International Business Strategy LON301BUS Entering and Operating in International Markets Unit: 9 Knowledgecast: 1

Integrate and apply strategic approaches to practical situations in various types of organisations Assess current developments in the organisational environment and alternative responses related to strategy Resolve management problems in the area of strategic management by evaluating alternative outcomes Module Learning Outcomes

Internationalisation of the Firm Diverse motives for pursuing internationalisation Characteristics of firm internationalisation  Push and pull factors  Accidental involvement  Balancing risk and return  Learning experience  Evolution

Typical Stages in Firm Internationalisation Stages of InternationalisationCritical Management Activity Domestic market focusFocus on home market Preinternationalisation stageResearch and evaluate the feasibility of undertaking international business activity Experimental involvementInitiate limited international business activity, typically exporting Active involvementExplore international expansion, including entry strategies other than exporting Committed involvementAllocate resources based on intl opportunities

Exporting “The strategy of producing products or services in one country (often the producer’s home country) and selling and distributing them to customers located in other countries.” (Cavusgil 2007:382)

Exporting Analysis Advantages  Growth (sales, profit etc)  Economies of scale  Diversification of customer base  Stabilise fluctuations in sales  Lower cost foreign market entry  Leverage overseas capabilities Disadvantages  Less opportunity for learning  Unable to identify opportunities and threats from afar  Develop new capabilities  Allocate resources  Sensitivity to trade barriers and x-rates

Countertrade “An international business transaction where all or partial payments are made in kind rather than cash.” (Cavusgil et al, 2007:382)

Types of Countertrade Barter Compensation deals Counterpurchase Buy-back agreement

Integrate and apply strategic approaches to practical situations in various types of organisations  There are a variety of market entry strategies available to businesses who seek to internationalise. Assess current developments in the organisational environment and alternative responses related to strategy  Export is opening up emerging markets, previously closed to foreign firms. Resolve management problems in the area of strategic management by evaluating alternative outcomes  Businesses who seek to internationalise for growth may consider the range of market entry strategies available to them. Knowledgecast Summary

Managerial Challenge The task of choosing the best export market is complex. Discuss the following questions in your seminar and consider the strategy undertaken by your case study organisation (or other as selected by your Module Tutor). i)What makes an ideal market? ii)What market potential indicators should a manager consider? iii)What are the challenges of taking an ‘indicator led’ approach? Seminar

End of Module Assessment – Evaluating Strategy (Management Brief) (Unit 10) Preparation – Preparing the Final Draft This session will provide you with the opportunity to discuss your final draft with your module tutor and ensure all your questions are answered as you finalise your submission. Although this is an independent piece of work giving and receiving feedback from your peers is an essential skill, which will be of great value in the workplace. Be prepared to provide constructive feedback on other’s work and receive feedback which can inform your progress. Group Activity