International Marketing

Internationalisation
Chapter 2, Essentials of Global
Marketing, Svend Hollensen
Internationalisation - topics :
Initiation of internationalisation
Internationalisation theories
Deciding which market to enter
The choice of entry mode

Today
1. Question from what you have read?
2. Initiation of Internationalisation (the pdf.-file chapter 2)
short introduction:
Motives for internationalising
The triggers for export initiation
The companys export readyness
Barriers to internationalisation
3. Assignment/Study question
4. Internationalisation theories (the pdf.-file chapter 3)
4
Internationalisation Motives
Proactive:
Profit and growth goals
Managerial urge
Technological competence/unique product
Foreign market opportunities/market information
Consumer preferences internationalise
Economies of scale
Tax benefits
5
Internationalisation Motives
Reactive:
Competitive pressure
Small and saturated home market
Overproduction/excess capacity
Unsolisited foreign orders
Extend sales of seasonal products
Proximity to international customers (psycological distance)


Discussion 2 and 2:
How would you prioritise the mentioned export
motives regarding what is most important if a
company want international success?
Can you imagine other export motives other than
those mentioned?
Triggers of export initiation
(change agents)
Internal triggers:
The managements knowledge and experience on export
Specific internal event
Import as inward internationalisation

External triggers
Market demand
Competing firms
Trade associations
Outside experts
Discussion
What do change agent mean when talking about
Global Marketing? Do you have an example
Initiation of internationalisation
Information and knowledge a critical factor for SMEs when
initiating export
Translation of information
Conclusion internationalisation or not?
Export preparedness
includes an analysis of a number of factors in order to assess
whether the company has the ability to start exporting to a
new market
A companys export preparedness include:
The companys capital and finances
Management commitment an export experience
Language skills
Knowledge og export procedures (eg. Customs etc.)
Other relevant factors

The 4 internal Pies
The companys export preparedness
Product
Suitable for export
Possible to customise
Production
Capacity
Flexibility
Personal including management
Education know-how, culture,
language etc.
Motivation
Experience
The managements approach to
export
The managements kompetency
Money the financial situation
Liquidity
Profitability
Capital
Financing opportunities


Barriers hindering internationalisation
initiation (internal):
Insufficient finance
Insufficient knowledge
Lack of foreign connections
Lack of export commitment
Lack of capital or finance expansion into foreign markets
Lack of productive capacity to dedicate to foreign markets
Lack of foreign channels of distribution
Management emphasis on developing domestic markets
Cost escalation due to high export manufacturing, distribution and
financing expenditure
Barriers hindering internationalisation
initiation (external):
General market risks:
Competition, difference in buying behaviour, language and culture,
distribution channels available, product specifications
Kommercial risks:
Exchange rates, customers ability to pay, delays in delivery or
distribution
Political risks:
Restriction, national export policy, lack of help overcomming export
barriers, high foreign tariffs on foreign products, complexity in trade
documents, confusing foreign import regulations and procedures