entering and operating in international markets
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International Business Strategy LON301BUS. Entering and Operating in International Markets. Unit: 9 Knowledgecast: 1. Module Learning Outcomes. Integrate and apply strategic approaches to practical situations in various types of organisations - PowerPoint PPT PresentationTRANSCRIPT
International Business Strategy
LON301BUS
Entering and Operating in International Markets
Unit: 9 Knowledgecast: 1
• 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
Module Learning Outcomes
Internationalisation of the Firm
• Diverse motives for pursuing internationalisation
• Characteristics of firm internationalisation 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 Growth (sales, profit etc) Economies of scale Diversification of customer
base Stabilise fluctuations in sales Lower cost foreign market
entry Leverage overseas
capabilities
• Disadvantages 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
• Barter• Compensation deals• Counterpurchase• Buy-back agreement
• 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.
Knowledgecast Summary
Managerial Challenge
The task of choosing the best export market is complex. Discuss thefollowing questions in your seminar and consider the strategyundertaken by your case study organisation (or other as selected byyour 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?
Seminar
End of Module Assessment – Evaluating Strategy (ManagementBrief) (Unit 10)
Preparation – Preparing the Final Draft
This session will provide you with the opportunity to discuss your final draftwith your module tutor and ensure all your questions are answered as youfinalise your submission.Although this is an independent piece of work giving and receiving feedbackfrom your peers is an essential skill, which will be of great value in theworkplace.Be prepared to provide constructive feedback on other’s work and receivefeedback which can inform your progress.
Group Activity