradation.
42
Q

Information search and translation (Hollensen, 2013)

A
  • Most critical factor in the initiation stage.
  • It is through information search and translation into knowledge that management becomes informed on internationalization.
  • Once sufficient information has been acquired and translated, the firm proceeds to internationalization-trial.
43
Q

Barriers hindering internationalization initiation (slide + Hollensen, 2013)

A
  • Cultural, history, economic, political barriers.
  • Insufficient finances
  • Insufficient market knowledge
  • Lack of foreign market connections
  • Lack of foreign channels distribution
  • Management emphasis on developing domestic markets
44
Q

Two pathways of internationalization (Hollensen, 2013)

A

1) Born global pathway

2) Uppsala model

45
Q

Born global companies definition (Hollensen, 2013)

A
  • The firm that from its inception pursue a global vision and globalizes rapidly without any preceding long-term domestic or internationalization period.
  • Shower entry
46
Q

Three phases of Born global development (Gabrielsson et al., 2008)

A

1) Introductory phase - seek right channel, financing, integrated strategy (operation and market), system to acquire learning
2) Growth and resource accumulation: acquire learning from partners and initial customers
3) Break-out and required strategies: self-generate capital or go to the financial market for a public offering of shares to raise capital.

47
Q

Characteristics of Born Global Companies (Hollensen, 2013; Gabrielsson et al., 2008)

A
  • More than 25% of foreign sales outside own continent within 3 years.
  • Global market potential products; Independent firm (start-up); Technology-oriented; Capability to seek methods of accelerated internationalization.
  • Flexible to change strategy of SMEs/Born global.
  • Global network/hubs.
48
Q

Strength of Born Global

A
  • Niche innovative companies, often filing the gaps where large corporations are lagging behind.
  • No direct competitors.
  • High level of expertise (not necessarily correlated with an age of the founders).
49
Q

Uppsala model (Hollensen, 2013)

A
  • Companies begin their operations abroad in fairly nearby markets and only gradually penetrated more far-flung markets.
  • Waterfall approach
  • Gradually learning-by-doing process, incremental decision making with little influence from competition.
50
Q

Critical views of Uppsala model (Hollensen, 2013)

A

1) Too deterministic
2) Does not consider interdependencies between different country markets
3) Not valid for service industries
4) Does not explain leapfrogging (entering distant markets or intermediate entry mode)

51
Q

Factors affecting the process of Uppsala model (Hollensen, 2013)

A
  • Market commitment (resources committed - size of investment - and degree of commitment - difficulty of finding alternative use of resources).
  • Psychic distance (differences in language, culture, and
    political systems) may disturb the information flow.
52
Q

4 stages of Uppsala model (Hollensen, 2013)

A

1) no regular export activities (sporadic export)
2) export via independent representatives (export mode)
3) establishment of a foreign sales subsidiary
4) foreign production/ manufacturing units

53
Q

4 market expansion strategies

A

1) Incremental (Waterfall) entry: Happens at different levels
2) Simultaneous (Shower) entry: Happens at the same time
3) Concentration: Similar markets with similar strategies
4) Diversification: Countries with different markets.

2. International Marketing (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions