a. General analysis (i.e. identification) of factors firms should focus on when deciding whether to internationalise their business via joint ventures, Greenfield sites or acquisitions: (20-30% of marks) b. Identify appropriate analytical framework to use when presenting these factors (and justify). (20-30% of marks) c. Utilise this framework to analyse Elecdyne's situation for a UK location, comparing at least two different possible ways (joint ventures, Greenfield sites or acquisitions) to internationalise (20-30% of marks) d. and at least two different possible locations in the UK for Elecdyne's activities. (20-30% of marks)
In economics, internationalization has been viewed as a process of increasing involvement of enterprises in international markets, although there is no agreed definition of internationalization or international entrepreneurship.
The internationalisation of the firm has continued to be one of the focal topics in international business literature. The latest discussions have concluded that internationalisation is essentially an evolutionary process, although not necessarily an incremental or a progressive one (e.g. Jones & Coviello, 2005; Lamb & Liesch, 2002; Madsen & Servais, 1997). Researchers have also shown that the internationalisation path of a firm is likely to interact with the evolution of industry (Andersson, 2004), and to be dependent on business network relationships (e.g. Johanson & Mattsson, 1988; Majkgård & Sharma, 1998; Sharma & Blomstermo, 2003) and organisational resources and capabilities (e.g. Andersen & Kheam, 1998; Sapienza, Autio, George & Zahra, 2006). Further, to make it possible for us to address the complexity of factors and processes interacting over time, several scholars have argued that internationalisation should be examined holistically with the help of longitudinal case studies (Coviello & Jones, 2004; Liesch, Welch, Welch, McGaughey, Petersen & Lamb, 2002; Meyer & Gelbuda, 2006).
When an organisation has made a decision to enter an overseas market, there are a variety of options open to it. These options vary with cost, risk and the degree of control which can be exercised over them. The simplest form of entry strategy is exporting using either a direct or indirect method such as an agent, in the case of the former, or countertrade, in the case of the latter. More complex forms include truly global operations which may involve joint ventures, or export processing zones. Having decided on the form of export strategy, decisions have to be made on the specific channels. Many agricultural products of a raw or commodity nature use agents, distributors or involve Government, whereas processed materials, whilst not excluding these, rely more heavily on more sophisticated forms of access. These will be expanded on later.
An organisation wishing to "go international" faces three major issues:
i) Marketing - which countries, which segments, how to manage and implement marketing effort, how to enter - with intermediaries or directly, with what information? ii) Sourcing - whether to obtain products, make or buy?
iii) Investment and control - joint venture, global partner, acquisition?
Decisions in the marketing area focus on the value chain (see figure 7.1). The strategy or entry alternatives must ensure that the necessary value chain activities are performed and integrated. Figure 7.1 The value chain -marketing function detail
In making international marketing decisions on the marketing mix more attention to detail is required than in domestic marketing. Table 7.1 lists the detail required1. Table 7.1 Examples of elements included in the export marketing mix 1. Product support
- Product sourcing
- Match existing products to markets - air, sea, rail, road, freight - New products
- Product management
- Product testing
- Manufacturing specifications