Strategy development in international markets:

nine strategic windows

© 2018 Taylor & Francis

 Underlying assumption!

Global
industry
structure
International
marketing
strategies
Firm
resources

© 2018 Taylor & Francis

 internationalisation
Preparedness for
Two factors
impacting on
firm strategy

Industry globality

© 2018 Taylor & Francis

 Industry globality

© 2018 Taylor & Francis

 Number of competitors in the industry
Potentially global industry Global industry

Few Trade and economic Large players operating on a

liberalisation may drive the global scale threaten SMEs in
industry towards global local markets. Global
opportunities

Multi-local industry Potentially global industry

Few threats of global players Technological changes may

Many
entering the market. Local drive the industry towards
opportunities for SMEs global

Few Many
Globalisation drivers
Classification of industries
© 2018 Taylor & Francis
 Low

Degree of specialisation
Medium

High

Low Medium High

International range of firm activity

How to recognise industry structure?

© 2018 Taylor & Francis
Multi-local/global industry structure
 Low

Degree of specialisation
Global
Medium
Potentially
Multi-local
global
High

Low Medium High

International range of firm activity

You will “always” find “all kinds” of

players in an industry, but the emphasis shifts
© 2018 Taylor & Francis
 Globalisation drivers
Technical and safety standards
Converging cultures
Trade barriers  customs duties
Purchasing practices

© 2018 Taylor & Francis

 Preparedness for internationalisation

International organisational culture

– International sales ratio
– Operation mode

Market share in reference market

 Even small companies may be global market
leaders in their niche

© 2018 Taylor & Francis

 Home
Country
Country A
Country D

Country B
Country C

Multi-local Potentially global Global

What is your market share worth in a globalising market?

(or the importance of defining your reference market)
© 2018 Taylor & Francis
 Preparedness for internationalisation

Child:
No or limited exports
Marginal position in international markets
Limited insight into international markets

Adolescent:
Export to selected markets
With a certain market position
Increasing insight into international markets

Adult:
Heavily internationalised and financially strong
Market leader in key markets
In-depth insight into international markets

© 2018 Taylor & Francis

 Ahold Nike
Adult France
Deutsche

internationalisation
Dressman Telecom

Preparedness for
Bank
JordanLenovo YaraABB
Helly Haier
Orkla Hansen Telenor
Adolescent
Nordea
Volvo
DnB
Child Local
hairdresser

Potentially
Multi-local global Global

Industry globality

Nine categories of firms – examples of firms in the framework

© 2018 Taylor & Francis
 Seekmarket
new Ahold Nike Strengthen

internationalisation
Local Prepare for France
Adult business Market leaders
Deutche your in
global
leaders in selected
Dressman
globalisation Telecom

Preparedness for
development electronics, shipping,
Bank
Lenovo ship
position
industries Jordan Yara ABB
equipment Haier
, pharmaceuticals,
Helly
branded goods
Consolidate Orkla Consider
Hansen Seek
Telenor
Adolescent in existing international global
Service firms expansion Nordeaalliances
markets
in fex construction Small specialised
Volvo
Seek nicheshi-tech
and restaurants; some
. in Seekfirms in owners
new fex
DnB/Nor
manufacturing
Stay at internationalICT, with
indu- offshore,
extensive
Child homelike fex, markets biotech,
stries
Local etc.
international
hairdresser
furniture networks
Potentially
Multilocal global Global

Industry globality
The nine strategic windows
© 2018 Taylor & Francis
 The multinational player The global market leader
Adult

internationalisation
Limited
Patchy investments Securing market leadership

Preparedness for
in selected
threats ofmarkets. through new product
Greatdevelop-
Consolidation and ment and consolidation of rela-
globalisation threats,
“clearing up” tions, brands and networks
drivers but also great
and selected opportunities
opportunities The bold of global-
newcomer
Theofcareful
multi- newcomer isation
domestic The market isdrivers
conquered
Small steps in in great leaps!
setting
neighbouring markets. Niches and niches.
Child “The road is paved as you go.” Networks, networks, networks

Multilocal Global

Industry globality
Four categories – four strategic windows
© 2018 Taylor & Francis
 Transaction cost economics
FDI and global management
• Well-developed
High internal capabilities

internationalisation
Transaction
allow decisions based on rational Complex FDI andand global global
interdependent
calls for more “holistic”
cost economics environment

Preparedness for
analysis of alternatives. management
theoretical explanations involving TCA,
. Individual transactions without including its “half-sister” , FDI (OLI),
regard to the whole picture made network/alliance and organisational
possible by industry multi-locality.capability theories.

Incremental
Incremental internationalisationNetwork perspective
Network
internation- perspective
• warranted to build•
alisation
Stepwise learning Access to partner resources critical to
Low
internal capabilities. supplement own deficiencies.

. Stepwise entry made possible by . Waterfall entry

Multilocal critical to pre-empt
Global
industry multilocality (limited reaction from MNEs seeking global
opportunities.
competitor reaction). Industry globality

The relevance of theories varies

Source: Solberg and Askeland 2006
© 2018 Taylor & Francis