Internationalization Strategies Questions Essay

Internationalization Strategies Questions - Essay ExampleThe reasons why a business may desire to pursue an internationalization strategy as part of its growth and expansion plans atomic number 18 strongly contextual. In particular, they will reflect the economic and political features of the domain or region of the investing firm, and of the country or region in which the company seeks to invest. Other factors at that will determine this decision include the attention and the nature of the value added activity in which the firm is engaged and the characteristics of the individual investing firm, including its objectives and strategies in move these objectives. Dunning (2000) identified four major types of internationalization activities (1) merchandise pursuance or demand oriented activities that are geared towards satisfying a particular foreign market, or set of foreign markets (2) resource seeking or supply oriented activity that targets gaining access to natural resource s (3) efficiency seeking activity which is knowing to promote a more efficient division of labour and (4) strategic asset seeking, which aims to protect or augment the existing specific advantages of the internationalising firm and/or to reduce the advantages of its competitors. These activities also mirror the advantages that organisations gain by pursuing internationalisation strategy such as greater market share, brand awareness and revenue, accessing more resources or technology for competitive advantage, efficiency and economies of scale which lowers cost of harvest-homeion, spreading of business risk and debut of entry barriers to ones industry. Factor conditions refer to the inputs that are necessary for a firm to repugn such as capital, infrastructure, land and labour. According to Porter (1990) the stock of factors in a country at any given time is less important than the extent to which they are upgraded and deployed. In reference to Dunnings resource seeking internat ionalisation objective, a company may therefore be attracted to a particular country where its key resources are generally rapidly upgraded for causa the strong government support experienced in Chinas manufacturing industry. Home demand conditions refer to the level of demand of a particular product locally in comparison to its level of demand abroad. It is largely influenced by size, number of independent buyers, worldliness of local buyers, rate of demand growth, early demand and early impregnation. A more demanding local market leads to national advantage and a strong, trend-setting local market helps local firms anticipate global trends. Early saturation of the local market also motivates firms to continue innovation and to reduce cost and/or pricing of products for example Japans TV industry saturated early and forced home players to seek bare-ass markets in Europe and North America. Finally, the home firms will be forced to enter foreign markets, Dunnings market seeking in ternational activity, in the search for more business and sustainable growth. Porters third determinant, related and supporting industries reflects the importance of the link between businesses within a value chain. think industries refers to those industries that share certain elements of their business for example the US has a vibrant information systems industry that