Family Business

Topics: International trade, Target market, Business Pages: 31 (8954 words) Published: October 18, 2011
Bachelor Thesis Organization & Strategy
Entrepreneurship The Internationalization of Family Businesses By

Bart van Overbeek 910523

University of Tilburg
BSc International Business Adminstration (former Business Studies) April 2010

Bart van Overbeek

Preface

This thesis presents the results from research conducted during February to June 2010. In February 2010, I, Bart van Overbeek, started conducting research on the topic of expanding to international markets by family-owned businesses. This study was conducted for the Department Organization and Strategy of the University of Tilburg. During the research period, some interesting and some unfavorable outputs came to the light, that will be presented throughout this thesis. At first, I would like to express my sincere gratitude towards my supervisor Stijn van den Hoogen. Without his advise and feedback, this thesis would not have come to clarity and completion. Furthermore, I would like to thank my fellow thesis writers for their efforts in giving feedback and for their quality of feedback. Also, I would like to thank my father, Roel van Overbeek, for giving me the idea to write this thesis about. Thanks to him, I was able to formulate my propositions into a clear topic and concept. Tilburg, June 2010

Bart van Overbeek

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Bart van Overbeek

Management summary
This bachelor thesis focused on internationally expanding by family firms. Family-owned businesses are unique of nature and in this thesis these kinds of businesses have been defined as firms that are managed and controlled by at least two members of the family, seeking sustainability of the firm and where family members seek increasing involvement within the firm. Family firms, in their business operations, cope with the family segment, which, due to emotionality and complexity of firm and family issues, negatively affects the operations. However, family businesses outperform their counterparts in terms of sales and profits. This can be explained by their unique “family language” and their overall high levels of trust. When family firms want to expand to international markets, they have to take into account that there are numerous factors affecting this process. Family firms tend to be more conservative towards international expansion and they can even be viewed as risk-adverse in such cases. They focus too strong on their domestic markets which limits the internationalization. Surely the government aids in the internationalization, but family firms strengthen this process themselves by listening to the market demand. Successful successions in family-owned businesses mostly aid in the process of internationalization by providing ambitious ideas and strategies. Internationalization is one of the most difficult strategies a company can undertake. In order for a company to consider international expansion, the costs, such as exchange-rate fluctuations, should be outweighed by the benefits, such as knowledge increase. Family firms should follow a certain pattern before internationalizing. They have to draw up a plan that involves all aspects of the operations, the target markets, the time pattern and the sales objects. Family firms and its managers ought to know that the greater the distance between their domestic markets and a foreign target market is, the smaller the level of knowledge is. When entering foreign markets, three main entry strategies can be used, namely export entry, contractual entry and investment entry. Export entry can be either with the use of intermediary agents (indirect) or the company goes directly to the customer (direct). While export entry is the most used entry strategy, for every company another “ideal” strategy is needed, because this strategy will affect the business operations for a future period of time.

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Bart van Overbeek

Table of Contents
1 Introduction...

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