Business
Internationalisation
Internationalisation refers to the process of expanding business operations beyond domestic borders to operate in international markets. This typically involves adapting products, services, and operations to suit the needs and preferences of diverse global customers. Internationalisation can also involve establishing partnerships, subsidiaries, or branches in foreign countries to facilitate market entry and growth.
Written by Perlego with AI-assistance
Related key terms
1 of 5
9 Key excerpts on "Internationalisation"
eBook - PDF- Joao Heitor De Avila Santos(Author)
- 2019(Publication Date)
- Society Publishing(Publisher)
International business relates to the trade and investment businesses done by entities across countrywide borders. Firms may put together, acquire, produce, market, and perform other value-addition-operations on international size and range. Business organizations could also take part in collaborations with other businesses from different countries (Schumpeter, 1912). Apart from specific business bodies, government authorities and international bodies may also try international business ventures. Companies and countries may exchange different kinds of physical and intellectual possessions. This property can be products, services, capital, technology, knowledge, or labor. 1.1.1 Internationalization of Business Let’s make an effort to explore why a business wishes to go global. It’s important to note that we now have many issues to consider in internationalization, but we’ll give attention to the positive features of the procedure for the time being. Major explanations why a business may choose to go global: • First-mover Benefits: It identifies getting into a fresh market and revels in the features of being first. It is not hard to quickly start conducting business and gets early on adopters when you are first. • Opportunity for Progress: Prospect of growth is an extremely common reason for internationalization. The market may saturate the home country of a business and for that reason, the business may consider discovering new markets (Orati & Dahiya, 2001). • Small Local Marketplaces: Start-ups in Finland and Nordics have always viewed internationalization as a significant strategy Introduction to International Business 3 from the start because their local market is small. • The Increase of Customers: If customers are an issue, it may strike a company’s prospect of growth. When this happens, companies may look for internationalization.
eBook - PDFInternational Entrepreneurship
Theoretical Foundations and Practices
- A. Zucchella, Paolo Scabini(Authors)
- 2007(Publication Date)
- Palgrave Macmillan(Publisher)
2 International Business Studies Both entrepreneurship and international business are fields of research that have seen an increasing number of studies during the last decade (McDougall and Oviatt, 1997, 2000; Zahra and Garvis, 2000). Entrepreneurship and international business are strictly interrelated because entering and venturing into foreign markets are viewed as entrepreneurial activities for the firm (Ibeh and Young, 2001; Lumpkin and Dess, 1996; Zahra and George, 2002). The Internationalization phenomenon has been studied for a long time and a series of meanings and definitions have been attrib- uted. In general, internationalization is the growth of the firm out of its national boundaries and more precisely it is concerned with growth and development in foreign markets. This phenomenon does not imply only the normal business activities of an enterprise abroad or, on the other hand, the influence that a firm has to main- tain in its environment regarding that of being a foreign firm’s busi- ness; but also a partial mitigation of cultural differences. From an enterprise point of view, it means a growing standardization of product characteristics and operational procedures which leads managers all over the world to run their business in an increasingly similar way. In this context internationalization theories were introduced before the development of International Entrepreneurship as an academic field of research. This theoretical background is important for several reasons including the fact that it provides a frame of reference in understanding the evolutionary aspects of International Entrepreneurship, and thus gives an explanation of its emergence; it 28 is also relevant in checking the applicability of these theories to new international business phenomena.
eBook - ePub- Tom Craig, David Campbell(Authors)
- 2012(Publication Date)
- Routledge(Publisher)
subject to tariff charges or other restrictions. Payment of taxes to a host government by the importer has obvious implications for pricing whilst some goods are subject to limitations on the quantities imported. Such protectionist measures mean that exporters have many more factors to consider in exporting than if they were to restrict their activities to domestic business only.- The number of foreign interests that an exporter has means that the company must be aware of the business environments of more countries than just its own. Changes in the internal environment of a country with which the organisation does business can affect the performance of the company. An exporter has an interest in the political, economical and sociological environments of all of the countries it exports to. This significantly complicates the operation of an exporter’s business (although this can said to be a drawback of most entry strategies – not just exporting).
