THARAKA DIASMBA(USA), BBA(USA), Dip in Mgt, ACIM(UK), FAEA(Dip in AEA-UK),

FinstSMM(UK), CPM(Asia), MSLIM, PM(Sri-Lanka)

List and describe the five reasons why firms internationalize.

Differentiate between born-global firms and other companies.

Explain the difference between a standalone attractive market and a globally strategic one.

Cite the advantages and disadvantages of targeting developed countries, developing countries, or transitional economies.

List and describe the filters used for screening national markets.

Explain the pros and cons of choosing markets on the basis of market similarity.

Internationalizing marketing operations Geographic market choices Country selection

Internationalization = a firm’s expansion from its domestic market to foreign

markets

Opportunistic expansion Pursuing potential abroad Following customers abroad

Exploiting different market growth rates Globalizing for defensive reasons

Firms that recognize from inception that their markets are global

Especially true of high-tech start-ups Small percentage of firms

Firms are internationalizing more quickly than in the past

But it takes TIME and MONEY Starbucks expanded internationally in 1996 –

first profit 2004; 1650 international stores = only 7% of revenue!

Factors Market and target segment(s) size Growth rate Strength of competition Market share potential Government incentives▪ Low taxes

▪ Incentives

Current and future battlegrounds where global competitors engage each other

May not necessarily be attractive as a stand alone market but strategically important

Vary by industry Major R&D Sites Have demanding customers who push for

quality and innovation Examples:

Plastics = Japan Italy = Textiles, Clothing France = Wine

Latin America, Africa, the Middle East and parts of Asia

Trade and investment liberalization Market growth may be higher Middle class growth Remittances enhance buying power Competition may be less intense

Political risk Economic risk – Big ups and downs;

volatility Some trade and investment restrictions

remain Middle class may still be small –

Predominated by small elite and large impoverished classes

Which particular country markets should a firm enter?

Each additional country demands More financial investment More management time and effort

Size of country, in terms of geographic area

Climatic conditions Topographical characteristics

Total population Population growth rate Age distribution of the population Degree of population density

Total gross national product Per-capita income (also income growth

rate) Personal or household disposable income Income distribution

Political conditions Competition Market similarity

The less the psychic distance the lower the risk

But similarities can be overestimated▪ Canadian retailers in the USA

Global product category strategy Global segment strategy Global marketing mix strategies

Fully integrated Partially integrated

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