Five Stages of International Development - Essay Example

Running Head: STAGES OF INTERNATIONAL DEVELOPMENT As time goes by well established organizations experience growth and change as well. There is a common course taken by all businesses as they spread their wings internationally to the rest of the world. This is not always the process, but it is good to note that it is the most experienced. This study is going to consider five major phases of international development with businesses in focus and as such the organizations of the US are going to be put under spotlight.

Phase number one is usually called Domestic Company. A business is regarded as a domestic company if its business operations are solely carried out in the nation where it originates. Its commodities are set for domestic market and the sourcing of factors of production is also domestic. A typical domestic company, thus, makes no dealings beyond its nation of origin’s boundaries. It, therefore, follows that such a business’ management is the easiest and domestically emanating challenges would also be resolvable with minimal effort.

(Dlabay, et al, 2010 p263) Anaren Company befitted this description in year 2006. (forbes.com, 2006) The second phase of international development is Exporting Company. This business type has dependence upon the home-market merits like reputation as it opens wings to the external markets. Its major focus is on sales of its familiar commodities in a small number of foreign markets. Exporting businesses rely on their independent agents in the management of their operations in the foreign or even utilize distributors to do the same work.

This is due to the fact that agents and distributors alike know the abroad based market places and thus success can be achieved through them with more probability. An example of a business in this stage is the Goscinski Enterprises which exports food commodities in three nations. (Dlabay, et al, 2010 p264) The third phase of international business development is that of Primarily Domestic Company with International Divisions. A good example of a company that has its primary operations based in the USA while at the same time having international divisions and set up to cater for the external market is the Legg Mason Investment Company. (reuters.com, 2011) International Corporations with Multi-domestic Emphasis form the fourth phase of international business development.

These are also known as multinational companies which has foreign divisions relying upon their parent companies for the international operations and organizational structure. The skills of management needed in an international business are numerous, though. An example of this phase’s description is the Abercrombie and Fitch Company. (Dlabay, et al, 2010 p264) The fifth phase of internationalization of a business is where it becomes a Multinational Business with Global Types of Enterprises. This is put as an overgrowth of an international company by Dlabay and others in their book describing international development process of a business entity.

A nation’s borders do not serve as a hindrance to the business operations of such a company. It serves clients worldwide. (Dlabay, et al, 2010 p265) Wal-Mart is one of the examples of such a corporation. (walmartstores.com, 2011) Thus, while concluding, it can be seen that the stages of international business development are with the inclusion of; Domestic Company, exporting company, primarily domestic company with international divisions, international corporations with multi-domestic emphasis and multinational business with global types of enterprises.

This is while trying to clarify the process of international business development. Reference: Dlabay, Les. (2010). International Business. Edition 4, illustrated. Cengage Learning. forbes.com. (2006). Anaren. Retrieved 15 April 2011 http://www.forbes.com/lists/2006/23/biz_06200best_Anaren_HFUB.html reuters.com. (2011). Legg Mason Inc (LM.N). Retrieved 15 April 2011 http://www.reuters.com/finance/stocks/companyProfile?symbol=LM.N walmartstores.com. (2011). History Timeline. Retrieved 15 April 2011http://walmartstores.

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