firme in teng
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INTERNATIONAL
MANAGEMENT
Theinternationalization
strategy of the firms
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1. The stages of an internationalization strategic
analysis:
- the investigation of the internationalenvironment
- the diagnosis of the firm
- internationalization factors
2. The analysis of the strategic alternatives for
internationalization:
- the forms of international involvement
- the ways of adapting to the international market
- the segmentation of the international markets
3. The internationalization strategy of the firm:
- instruments for taking the decision
- the evolution of the internationalization
configurations
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DETERMINING AN INTERNATIONALIZATION
STRATEGY
Step 1: The analysis of the external factors and companyspotential:THE STATE AND EVOLUTION
OF THE INTERNATIONAL
ENVIRONMENT
(Opportunities and Threats)
THE DIAGNOSIS OF THE
COMPANY
(Strengths and weaknesses)
Looking for relevant information
-The analysis of the needs and
the real demand
-The analysis of the competitors
-Determining the entry barriers
to the market
-Evaluating the countrys risk
-The firms aspirations
-The available resources (surplus or
usable capacities)
- Specific advantages regarding:
- products
- markets
- technologies
- science (know-how)
The typology of the foreign
markets;Degrees of attractiveness
The competence profile of the
company
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Step 2: Determining the international
objectives of the company
-The turnover that should be achieved: the market sectors (divisions)
internationally aimed
- The targeted development rate- The profitability (internal rate of return) of the invested capital.
Step 3: The analysis of the
strategic alternatives
- Direct or indirect export
- FDI (Foreign Direct Investment)
- Strategic alliances and forms of cooperation.
Steps 4-6: The implementation of the
internationalization program
Budget Execution Control
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1. THE STAGES (STEPS) OF
AN
INTERNATIONALIZATION
STRATEGIC ANALYSIS
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1.1 The international environmentinvestigation
A. The essential elements that shouldbe detected:- The needs and the real demand- The competition and the sectors withstate monopoly
- The entry barriers on the market- The political instability and the riskof the country- The existent technological level.
B. The dif f iculties of catching relevant
information:-The variety and the high number ofthe international environmentcomponents- The dynamics of these components- The quality of the information: ishigh dependent on the personal
presence in the aimed country.
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1.3. Factors of internationalization:
A. Environment factors:
facility of entry to the market
favorable evolution of the market (demand)
moderate political risk
good circumstances of working
the quality of reception
the existence of a freetrade area
the quality of the local resources
the monetary parities.
B. Companys strategic reasons:
surplus productive capacity, low local demand or
saturated internal market
growing credibility of the firm
possibility of external growth
facilitating economies of scale
the prolongation of the products life.
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2. THE ANALYSIS OF THEINTERNATIONALIZATION
STRATEGIC
ALTERNATIVES(OPTIONS)
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2.1. The forms of international involvement
- The strategy of direct or indirect export
- FDI (Foreign Direct Investment)- The cooperation
2.2. The ways of adapting to the international
markets
- Standardization (Normalization)
- Selective Adaptation
- Differentiation
2.3. The division of the international markets
The division criterions used in international trade:
- social and economical variables
- cultural factors
- geographical and geopolitical variables
- behavioral variables.
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3. THE DECISION OF THE
INTERNATIONALIZATION OF
THE COMPANY
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3.1. Instruments for taking the decision
A. Evaluation instrumentsVariables Weight Countries
I II III IV V
I. Environment main factors
Acceptable (A) or Unacceptable
(U):
1. Observing the propriety rights
2. The opening of the market
/
/
U
A
A
A
A
A
A
A
A
A
II. The profitability of the
operation(high numbers = favorable rank)
1. The invested capital
2. Direct costs
3. The turnover tax
4. The present dimension of the
market
5. The dimension of the market (310 years)
6. The market division:
- potential (0-2 years)
- future (3 years)
0-5
0-3
0-2
0-4
0-3
0-2
0-2
/
/
/
/
/
/
/
4
3
2
3
2
2
2
3
1
1
2
1
1
1
3
2
2
4
3
2
2
3
2
2
1
1
1
0
TOTAL / 18 10 18 10
III. Risk
(low numbers = favorable rank)
1. Losses in the market division
2. International trade problems
3. Political instability
4. Legislation and regulations
5. Perspectives of regulation (3
10 years).
0-4
0-3
0-3
0-4
0-2
/
/
/
/
/
2
0
0
1
0
1
0
1
0
1
3
3
2
4
2
2
3
3
3
2
TOTAL / 3 3 14 13
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3.2. The evolution of the internationalization
configurations:
Step I - Direct or indirect export
Step II - Workshops or join-ventures
Step III - Local premises and researchlaboratories
Step IV - Re-concentration and local
extension.
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