- challenges of internationalising
TRANSCRIPT
Causes
Liabilities of smallness
Centralized decision making
process
Liabilities of foreignness
Lower quality
No R&D
investments
Symptoms
NO differentiation
in revenueresources
Sensitive to fluctuations
in advertising budgets
Negative results
Failure of products
Lack of Competitive Advantage
DecreasingDemand & Increasingthreats of
competitors
Challenges
Dispersion of resources
Greater control and coordination needed
Difficulties attracting international players
Opportunity cost of internalizing
Option 3 – Strategic Alliances
“If you think you can go it alone in today’s global economy, you are highly mistaken.”
- Jack Welch, CEO of General Electric
Why?
Innovative, Quality
Products
Meeting Markets’ Needs
Sustainable Competitive Advantage
Internationalization as an outcome of strategic alliances
(Freeman et al., 2010)
Partner Selection Process
Assess internal & external capabilities
Determine which products should be outsourced & internalized
Identify the right partners
Form alliances with partners
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References
Freeman, S., Hutchings, K., Lazaris, M., & Zyngier, S. (2010). A model of rapid knowledge development: The smaller born-global firm. International Business Review, 19(1), 70-84.
Gottfredson, M., Puryear, R., & Phillips, S. (2005). Strategic sourcing. Harvard Business Review, 83(2), 132-139.
Quélin, B., & Duhamel, F. (2003). Bringing together strategic outsourcing and corporate strategy:: Outsourcing motives and risks. European management journal, 21(5), 647-661.