Session 4: Internationalization strategies Flashcards
Process of internationalization
- Uppsala model
- Network internationalization
- Stages models of internationalization.
Uppsala model
Uppsala model is a model of internationalization processes focusing on learning processes.
Network internationalization
Over time, firms in a network reinforce each others’ internationalization processes, thus the expertise in a firm’s network grows both with new members joining, and with existing members gaining more experience.
Stages models of internationalization.
internationalisation seen as a slow stage-by-stage process an SME goes through.
Internationalization strategies
- Sprinkler Strategie
- Waterfall Strategie
Gründe für die Expansion in andere Länder sind:
- The institutional environment of the home country
- Institutional distance between the home and host countries
Non-equity (indirect) entry modes
Firms can act as sellers or buyers or both. In international trade, the sellers are known as exporters, and the buyers as importers.
Intermediaries
- Direct exports
- Indirect exports
- Intermediaries
- Local sales agents receive a commission on sales
- Distributors trade on their own account;
International contracts
- Licensing z.B. Microsoft
- Franchising z.B. McDonald
Franchising Advantages
Advantages Franchisor:
- Venture can expand quickly using little capital
- Business can be expanded nationally and even internationally
Advantages Franchisee:
- Product acceptance: Has an accepted name, product, or service
- Knowledge of the market: Offers experience in business and market
Franchising Disadvantages
Disadvantages Franchisor:
- Difficulty in finding quality franchisees
- The franchisor does not have tight control over production and marketing, and thus how their technology and brand names are used
Disadvantages Franchisee:
- Die Unfähigkeit des Franchisegebers service, Dienstleistungen, Werbung und Standort zu bieten
Turnkey project:
A project in which clients pay contractors to design and construct new facilities and train personnel.
Design and build (DB) contract:
A contract combining the architectural or design work with the actual construction.
Build–operate–transfer (BOT):
A contract combining the construction and temporary operation of a project eventually to be transferred to a new owner.
Consortium:
A project based temporary business owned and managed jointly by several firms.
Subcontracting:
A contract that involves outsourcing of an intermediate stage of a value chain
Equity (direct) entry modes
- Natural resource seeking
- Market seeking
- Efficiency seeking
- Innovation seeking
Equity modes of entry
- Greenfield (New Venture in outside country)
- Full Acquistions (Ankauf)
- Joint Ventures (newly established)
- Partial acquisition
Types of acquisitions
- Conventional acquisition
- Brownfield acquisition
- Multiple acquisitions
- Staged acquisition
Paper: Herrmann, Pol/Datta, Deepak K. (2006):
Our findings indicate that CEOs with less firm experience preferred acquisitions and greenfield investments to joint ventures and, older CEOs were more likely to opt for joint ventures over greenfield investments.
