Nobody downloaded yet

Risks and Rewards of Internationalization - Essay Example

Comments (0) Cite this document
Summary
RISKS AND REWARDS OF INTERNATIONALISATION by Risks and Rewards of Internationalization Strategies The advent of globalization has drastically changed the way is which business is conducted by firms…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.7% of users find it useful
Risks and Rewards of Internationalization
Read TextPreview

Extract of sample "Risks and Rewards of Internationalization"

Download file to see previous pages They have to compete with local as well as foreign firms. Many firms are founding new investment opportunities and new avenues of profit by going international. Internationalization also brings along with it its fair share of challenges. Firms have to adapt quickly in order to survive in the new world order. Internationalization has now become an important part of a firm’s strategy. It has become important to realize which strategies can be transferred abroad and what strategies are to be imported .Different markets pose different challenges, some of them may be solved by using global means whereas others need to be tackled through local strategies. In view of this; glocalisation is the new term which has been developed by researchers. Ohame (1994) has claimed that glocalisation means thinking global and acting local. (Hagiu, 2009) Although Internationalization has presented firms with numerous growth opportunities it also has presented various challenges such as an uncertain cultural, political and legal climate. The emerging markets such as India and China have unstable political and legal frameworks. It is difficult for firms to adjust to them and May sometime lead to collapse of the internal organization. Consequently firms have to find the best possible alternative when going for internationalization. They have to decide whether they want to go alone or venture into a partnership. This paper will analyse all such issues and the possible risks and rewards associated with internationalization. Internationalization: Definition Internationalization in simple terms can be defined as the process through which firms identify the international markets which are lucrative for them and try to enter it. Internationalization as a strategy can be adopted by firms by either acting alone or by acting in collaboration with other firms. (Cavusgil, 2009) Firms which act alone usually set up subsidiaries in the market which they want to enter or they may even buy up firms which are already present in that market. An example of this technique can be seen when Vodafone entered the Indian market it bought a majority stake in the company Hutch which already had a presence in the Indian market. Most firms are wary to go alone in a new market and that too market of an emerging economy. So they prefer to partner with other firms and make a strategic alliance with one or more than one partners. These partners may be local business firms or multinational corporations who have been present in that market for a long time. E.g. – Honda ventured in the Indian market by tying up with Hero – the local Indian partner. (Ferná, et al., 2005) Ways to Penetrate New Markets Different methods can be used by firms looking for internationalization of their business. Some of them will be discussed here - Export Method This is the simplest method of entering an international market. This was the method utilized by firms in the times before globalization. Export method is also very relevant today if the international market is not promising enough and the sales number do not explain setting up shop in the country. The advantage of this method is that the firm does not have to build up infrastructure nor does it have to partner with clients. (Jones, 2009)The firm simple pays the custom duty and its products enter the market. However if the firm is looking to capture the market of the country; export method is not a viable option unless you have an advantage which cannot be removed. Cases in point here ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Risks and Rewards of Internationalization Essay”, n.d.)
Risks and Rewards of Internationalization Essay. Retrieved from https://studentshare.org/business/1435910-critically-evaluate-how-businesses-can-use
(Risks and Rewards of Internationalization Essay)
Risks and Rewards of Internationalization Essay. https://studentshare.org/business/1435910-critically-evaluate-how-businesses-can-use.
“Risks and Rewards of Internationalization Essay”, n.d. https://studentshare.org/business/1435910-critically-evaluate-how-businesses-can-use.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Risks and Rewards of Internationalization

Potential Rewards and Risks of Strategies for International Organisations

...?Strategy Table of Contents Introduction 3 Reasons behind the International Businesses Usage of Strategies 4 Potential Rewards and Risks of Strategies for International Organisations 6 Potential Rewards and Risks of Strategies Involved With Different Entry Modes 8 Conclusion 13 References 14 Bibliography 17 Introduction Business organisations of present era are dealing with highly competitive environment. For the better implementation of business policies, vision and to attain the desired mission, management of every organisation comes up with sets of plan termed as strategies which further promises sustainable growth of the business. ‘Strategy’, in general words, can be...
12 Pages(3000 words)Essay

Rewards Strategy

...? Reward Management Business [Pick the Contents Introduction 3 Objectives 3 Pay Structure and Pay Arrangements 5 Flexible Benefits 6 Non-Financial Rewards 6 Communication Strategy The rewards program would fail to deliver if an appropriate communication strategy is not adopted by the bank’s human resources department along with its leadership team. In order to effectively inform employees of the enhanced package after implementation of total rewards strategy and avoid raising suspicion, fear or confusion from employees; it is important that a communication strategy is devised that should start a quarter before the actual implementation (Armstrong & Brown, 2006). The first...
10 Pages(2500 words)Assignment

Internationalization in general and the internationalization of Universities in particular

