Download 301LON U9K1

Entering and Operating in
International Markets
International Business
Strategy
LON301BUS
Unit: 9 Knowledgecast: 1
Module Learning Outcomes
• Integrate and apply strategic approaches to practical
situations in various types of organisations
• Assess current developments in the organisational
environment and alternative responses related to
strategy
• Resolve management problems in the area of strategic
management by evaluating alternative outcomes
Internationalisation of the Firm
• Diverse motives for pursuing
internationalisation
• Characteristics of firm internationalisation
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Push and pull factors
Accidental involvement
Balancing risk and return
Learning experience
Evolution
Typical Stages in Firm
Internationalisation
Stages of Internationalisation
Critical Management Activity
Domestic market focus
Focus on home market
Preinternationalisation stage
Research and evaluate the feasibility of
undertaking international business
activity
Experimental involvement
Initiate limited international business
activity, typically exporting
Active involvement
Explore international expansion,
including entry strategies other than
exporting
Committed involvement
Allocate resources based on intl
opportunities
Exporting
“The strategy of producing products or
services in one country (often the
producer’s home country) and selling
and distributing them to customers
located in other countries.”
(Cavusgil 2007:382)
Exporting Analysis
• Advantages
• Disadvantages
 Growth (sales, profit etc)
 Economies of scale
 Diversification of customer
base
 Stabilise fluctuations in sales
 Lower cost foreign market
entry
 Leverage overseas
capabilities
 Less opportunity for learning
 Unable to identify
opportunities and threats
from afar
 Develop new capabilities
 Allocate resources
 Sensitivity to trade barriers
and x-rates
Countertrade
“An international business transaction where all
or partial payments are made in kind rather
than cash.”
(Cavusgil et al, 2007:382)
Types of Countertrade
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Barter
Compensation deals
Counterpurchase
Buy-back agreement
Knowledgecast Summary
• Integrate and apply strategic approaches to practical situations in
various types of organisations
 There are a variety of market entry strategies available to businesses who
seek to internationalise.
• Assess current developments in the organisational environment
and alternative responses related to strategy
 Export is opening up emerging markets, previously closed to
foreign firms.
• Resolve management problems in the area of strategic
management by evaluating alternative outcomes
 Businesses who seek to internationalise for growth may consider
the range of market entry strategies available to them.
Seminar
Managerial Challenge
The task of choosing the best export market is complex. Discuss the
following questions in your seminar and consider the strategy
undertaken by your case study organisation (or other as selected by
your Module Tutor).
i) What makes an ideal market?
ii) What market potential indicators should a manager consider?
iii) What are the challenges of taking an ‘indicator led’ approach?
Group Activity
End of Module Assessment – Evaluating Strategy (Management
Brief) (Unit 10)
Preparation – Preparing the Final Draft
This session will provide you with the opportunity to discuss your final draft
with your module tutor and ensure all your questions are answered as you
finalise your submission.
Although this is an independent piece of work giving and receiving feedback
from your peers is an essential skill, which will be of great value in the
workplace.
Be prepared to provide constructive feedback on other’s work and receive
feedback which can inform your progress.