International Marketing

03/03/2022

2nd class

Kippling case study

Availability of the resources where the company is matters in order for the company to
grow. A company can only grow the size of the market where it is, which is why
internazionalitation is an option for small markets.

Without internationalization, companies are limited to the resources of that specific

market.

Internationalization to survive: companies are bounded to the size of the market

they’re in. by going international, the market of the company becomes bigger.

Two major factors to be considered: survival and growth.

Companies can go international either late or early.
They can be only importers, do importation and exportation (predominance of export)
or not being international at all.
When international and late, when starting to import, they survived longer and grew in
a slower pace. They became stronger in the domestic market, gained knowledge and
created brand awareness

Companies that go international early

Companies that internationalize late, became established/exploited domestic markets
before they went abroad and exploited other markets. Value creations, sales.

Companies can be labeled as immature: no experience

Adolescence: some knowledge

Predominantly global:
Potentially global: when companies are mature, they try to find niche markets.
Considering expansion to other markets is also an option.
Entirely global: if immature, the company would be bought out. If adolescent, the
alternative is to create alliances and seek resources to go international. If mature, the
company should strengthen its global position by entering new sectors.

Some companies are able to identify they reached their maximum in the market
they’re in. from this, companies reinvent themselves and identify other markets with
new opportunities.

Internationalization of the firm: an incremental approach.

Gradual approach, incremental approach.
Whats the path and the pattern that companies follow when going international?EX:
Volvo went international when it consolidated its position in the domestic market.
Then, they entered the foreign market:
1. entered a close foreign market that represented a lower risk. Norway. Started
only by exporting to the closest geographical market. Not committing the
resources they had. Meant for companies that want to first exploit one market
and move to another one without compromising.
The time frame for companies to be considered between early or late is 6 years. Its not
a mandatory benchmark but that’s the amount of time the academy thinks companies
need to exploit the domestic market and survive.

There’s increasing market commitment by incremental step-by-step resource

compromise.

Cultural distance is not the same as geographical distance.

TCA model. Uppsala model: in the process of going international, companies need to
deal with transaction costs. Every process of internatiponalization involves transaction:
search costs, contracting costs. What every company tries is to diminish costs.
Companies very pften try to control those costs by entering the foreign market in the
most compromised form: by opening subsidiaries to avoid friction and opportunism
with other possible partner companies. They do that bc the transaction costs are
minimized.

Dunnings eclectic approach: when companies observe that they can benefit from being
owners and have a base on a certain market, they observe several advantages known
as OLI advantages:
If they observe that they can internalize knowledges, have ownership
advantages and location advantages. Intellectual property. Benefit from being owners
bc they have a higher control level over that location.

Internationalization as a process: born global and international new ventures.

Born global can be considered a company that can go international within the first 3
year. International new ventures enter foreign markets between the 3 rd and 6th year.
Born global have an international oriented mindset
Born global companies care less regarding the physical path between geographically
distant countries.
Born global doesn’t speak about gradual increase of level of commitment.
Enter domestic and international markets without a high time breach.

Increased experience, high level of knowledge of the industry.

Either the company responds to the needs of the consumers in every market or they
wont. Some companies decide to be multidomestic by descentralizing to address
many customer needs in a fashionable time. Ex: mcdonalds.
Some products need to be adapted and some don’t. if possible and products allow,
customers like to be approached with the products technology advances allows that,
companies have to take into consideration how to approach the customers while being
globally integrated.

For internationalization, managers need to have a broad knowledge to take into

consideration and understand several factors. Managerial mindset.

Model of internationalization patterns, antecedents and outcomes: when going

international, antecedents are at. 3 different levels:
-manager: companies mirrors the behavior of its managers. We need to undertand
their mindset, experience, knowledge to understand who we have in front of us.
Entrepreneurial spirit.
Firm level: firm is categorized and bounded by its resources, knowledge, capabilities,
technology advantages, etc. network links need to match with the company’s strategic
goals. If that network has any international potential or links, it would help the
company to go international. If networks are purely domestic, it would add zero value
for the company when planning to go abroad.
-Environmental needs: current situation affects how much companies will invest and
commit when going international. Different antecedents cause decisions to be adapted
all the time.

Outcomes: performance of the company is the main goal. Financial and growth
performance.

No company and no manager will ever tell that the goal is to go international. The goal
is to improve business performace.

Experience and intuition sometimes help managers to take decisions of

internationalization rather than rational decisions.

As companies passes, companies are gradually grow in

Born global approach: from the beginning, internationalization is accelerated from the
beginning and then slows down.

GRAPH EXPLANATION OF V MODEL AND BORN GLOBAL.

Industry, resources availability, knowledge for a manager to decide to enter new

markets. Seize opportunities based on capacities, the firm and knowledge.

Exam: set of companies and ask questions about their internationalization process.
Questions about parameters such as sales, growth and which path they followed.
International market selection
Selecting the right matket is challenging. The market is a determinant of success.
Markets need to be understood from an umbrella perspective.

Process of selecting a market:

1. based on intuition and experience, managers try to narrow down possible
markets-to-enter options.
2. D
3. When evaluation of options ends, they go international.

As time passes, the process of international market selection becomes faster due to
repetition and process familiarity.

Psychic vs cultural distance?

Size vs. distance. Certain distances can be considered stable and unstable.

How to build a model for market selection

The group of variables is hard to be assessed as it is. A platform developed by CGD in
Portugal gives you the opportunity to assess these variables seamingly IAPEX, first
step for market selection.

Building a model for IMS: last slide. Things to take into consideration.

Lecture 5