International Licensing and Franchising
Licensing and franchising across international borders, whilst being different in approach, both offer the same benefit: the gaining of international coverage and income with no direct investment.When we examined the concept of franchise in Chapter 5 , we saw that it was a way that a business with a transferable business idea can expand by renting the right to use the idea to a franchisee. Expansion by franchise is thus an expansion option which offers the franchisor the opportunity to gain income at little or no extra investment or risk to himself. Since moving to foreign markets inevitably contains an element of risk which may not be so marked if expansion were to be restricted to the domestic market, some companies have opted for international franchising as a means of Internationalisation. Franchising is a strategy that has been widely employed by some famous global brands such as KFC and McDonalds
eBook - ePub- Robert H. Scarlett, Lawrence E. Koslow, J.D., Ph.D.(Authors)
- 2009(Publication Date)
- Routledge(Publisher)
Overview
DOI: 10.4324/9780080507415-1In this first section we will examine some of the preliminary questions that need to be answered before a company can decide if, when, and how to enter or expand in international markets. Also included will be discussions on how to prepare for the initial overseas trips, how to determine when you should go, and how to provide for your safety and comfort.Additional tips will discuss how to set up country files and how to organize for effective international expansion. After reviewing this section, you should be in a position to determine whether you are ready to address the more specific issues of international expansion.1 Understanding International Business
What is international business? What does it mean to go international? A company begins the international process by first becoming aware of the influences of international activities on its present and future business. This includes an analysis of the makeup of its products and services, an understanding of its capabilities, an analysis of its existing marketplace, a view of where its industry is going, and finally, an understanding of what the competitors are doing, or are likely to do, in the near future. This takes place both internally and externally.Internal Internationalization
From a practical point of view, a company can become involved in international business without ever exporting from its home market. Just think of the mass retailers and grocery chains who import from all over the globe. Examples of internal internationalization are:- Importing
- Sourcing or obtaining foreign components or labor
- Representing a foreign business in your home market
- Licensing foreign technology
- Providing services to foreign companies
External Internationalization
Once you begin to market your products and services abroad, you now have to consider a wholly different set of variables. There are many ways in which to address the international marketplace. These include the following:
eBook - PDF- Nader H. Asgary, Dina Frutos‐Bencze, Massood V. Samii(Authors)
- 2016(Publication Date)
- Information Age Publishing(Publisher)
Foundations of Global Business, pages 117–125 Copyright © 2016 by Information Age Publishing All rights of reproduction in any form reserved. 117 8 The Internationalization Process of a Firm T his chapter describes the internationalization process as well as how value creation has been enhanced by internationalization. Different modes of entry and internationalization methods are also discussed. Inter- national business is essential in the economic activities of nations. It plays a critical role in the value creation of multinational enterprises. A significant portion of the revenues of multinationals is generated by their foreign ac- tivities. In many cases multinational foreign assets are also significant. The increase in international business in the last decades can be at- tributed to many factors. Some of the factors that have contributed to the changes in the business landscape are the following: ◾ The emergence of new technologies, as well as advances in the information and communications industries, have flattened the playing field especially for small and medium-size companies by providing them easier access to the global market. 118 Foundations of Global Business ◾ The continuous development of emerging markets such as China, India, Russia, Brazil, and other economies have created not only great opportunities for international business activities, but also potentially strong competitors. ◾ Multinational corporations from emerging economies have be- come global players and are competing with multinationals from developed countries. Companies internationalize for different reasons. International business and commerce, for example, provide a great potential for value creation. Al- though there is no agreement on the definition of internationalization, there are several internationalization theories that try to explain why there are in- ternational activities. A group of internationalization theories can be classi- fied as trade based theories.
eBook - PDF- Gordon Boyce, Simon Ville(Authors)
- 2017(Publication Date)
- Red Globe Press(Publisher)
International business comes in many forms including exporting, con-tracting the services of a foreign company, and operating as a multinational enterprise . The multinational enterprise is best understood as a business that controls income-generating resources (including production facilities or sales and marketing outlets) in more than one country. Multinational investment takes the form of either a greenfield site where new facilities are established or an acquisition where the multinational secures control of an existing enter-prise. We can also distinguish between a market-oriented and a supply-oriented chapter 10 International Business 289 290 THE DEVELOPMENT OF MODERN BUSINESS investment depending on whether the firm is seeking new markets or sources of supply. The classic multinational expands its activities from its ‘home’ country of origin into ‘host’ recipient nations. It does so either through setting up a foreign ‘branch’ or incorporating a ‘subsidiary’ in the host nation. The free-standing company operates only, or predominantly, in host nations rather than domestically, but is owned by investors at home. However, in recent decades variations on these standard models have become more common, including the joint venture as a separate enterprise operated in a host nation between foreign companies or in cooperation with a local partner. Firms may also operate internationally through strategic alliances (Chapter 9) and collabo-rative agreements with companies from other nations without having invested outside the home nation. The critical feature of the multinational, in whatever form it takes, is man-agerial control , which is exercised through the ownership of voting stock in the foreign operation. In some cases the parent firm is the sole owner of its sub-sidiary or foreign branch but control of an enterprise can be exercised by partial ownership.
