1. STRATEGIES FOR SME INTERNATIONALISATION
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STRATEGIES FOR SME INTERNATIONALISATION
Exporting
International niche marketing
Domestically delivered or developed niche services
Direct marketing including electronic commerce
Participation in the international supply chain

2. KEY MOTIVATORS TO INTERNATIONAL MARKETING
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KEY MOTIVATORS TO INTERNATIONAL MARKETING
Source: Katsikeas (1996)
Reactive stimuli:
adverse domestic market conditions
opportunity to reduce inventories
availability of production capacity
favourable currency movements
opportunity to increase the number of country markets and reduce market related risk
unsolicited orders from overseas customers
Proactive stimuli:
attractive profit and growth opportunities
ability to easily modify products for export markets
public policy programmes for export promotion
foreign country regulations
possession of unique products
economies resulting from additional orders
Managerial elements:
presence of export minded manager
opportunity to better utilise management talent and skills
management believes about the value of exporting

3. THE DIFFERENCE BETWEEN EXPORTING & INTERNATIONAL NICHE MARKETING
International Marketing
Marketing strategy
Financial objective
Segmentation
Pricing
Management focus
Distribution
Market information
Customer
relationship
Selling production capacity
To amortise overheads
Usually by country and customer characteristics
Cost based
Efficiency in operations
Using existing agents or distributors
Relying on agent or distributor feedback
Working through intermediary
Meeting customer needs
To add value
By identifying common international customer benefit
Market or customer based
Meeting market requirements
Managing the supply chain
Analysing the market situation and customer needs
Building multiple level relationships

4. FACTORS AFFECTING SME INTERNATIONALISATION
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FACTORS AFFECTING SME INTERNATIONALISATION
Generic
Strategy
Segmentation, Targeting, Positioning
Industry
Competitive
Structure
Stage of
Internationalisation
SME
Internationalisation
Strategy
Motivations
Barriers
Support Network
Market
Factors
Company
Factors
Country
Selection
Owner’s ambition,
capabilities and
attitude to risk
Customer
Segment

5. GEOGRAPHIC DEVELOPMENT OF SMEs
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GEOGRAPHIC DEVELOPMENT OF SMEs
Birth
Domestic
High tech firms,
born globals,
direct marketing,
eCommerce
Home market
is trading bloc
Piggybacking on OEM
internationalisation
Global
Regional
Supply
Chain
Contracts through
family, friends,
business &
supply chains
Concentration
Expansion
Network

6. OUTSOURCING FOR SMES Advantages Disadvantages
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OUTSOURCING FOR SMES
Advantages
opportunities for learning from OEM (Original Equipment Manufacturer)
security of reliable and predictable ordering
able to focus on production and technical issues
Disadvantages
need for dependence on one/two major customers
internationalisation driven by demands of OEM
continual pressure to improve product and operations
weakening external marketing

7. MEANING OF ‘GLOBALISATION’
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MEANING OF ‘GLOBALISATION’
Market access
Market opportunities
Industry standards
Sourcing
Products & services
Technology
Customer requirements
Competition
Co-operation
Distribution
Communication
The company’s strategy, business programmes & processes

8. Standardised Identity & Values With Composite Strategies
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WIDE STRATEGIES
Multi-Domestic
Regional
Global
Individual
Country
Strategy
Region is One
Market
One Global
Segment
Transnational
Strategy
Standardised Identity & Values
With Composite Strategies

9. CONTINUUM OF STANDARDISATION
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CONTINUUM OF STANDARDISATION
Pricing
Distribution
Sales Force
Sales Promotion
Product
Image
Objectives
Strategy
Differentiation
Standardisation

10. GLOBALISATION PUSH & PULL FACTORS
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GLOBALISATION PUSH & PULL FACTORS
‘Globalisation Pull’
Globalisation of Markets
Homogenisation of demand
Global market segments
Globally active customers
Source: Meffet and Bolz (1993) in Hallibuton and Hunerberg (eds) European Marketing Readings and Cases Addison Wesley 1993
Marketing Standardisation
Programme standardisation
Process standardisation
Globalisation of Industries
R&D expenses
Reduced pay back cycles
Experience curve effects
Globalisation of Competitors
Market interdependence
Global competitors
Cross subsidisation
‘Globalisation Push’

11. FORCES DRIVING A MULTI-DOMESTIC APPROACH
Industry standards remain diverse
Customers continue to demand locally
Being an insider remains critically important
Global organisations are difficult to manage
Management myopia

