firme in teng

8/10/2019 Firme in Teng

1/14

INTERNATIONAL

MANAGEMENT

Theinternationalization

strategy of the firms


2/14

1. The stages of an internationalization strategic

analysis:

- the investigation of the internationalenvironment

- the diagnosis of the firm

- internationalization factors

2. The analysis of the strategic alternatives for

internationalization:

- the forms of international involvement

- the ways of adapting to the international market

- the segmentation of the international markets

3. The internationalization strategy of the firm:

- instruments for taking the decision

- the evolution of the internationalization

configurations


3/14

DETERMINING AN INTERNATIONALIZATION

STRATEGY

Step 1: The analysis of the external factors and companyspotential:THE STATE AND EVOLUTION

OF THE INTERNATIONAL

ENVIRONMENT

(Opportunities and Threats)

THE DIAGNOSIS OF THE

COMPANY

(Strengths and weaknesses)

Looking for relevant information

-The analysis of the needs and

the real demand

-The analysis of the competitors

-Determining the entry barriers

to the market

-Evaluating the countrys risk

-The firms aspirations

-The available resources (surplus or

usable capacities)

- Specific advantages regarding:

- products

- markets

- technologies

- science (know-how)

The typology of the foreign

markets;Degrees of attractiveness

The competence profile of the

company


4/14

Step 2: Determining the international

objectives of the company

-The turnover that should be achieved: the market sectors (divisions)

internationally aimed

- The targeted development rate- The profitability (internal rate of return) of the invested capital.

Step 3: The analysis of the

strategic alternatives

- Direct or indirect export

- FDI (Foreign Direct Investment)

- Strategic alliances and forms of cooperation.

Steps 4-6: The implementation of the

internationalization program

Budget Execution Control


5/14

1. THE STAGES (STEPS) OF

AN

INTERNATIONALIZATION

STRATEGIC ANALYSIS


6/14

1.1 The international environmentinvestigation

A. The essential elements that shouldbe detected:- The needs and the real demand- The competition and the sectors withstate monopoly

- The entry barriers on the market- The political instability and the riskof the country- The existent technological level.

B. The dif f iculties of catching relevant

information:-The variety and the high number ofthe international environmentcomponents- The dynamics of these components- The quality of the information: ishigh dependent on the personal

presence in the aimed country.


7/14


8/14

1.3. Factors of internationalization:

A. Environment factors:

facility of entry to the market

favorable evolution of the market (demand)

moderate political risk

good circumstances of working

the quality of reception

the existence of a freetrade area

the quality of the local resources

the monetary parities.

B. Companys strategic reasons:

surplus productive capacity, low local demand or

saturated internal market

growing credibility of the firm

possibility of external growth

facilitating economies of scale

the prolongation of the products life.


9/14

2. THE ANALYSIS OF THEINTERNATIONALIZATION

STRATEGIC

ALTERNATIVES(OPTIONS)


10/14

2.1. The forms of international involvement

- The strategy of direct or indirect export

- FDI (Foreign Direct Investment)- The cooperation

2.2. The ways of adapting to the international

markets

- Standardization (Normalization)

- Selective Adaptation

- Differentiation

2.3. The division of the international markets

The division criterions used in international trade:

- social and economical variables

- cultural factors

- geographical and geopolitical variables

- behavioral variables.


11/14

3. THE DECISION OF THE

INTERNATIONALIZATION OF

THE COMPANY


12/14

3.1. Instruments for taking the decision

A. Evaluation instrumentsVariables Weight Countries

I II III IV V

I. Environment main factors

Acceptable (A) or Unacceptable

(U):

1. Observing the propriety rights

2. The opening of the market

/

/

U

A

A

A

A

A

A

A

A

A

II. The profitability of the

operation(high numbers = favorable rank)

1. The invested capital

2. Direct costs

3. The turnover tax

4. The present dimension of the

market

5. The dimension of the market (310 years)

6. The market division:

- potential (0-2 years)

- future (3 years)

0-5

0-3

0-2

0-4

0-3

0-2

0-2

/

/

/

/

/

/

/

4

3

2

3

2

2

2

3

1

1

2

1

1

1

3

2

2

4

3

2

2

3

2

2

1

1

1

0

TOTAL / 18 10 18 10

III. Risk

(low numbers = favorable rank)

1. Losses in the market division

2. International trade problems

3. Political instability

4. Legislation and regulations

5. Perspectives of regulation (3

10 years).

0-4

0-3

0-3

0-4

0-2

/

/

/

/

/

2

0

0

1

0

1

0

1

0

1

3

3

2

4

2

2

3

3

3

2

TOTAL / 3 3 14 13


13/14


14/14

3.2. The evolution of the internationalization

configurations:

Step I - Direct or indirect export

Step II - Workshops or join-ventures

Step III - Local premises and researchlaboratories

Step IV - Re-concentration and local

extension.

firme in teng

Documents