Strategic International Marketing

Question 1

Internationalization

Answer 1

This is the cross-border business activities of a company. This can refer to anything from importing and exporting goods and services to establishing sales and production facilities abroad.

Question 2

In order for modern companies to be successful in the long term

Answer 2

they must expand their growth potential, enter into strategic alliances, or relocate their production to other countries, often with lower wage levels.

Question 3

Internationalization represents a unique challenge for businesses:

Answer 3

On the one hand, they benefit from cultivating a global market for their products, but on the other hand, they face an increase in competitive pressure.

Question 4

the fundamental objective of any company

Answer 4

is to maximize profits.

Question 5

Internationalization:

Answer 5

• Definition: Cross-border business activities of a company.
  
  • Importance: Increases economic opportunities, access to new markets, and growth potential.

Question 6

Internationalization of Competition:

Answer 6

• Definition: Leads to lasting changes in the global economy, increases competitive pressure on companies.
  
  • Impacts: Necessitates strategic alliances, production relocation, and expansion into foreign markets.

Question 7

Benefits of Internationalization:

Answer 7

• Increased growth potential.
  
  • Access to new markets.
  • Strategic alliances and production efficiencies.

Question 8

Challenges of Internationalization:

Answer 8

• Higher competitive pressure.
  
  • Cultural and regulatory barriers.
  • Operational complexities.

Question 9

Forms of Internationalization Activities:

Answer 9

• Importing/exporting goods and services.
  
  • Establishing sales/production facilities abroad.
  • Entering strategic alliances/partnerships.
  • Direct investments (wholly-owned subsidiaries, acquisitions).

Question 10

Examples of Internationalization Activities:

Answer 10

• Importing cars from overseas markets.
  
  • Establishing manufacturing plants in foreign countries.
  • Forming joint ventures with local companies.
  • Acquiring foreign competitors.

Question 11

Primary Motives for Internationalization:

Answer 11

• 1. Exploiting domestic competitive advantages.
     - 2. Creating new competitive advantages.
     - 3. Improving competitive position by influencing competitors’ value creation.

Question 12

Management-Induced Motives:

Answer 12

• Personal: Increasing salary, job security.
  
  • Immaterial: Desire for self-fulfillment, prestige, power.

Question 13

Common Reasons for Expanding Internationally (Surveys):

Answer 13

• Development of new sales markets.
  
  • Development of low-cost purchasing markets.

Question 14

Additional Motives for Internationalization:

Answer 14

• Exploiting domestic competitive advantages abroad.
  
  • Creating new competitive advantages.
  • Improving competitive position by influencing competitors’ value creation negatively.

Question 15

Market Entry Strategies:

Answer 15

• Definition: Organizational paths chosen by companies when entering foreign markets.
  
  • Importance: Determines how products/services are introduced into foreign markets and impacts success.

Question 16

Dunning’s Eclectic Theory:

Answer 16

• Components: Ownership-specific advantages, location-specific advantages, internalization incentive advantages.
  
  • Explanation: Determines a company’s international market entry strategies based on these factors.

Question 17

Components of Dunning’s Eclectic Theory:

Answer 17

• 1. Ownership-specific advantages.
     - 2. Location-specific advantages.
     - 3. Internalization incentive advantages.

Question 18

Advantages of Internalization:

Answer 18

• Avoiding search and negotiation costs.
  
  • Protecting reputation.
• Ensuring product quality.
• Avoiding contract-related problems.

Question 19

Export:

Answer 19

• Definition: Goods or services sold abroad.
  
  • Types: Direct (delivered directly to foreign customers/intermediaries) and indirect (supplied to domestic intermediaries for market development abroad).

Question 20

Conditions Suitable for Exports:

Answer 20

• Low foreign demand, monopolistic market position, difficulties raising capital, political/legal constraints in target country.

Question 21

Advantages of Direct Exports:

Answer 21

• Minimize foreign market risks, require limited foreign market knowledge, advantageous for first-time market entry.

Question 22

Disadvantages of Direct Exports:

Answer 22

• Additional costs, increased need for expertise, higher capital commitment and foreign-specific risks.

Question 22

Advantages of Indirect Exports:

Answer 22

• Require less commitment, suitable for small companies.

Question 23

Disadvantages of Indirect Exports:

Answer 23

• Lack of contact with foreign markets/customers, limited development of internationalization strategies.

Question 24

Direct Investments:

Answer 24

• Definition: Cross-border investments influencing business activities of existing/newly-established companies. - Significance: Shift from international trade to local production, sustainable internationalization strategy.

Question 25

Joint Ventures

Answer 25

• Definition: Cooperative arrangements between companies pursuing specific business objectives.
  
  • Types: Equity joint ventures (establish independent company) and contractual joint ventures (cooperation without independent entity).

Question 26

Merger:

Answer 26

• Definition: Economic and legal combination of two companies into one entity.
  
  • Types: Merger through absorption (one company loses legal independence) and merger by consolidation (both companies maintain legal independence).

Question 27

Acquisition:

Answer 27

• Definition: One company takes over ownership rights of another without necessarily merging into one legal entity.
  
  • Difference from merger: Acquiring company gains control without target company losing legal personality.

Question 28

Types of Company Acquisitions:

Answer 28

• Horizontal: Similar industries, resource allocation.
  
  • Vertical: Supplier-customer relationship, service depth, transaction cost reduction.
  • Concentric: Unrelated product ranges, technical/marketing similarities.
  • Conglomerate: Different industries, diversification.

Question 29

Significance of Conglomerate Acquisitions (Late 1980s):

Answer 29

• Popular for diversification strategies, spreading risk, and expanding business interests.

Question 30

Corporate Cooperations:

Answer 30

• Definition: Mergers maintaining legal/economic independence with restrictions imposed in certain areas.
  
  • Difference from mergers: Independence of participating companies maintained.

Question 31

Forms of Corporate Cooperation:

Answer 31

• Strategic alliances: Based on capital-related or contractual cooperation elements.
  
  • Contractual joint ventures: Involving agreements under the law of obligations.

Question 32

Reasons for Forming Strategic Alliances:

Answer 32

• Improved access to difficult markets.
  
  • Enhanced capabilities through innovation.
  • Financial benefits (economies of scale, reduced costs).
  • Improved delivery capability.