LES 6: International market selection
Internationalization strategies
New market entry basically has three questions Depending upon internationalization motive and
activity
When to internationalize?
o Decision between first mover or late mover to new market
How to internationalize?
o Enter in large scale or small scale depends on firms’ resources and commitment
Where to internationalize?
o Which market more attractive seeking balance between benefits, costs, and risks
OBJECTIVES:
Define international location selection and identify the problems in achieving it
Explore how international managers screen potential locations using secondary and primary
data (criteria)
Realize the importance of segmentation in the formulation of international market selection
Choose among alternative market expansion strategies
Op het examen geen algemene criteria geven!!!!
VIDEO CASE: Incom Leone
Slovinian company that makes icecream
Introduction:
Ben & jerry’s is a social enterprise they also focus on people, not only on profit and were
bought by Unilever because of how rich the enterprise was
Unilever changes the name in every country they go to, they change it to the local market.
You could argue that global internationalization is good, but they change the name because
of the meaning of the name in the local languages. The name is different because also the
taste is different, so it is to differentiate.
Heineken en InBev are very different, because Heineken has just one kind of beer and InBev
has like 10 different beers, so that is why it changes its name.
What type of manufacturer is Incom Leone?
B2B
White label
Private label
Contract manufacturing (produce to specification of the client) develop design and
customize (firms who manufacture have their own skills) brand manufacturing (produce
their own brand)
Les 6 08/11/2022 Pagina 1 van 8
, Which market selection criteria should Incom Leone consider in market selection?
Richer countries: custom products could be quite expensive
GDP per capita
Ice cream consumption: total sales used to measure
Number of competitors and who they are can be very important
Climate: number of hours of sunshine
Also the seasonality is important because when there is sun all year long and it is hot, you
will have to produce every month of the year for that country
Dairy consumption in the country
Flavor
Use surveys to get to know the preferences
Tourism in a country can be important in some countries
Criteria for Incom Leone
Difficult market entry
o Why?
• They are so big, so once you get in you can make a lot of profit
Secondry market
o Why?
• Because the others forget about those markets
• It can be easier to acces
Food regulations
o Knowing about them it very difficult
Sanitary rules
o …
Innovativeness
o Given that you want to bring products to the market
o This is something you can measure
o Try to relate it to the industry
Distribution channels on micro level
Economics of scale
o You have to develop a whole supply chain before going abroad
Key learning points:
The market selection process involves consideration of multilevel criteria.
The market selection criteria mix and prioritisation differ across firms.
Insight into business practices in diverse markets can result in product, service or process
innovations.
Strategic market diversification can reduce risks, generate stable revenues, and promote
continuous growth.
Locational decision making process
Les 6 08/11/2022 Pagina 2 van 8
Internationalization strategies
New market entry basically has three questions Depending upon internationalization motive and
activity
When to internationalize?
o Decision between first mover or late mover to new market
How to internationalize?
o Enter in large scale or small scale depends on firms’ resources and commitment
Where to internationalize?
o Which market more attractive seeking balance between benefits, costs, and risks
OBJECTIVES:
Define international location selection and identify the problems in achieving it
Explore how international managers screen potential locations using secondary and primary
data (criteria)
Realize the importance of segmentation in the formulation of international market selection
Choose among alternative market expansion strategies
Op het examen geen algemene criteria geven!!!!
VIDEO CASE: Incom Leone
Slovinian company that makes icecream
Introduction:
Ben & jerry’s is a social enterprise they also focus on people, not only on profit and were
bought by Unilever because of how rich the enterprise was
Unilever changes the name in every country they go to, they change it to the local market.
You could argue that global internationalization is good, but they change the name because
of the meaning of the name in the local languages. The name is different because also the
taste is different, so it is to differentiate.
Heineken en InBev are very different, because Heineken has just one kind of beer and InBev
has like 10 different beers, so that is why it changes its name.
What type of manufacturer is Incom Leone?
B2B
White label
Private label
Contract manufacturing (produce to specification of the client) develop design and
customize (firms who manufacture have their own skills) brand manufacturing (produce
their own brand)
Les 6 08/11/2022 Pagina 1 van 8
, Which market selection criteria should Incom Leone consider in market selection?
Richer countries: custom products could be quite expensive
GDP per capita
Ice cream consumption: total sales used to measure
Number of competitors and who they are can be very important
Climate: number of hours of sunshine
Also the seasonality is important because when there is sun all year long and it is hot, you
will have to produce every month of the year for that country
Dairy consumption in the country
Flavor
Use surveys to get to know the preferences
Tourism in a country can be important in some countries
Criteria for Incom Leone
Difficult market entry
o Why?
• They are so big, so once you get in you can make a lot of profit
Secondry market
o Why?
• Because the others forget about those markets
• It can be easier to acces
Food regulations
o Knowing about them it very difficult
Sanitary rules
o …
Innovativeness
o Given that you want to bring products to the market
o This is something you can measure
o Try to relate it to the industry
Distribution channels on micro level
Economics of scale
o You have to develop a whole supply chain before going abroad
Key learning points:
The market selection process involves consideration of multilevel criteria.
The market selection criteria mix and prioritisation differ across firms.
Insight into business practices in diverse markets can result in product, service or process
innovations.
Strategic market diversification can reduce risks, generate stable revenues, and promote
continuous growth.
Locational decision making process
Les 6 08/11/2022 Pagina 2 van 8