12. DEMAND FOR CUSTOMISED SOLUTIONS
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DEMAND FOR CUSTOMISED SOLUTIONS
customers cannot be classified into simple, stable segments
the customer in not monodimensional
desires guide consumption
functional and techonolgoical attributes of products or services are balanced by its aesthetics and cultural attributes
quality is now more subjective
a wide permanent variety of products is required
the quest for authenticity orientates consumption
Source: Halliburton (1994)

13. ch8_2
MARKET ENTRY METHODS & THE LEVELS OF INVOLVEMENT IN INTERNATIONAL MARKETS
Wholly-owned subsidiary
Company acquisition
Assembly operations
Joint venture
Strategic alliance
Licensing
Contract manufacture
Direct marketing
Franchising
Distributors and agents
Sales force
Trading companies
Export management companies
Piggyback operations
Domestic purchasing
Levels of
involvement

14. SUCCESSFUL MARKET ENTRY #1
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SUCCESSFUL MARKET ENTRY #1
Criteria for Selecting Appropriate Market Entry Method
The company objectives and expectations relating to the size and value of anticipated business
The size and financial resources of the company
Existing foreign market involvement
The skills, abilities and attitudes of the company management towards international marketing
The nature and power of the competition with the market

15. SUCCESSFUL MARKET ENTRY #2
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SUCCESSFUL MARKET ENTRY #2
Criteria for Selecting Appropriate Market Entry Method
The nature of existing and anticipated tariff and non-tariff barriers
The nature of the product itself, particularly any areas of competitive advantage, such as trademark or patent protection
The timing of the move in relation to the market and competitive situation

16. Export Management Companies (EMCs)
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INDIRECT EXPORTING #1
Domestic Purchasing
Foreign organisation purchases the product for export to another country
Gives access to and limited knowledge of the international market
Little control over choice of markets entered
For longer term, need a more proactive approach
Export Management Companies (EMCs)
Specialist companies act as the export department for a range of companies
Help SMEs to initiate/develop/maintain international sales
Deal with documentation, government regulation

17. Trading Houses Piggy Backing INDIRECT EXPORTING #2
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INDIRECT EXPORTING #2
Trading Houses
Their extensive operations and controls enable operation in more difficult trading areas
Manage countertrade activities
Piggy Backing
An established international distribution network of one manufacturer used to carry products of a second
Particularly good for firms from developing countries
Often poorly considered terms and conditions

18. IMPORTANT FACTORS FOR SUCCESSFUL EXPORTING
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IMPORTANT FACTORS FOR SUCCESSFUL EXPORTING
commitment of the firm’s management
exporting approach reliant on strong skills base
good marketing and information communication system
production capacity & capability, product superiority, competitive pricing
effective market research
effective national export policy
Source: Katsikeas et al (1996)

19. Selection Criteria for Finding a Suitable Agent
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AGENTS #1
Selection Criteria for Finding a Suitable Agent
Financial strength of the agent
Their contacts with potential customers
The nature and extent of their responsibilities to other organisations
Their premises, equipment and resources (including sales representatives)

20. Achieving Satisfactory Manufacturer-agent Relationship
AGENTS # 2
Achieving Satisfactory Manufacturer-agent Relationship
Allocate time and resources to find a suitable agent
Ensure that both understand what each expects of the other
Ensure that the agent is motivated to improve performance
Provide adequate support on a continuing basis
Ensure that there is sufficient advice and information transfer in both directions

21. REASONS FOR SETTING UP OVERSEAS MANUFACTURE
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REASONS FOR SETTING UP OVERSEAS MANUFACTURE
Nature of product e.g. perishable
Costs of transporting and warehousing
Barriers to trade e.g. tariffs and quotas
Government regulations e.g. local investment
Local manufacture viewed favourable by market
Contributions to local economy
Market information feedback
International culture in firm
Faster response and just-in-time delivery
Lower labour cost

22. FOREIGN MANUFACTURING STRATEGIES WITH DIRECT INVESTMENT
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FOREIGN MANUFACTURING STRATEGIES WITH DIRECT INVESTMENT
Reasons for investment in local operations
To gain new business: local production demonstrates strong commitment
To defend existing business
To move with an established customer
To save costs: e.g. labour, raw materials and transport
To avoid government restrictions

23. DRIVING FORCES FOR THE FORMATION & OPERATION OF STRATEGIC ALLIANCES
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DRIVING FORCES FOR THE FORMATION & OPERATION OF STRATEGIC ALLIANCES
Insufficient resources
Pace of innovation and market diffusion
High research and development costs
Concentration of firms in mature industries
Government co-operation
Self protection
Market access