Module: Enterprise Strategy
Lecture 10 – Internationalisation/International Strategy
Factors that drive a business to internationalise:
Growth in the market
Increasing the size of their market = more profit
Partnership
Firm specific advantages: company has patented products that they have
developed, specialising in innovation.
Geographic advantages e.g. soil that’s suitable for growing a particular
product, weather factors, natural resources like fossil fuel and minerals
International and global strategy
Global strategy is broader – you see this in multi-national enterprises. This is a big
network (multiple enterprise network). They have customers across the country.
International strategy is about how a company moves out of its home country.
Drivers of internationalisation
Market drivers:
Similar customer needs – when the market has cultural similarities (values,
trends, beliefs). It becomes easier to sell the product because the company
thinks it understands the customers better.
Global customers
Transferable marketing e.g. what works in the US will work in the UK
Cost drivers:
Scale economies – unit cost will come down when you produce lots
Country-specific differences – there is very few manufacturing done in the UK
because the labour cost is much higher. With the difference in cost of
production, we have seen lots of companies moving out of the UK into other
countries.
Favourable logistics – it’s easier to base your production where your
resources are.
Competitive drivers
Interdependence between countries – bilateral or multi-lateral agreement
between countries e.g. to be taxed less.
Competitors’ global strategies
Lecture 10 – Internationalisation/International Strategy
Factors that drive a business to internationalise:
Growth in the market
Increasing the size of their market = more profit
Partnership
Firm specific advantages: company has patented products that they have
developed, specialising in innovation.
Geographic advantages e.g. soil that’s suitable for growing a particular
product, weather factors, natural resources like fossil fuel and minerals
International and global strategy
Global strategy is broader – you see this in multi-national enterprises. This is a big
network (multiple enterprise network). They have customers across the country.
International strategy is about how a company moves out of its home country.
Drivers of internationalisation
Market drivers:
Similar customer needs – when the market has cultural similarities (values,
trends, beliefs). It becomes easier to sell the product because the company
thinks it understands the customers better.
Global customers
Transferable marketing e.g. what works in the US will work in the UK
Cost drivers:
Scale economies – unit cost will come down when you produce lots
Country-specific differences – there is very few manufacturing done in the UK
because the labour cost is much higher. With the difference in cost of
production, we have seen lots of companies moving out of the UK into other
countries.
Favourable logistics – it’s easier to base your production where your
resources are.
Competitive drivers
Interdependence between countries – bilateral or multi-lateral agreement
between countries e.g. to be taxed less.
Competitors’ global strategies