...policies to be created to improve the conditions for SMEs seeking to internationalise. For SMEs seeking to internationalise their operations, there are many considerations, only a few of which are covered here. The process is fraught with difficulty and can be extremely high risk if a full subsidiary is set up in the target country. Exporting is the least risky strategy and this seems to be the predominant method by which internationalisation takes place for SMEs. Universities’ Integration of International Operations Universities are finding that they now need to work in a more market-oriented environment, following deregulation and the charging of fees, together with reductions in grants and the use of league tables to...
10 Pages(2500 words)Essay

Internationalization Strategies

...? Internationalization Strategies Internationalization Strategies International business refers to international dealingsof a business or country pertaining exchange of goods, services and information. Companies may exchange physical corporate assets or acquire an entire company. An organization can also have facilities and economic interests in several countries. According to Hitt, Ireland, Hoskisson (2011), the main reason firms go international is to extend the lifecycle of their products. Firms require expanding to secure required resources. Supply of raw materials has caused many Chinese companies to expand internationally. Industries such as electronics and clothing move their...
9 Pages(2250 words)Essay

FDI Mode of Internationalization

.... The paper includes the factors or circumstances under which the organizations must prefer to internationalize via foreign direct investment rather than the other modes of internationalizations. Foreign market entry modes The modes to enter the foreign market differs with the degree of risk they present, the level of control and the commitment of resources the mode of internationalization require and also the return on investment they provide. There are different modes through which organizations can internationalize their business this mainly includes FDI, franchising or licensing and exporting (Stiglitz 2006). Each mode has certain advantages and...
8 Pages(2000 words)Essay

IKEA Internationalization Strategy

...not functional for them which was one of the biggest drawbacks. It was high time for IKEA to take some decisive action to help maintain the expansion of the company. IKEA decided to shift the tactics by redesigning the products according to the demands of American consumers, pretty soon the company was able to regain its position in the marketplace by becoming the second largest furnishing house in United States in 2008. IKEA International Business Startegy IKEA being a well established Sweden furnishing house aimed to grow the business internationally and it appears to be that IKEA took the biggest business risk by implementing the Global standardization strategy. Most business owners might not...
3 Pages(750 words)Essay

Different modes of Internationalization

...? Different modes of Internationalization Contents Contents 2 Internationalisation 4 Trade 4 Advantages of Trade 4 Disadvantages of Trade 5 FDI 5 Advantages of FDI 6 Disadvantages of FDI 6 ‘Home’ and ‘Host’ countries 7 Different Types of FDI 7 Different Types of Trade 8 Value chain 9 Greenfield 9 Brownfield 10 FDI alone or with partners? 10 Disadvantages of Strategic Alliances 11 Post Merger Restructuring 11 Push vs. pull paradigms 12 Traditional ‘transformation’ model 12 Netting 13 Hymer’s M-Form and U-Form 13 Vernon’s product life cycle (PLC) theories 14 Uppsala ‘stages of internationalization’ 14 Conclusion 16 Internationalisation Internationalisation is the process by which any company that is operating in its home country... value of...
12 Pages(3000 words)Essay

Internationalization of Trade

...Internationalization of Trade China and India together were the drivers of the world economy throughout the 18th and early19th centuries and it is estimated that they contributed 80% of the then GDP of the world economy, based on purchase power parity (Woodall Pam 2006). The West took over in the 19th century reducing their share of world GDP to mere 9%. (Dicken P. 2007) Later in the 1980’s there rose what is called the Asian Tigers comprising of Taiwan, Korea, Singapore and Hong Kong. China joined in a big way in the 1990’s and India has arrived at the scene now with more emphasis on services sectors. Innovation has been said to be a reason why firms invest abroad. The eclectic paradigm of Dunning (1981, 1988, 1993, 2000... ) and the...
9 Pages(2250 words)Essay

Internationalization Theories

...the theories, namely; the Dunnings Eclectic Paradigm, Krugers First Move Advantage Theory, and Vernons Product Life-cycle Theory promote the common goal of promoting business success and profitability through investment in the untapped markets abroad. However, the Vernons Product Life-cycle theory differs from the rest due to its critical approach to investing abroad as opposed to production within the country of origin. This theory approves internationalization of production at the least risk for the firm, and would rather promote production from within the original country unless the foreign market proves worthwhile investing into. On the other hand, the First Mover advantage theory looks the most...
12 Pages(3000 words)Essay

Risks

...taking risks Introduction To be a means taking risks, putting yourself and your concepts out there. Additionally, to be a writer means being vulnerable to criticism or even a subject of ridicule. If a writer has strong views on any subject, he or she is rest assured that some shade will be thrown their way, no matter how cautiously they present their evidence (White 65). O’Reilly in his book Kennedy’s last days has depicted well the risks he took and the responses he received. Summary of the source ‘Kennedy’s last days’ is about the exhilarating account of the horrific assassination of President John Fitzgerald Kennedy. The book is for age 10 and over. OReilly chronicles a valuable,...
4 Pages(1000 words)Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Risks and Rewards of Internationalization for FREE!

Contact Us