eBook - PDFThe Management of International Enterprises
A Socio-Political View
- M. Tayeb(Author)
- 2000(Publication Date)
- Palgrave Macmillan(Publisher)
Mexico, together with the United States and Canada, is also a member of the NAFT A regional agreement according to which trade barriers between members have disappeared. Exporting, by definition, especially in the case of manufactured prod- ucts, involves those materials which can be physically moved around in Motives and Limits to Intemationalisation 79 good time before they are rendered unusable. Perishable items, such as freshly-made ready-to-serve fast food, are usually more suitable for other forms of Internationalisation, notably franchising and licensing. McDonald's hamburger restaurants and Kentucky Fried Chicken bars are some of the globally well-known examples. However, here also cul- ture and politics playa role. The Bharatiya Janata Party, which came to power in India in 1998 and was still in charge when the present book went to press, has expressed fears that Indian culture may be eroded by foreign investment in food and drinks, and so is determined to curtail future investment in alco- holic and soft drinks, potato crisps, pizza parlours and the like (The Economist, 7 March 1998). In addition, religious beliefs and taboos have to be respected by the franchised outlets if a company is to be allowed entry into a country and accepted by the general public. 'Ham- burgers', for instance, cannot contain ham and other pork products in non-secular Muslim and Jewish countries, 'beefburgers' must be beef- free for Hindus. Foreign direct investment, in the form of both joint ventures and wholly-owned subsidiaries, and indeed the so-called globalisation, has been on the increase in recent decades, building on a trend of wide- and-deep multinationalisation which particularly characterises the twentieth century. A major political force behind a sudden increase in foreign direct investment especially in western Europe by American multinationals in the mid-1940s and 1950s was of course the Marshall Plan.
- Jorma Larimo, Tiia Vissak(Authors)
- 2009(Publication Date)
- Emerald Group Publishing Limited(Publisher)
Luostarinen, 1979 ). As examples of these kinds of companies, researchers have introduced other types of rapidly internationalizing firms as extensions to the classification, such as ‘‘born-again globals’’ ( Bell, McNaughton, & Young, 2001 ) and ‘‘globalizing internationals’’ ( Gabrielsson & Gabrielsson, 2004 ). Our thoughts are quite strongly in line with the arguments of other researchers who have pointed out that, in fact, the internationalization process of INVs is not that different from the process in other firms, particularly when the focus is on the longer term and not just on the time of entry to the first foreign market ( Jones & Coviello, 2005 ; Hashai & Almor, 2004 ; Moen & Servais, 2002 ). The decisive differentiating factor seems to be the managers’ commitment to internationalization: this international growth orientation (see Jantunen, Nummela, Puumalainen, & Saarenketo, 2008 ; Nummela, Puumalainen, & Saarenketo, 2005 ) is either there from the start or it develops incrementally. All in all, internationalization could be described as a time-based entrepreneurial process, which is steered by the strategic decisions companies make in the course of time ( Jones & Coviello, 2005 ). These strategic decisions are discussed next. STRATEGIC DECISIONS MADE BY INTERNATIONAL NEW VENTURES Internationalization is generally understood as an evolutionary process during which a company adapts to the international environment (e.g., Calof & Beamish, 1995 ). The traditional models view this as a step-by-step process with clearly distinguishable separate phases (for a review of process models, see, e.g., Leonidou & Katsikeas, 1996 ). It is possible to identify the different phases by following changes in operational mode, attitudes toward internationalization, information acquisition and transition, and the level of export involvement, for example.
eBook - PDFStrategic Management
Concepts and Cases
- Jeffrey H. Dyer, Paul C. Godfrey, Robert J. Jensen, David J. Bryce(Authors)
- 2021(Publication Date)
- Wiley(Publisher)
Why Firms Expand Internationally 151 on why FDI flows to some countries and not others, common factors include low labor costs, low tax rates, low trade barriers, and favorable exchange rates. 9 This trend toward increased international trade has allowed organizations to place parts of their value chains in different countries, depending on where each part can gen- erate the most value. Manufacturing, as well as service industries, has become global. International trade in commercial services, such as licensing and franchise fees, as well as other types of services such as financial, information, computing, insurance, and con- sulting services have increased 272 percent just in the last decade, totaling more than $4.8 trillion in 2015. 10 What this means for strategy is that both production and the market for many products and services are not national anymore—they are regional (multiple countries) or global. 11 For most industries, the competition is also global and key competitors may be headquartered in another country. Indeed, the World Trade Organization says that half of all the productive wealth in the world is generated by multinational firms that compete with an international strategy. Even for small companies, international strategy is often key to success. Some research shows that 98 percent of U.S. firms that compete across borders are small-to-medium-sized firms. 12 Companies with effective international strategies tend to dominate both at home and throughout the world. Most organizations that hope to be leaders in their industry realize that they have to compete on a global scale. 13 Indeed, for many companies, even basic survival is predicated on a clear understanding of international strategy. Of course, competing on a global stage is not just about protecting oneself from foreign competition. It also opens up tremendous new opportunities, 14 but these new opportunities come with an exponential increase in complexity.
Index pages curate the most relevant extracts from our library of academic textbooks. They’ve been created using an in-house natural language model (NLM), each adding context and meaning to key research topics.
