2. Managing Internationalization Process
International Business Strategy
301LON
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Unit: 6 Knowledgecast:1

3. Module Learning Outcomes
Demonstrate a sound appreciation of current strategic management concepts
Communicate an in-depth understanding of the complexity of the environment and its applications on decision-making process
Assess current developments in the organisational environment and alternative responses related to strategy
This Knowledgecast focuses on stakeholder power and ethics; how both shape and influence a business’ strategic capability.

4. INTERNATIONALIZATION
TRADING
SOURCING
INVESTMENTS
OTHER VALUE ADDING ACTIVITY ACROSS NATIONAL BORDERS ?
This Knowledgecast focuses on stakeholder power and ethics; how both shape and influence a business’ strategic capability.

5. Evolving Mentality
Strategies Emerging from the Integration Responsiveness
Global
Transnational
This Knowledgecast focuses on stakeholder power and ethics; how both shape and influence a business’ strategic capability.
International
Multinational
Refer to U2KI

6. Internationalization
Decisions and Motive
Firm’s decision to internationalize
Organisational factors
Environmental factors
Decision maker characteristics
Firm specific factors
Unsolicited proposals
Bandwagon effect
Attractiveness of host country
Foreign travel a & experience abroad
This Knowledgecast focuses on stakeholder power and ethics; how both shape and influence a business’ strategic capability.
Firm size
e.g VW in China
e. g US Telecom. Cpy in Mexico
Foreign language proficiency
International appeal
e. g Ekomate in UK & US
e.g Foreign bank in China
Decision maker background
Personal character

7. Pre-emption of geographic space
Internationalization Process
TIMING OF MARKET ENTRY
When a firm in approached by a customer
When competing firms enter into and important
market
When market is growing very fast
Other key strategic reason for timing-First mover Advantage
This Knowledgecast focuses on stakeholder power and ethics; how both shape and influence a business’ strategic capability.
Cost advantage
Pre-emption of geographic space
Technological advantage
Differentiation advantage
Political advantage
5 generic advantages

8. Internationalization Process
OBTACLES TO INTERNATIONALIZATION
OBJECTIVE
Liabilities of foreignness
difference in norms and rules
Liabilities of expansion
Problems of increased transportation, communication and coordination
Liabilities of smallness
resource limitation due to size of organisation
Liabilities of newness
Level of barriers to entry
This Knowledgecast focuses on stakeholder power and ethics; how both shape and influence a business’ strategic capability.

9. Internationalization Process
OBTACLES TO INTERNATIONALIZATION
SUBJECTIVE
Perception of Managers
Psychic Distance
The distance that is perceived to exist between characteristics of firm’s home country and a foreign country with which the firm is, or is contemplating doing business or investment
Child et al. 2009
may be high of low
This Knowledgecast focuses on stakeholder power and ethics; how both shape and influence a business’ strategic capability.

10. Internationalization Process
OBTACLES TO INTERNATIONALIZATION
Managerial perception of Psychic Distance
Cultural differences
Geographical distance
Language
Religion
Education /literacy level
Level of industrial development
Logistics infrastructure
Political system
Legal system
Government regulation
This Knowledgecast focuses on stakeholder power and ethics; how both shape and influence a business’ strategic capability.

11. Internationalization Process
Internationalization through decreasing Psychic Distance
Stage 1) no regular export activities;
Stage 2) export activities via independent representatives or agents;
Stage 3) the establishment of an overseas subsidiary;
This Knowledgecast focuses on stakeholder power and ethics; how both shape and influence a business’ strategic capability.
Stage 4) overseas production and manufacturing units.
Johanson and Wiedershiem-Paul, 1975

12. Internationalization Path
Uppsala Model
The Uppsala Model suggests that a firm’s international expansion is a gradual process dependent on experimental knowledge and incremental step.
It assumes that firms proceed along the internationalization path in the form of logical steps based on gradual acquisition and use of information gathered in foreign market and operations.
Market Knowledge
Market Commitment
Leads to
Leads to more
Market Knowledge
Leads to more
Market Commitment
This Knowledgecast focuses on stakeholder power and ethics; how both shape and influence a business’ strategic capability.
AND SO ON
Johanson and Vahlne, 1977

13. Knowledgecast Summary
Demonstrate a sound appreciation of current strategic management concepts
Communicate an in-depth understanding of the complexity of the environment and its applications on decision-making process
Assess current developments in the organisational environment and alternative responses related to strategy
MAXIMUM THREE LEARNING OUTCOMES TO REVIEW: ONE REVIEW SUB BULLET PER LEARNING OUTCOME

15. Seminar
Regular Assignment
Group Presentation on Environmental audit

16. Group Activity Regular Assignment
Group Presentation on Environmental audit