FOLLOW US     
           
    + 34 951 16 49 00    
Spanish Italian English
ERASMUS+

Accelerating Cross-Border transaction of SME

Internationalization Strategies
Descargar    Play Audio
What is Internationalization?

What is Internationalization?

Companies have been looking for their place in international markets due to surplus of production being produced in today’s world, local competition and specialization on a particular product

This issue is vitally important in each country. Companies become competitive in international market through creating low-cost on production through specialization

Sustainability of competitiveness is also crucial as well as being competitive. 

Internationalization Strategies

Internationalization through Import / Export processes

Internationalization through import/export processes mentioned in the first section includes commerce among supplier/buyers. Government policies are virtually important for both side. 

For example; goods to be imported or exported have to be out of banned goods list in importing country and have to be out of banned goods in exporting country as well.  

Import customs tax to be applied on goods which are not banned to import is one of the most important factor for importing countries in terms of internationalization. 

Internationalization based on Agreements

In the second section; exporting company export know-how into importing company to produce a good, allows importing company to use producer’s brand in terms of License and Service agreements without actualizing verbal good sale. 
 
National production is provided through banning importing as government policies in under-developing economies. Companies, under-development develops more import services and know-how from companies which are available to invest.  

Administration Consultancy is another crucial point as well as know-how importing to produce for an issue

Administration consultancies have become one of the most important factor at internationalization as it is applied among companies in different countries while it was being done among companies in the same country

Another factor at internationalization platform is Logistic Service. Logistic service is essential factor at foreign trade and internationalization. Service can be provided in different countries as dealing with an international logistic company. 

Another way to provide the same service and product quality is Dealership and Distributorship agreements. 

«Dealership System» composed of sale good and service in particular areas determined by exporter and importer and «Distributorship» composed of sale, marketing, advertising service and goods provided by exporter in a city, county, province or in a country territory.

«Franchising» is epitome for internationalization without exceptional cases. 

«Custom manufacturing» is another way of international cooperation. Some parts of products, having complicated production formulation and high-cost,  are get produced by another producer which can produce with less-cost. 

Allowing companies to produce «By product production» through custom manufacturing is such as to support economic development of company where production to be produced. 

Internationalization support development in terms of global way and increase economic, social and welfare in this scope. Capital necessary for custom-manufacturing is provided as national capital in country where production to be produced; joint capital or foreign direct investments may be used for construction, shipyard, energy line producing.

Exception of purchase and sale of a product or service, larger capitals and projects to be long-lasted, jobs to be done according to agreement between countries are being tendered into construction companies. 

Having certification of completion / increasing certification of completion are the most important factor to work in multi-national platform. It is virtually important for companies to complete works to be completed in different places and different times. 

Financing companies which will work in international platform, is important in terms of delivery time and complete well.  

Economic encouragement are considered to increase completion capabilities through Government policies in this scope 

Companies may perform different works in different areas simultaneously thanks to «Prefinance» and companies may have multinational structures.

Financing companies may be provided by institutions where works to be done or contractor country as export and internationalization to make foreign currency in-flow. 

Internationalization based on Investment

Another principle of multi-national working is Joint Venture or Sole Propertiership


Joint venture is a way to enter into new markets via partner company located in targeted market. 

Joint venture; may be actualized as purchase share of company in another country or establishing new company together with partner company

Advantages of joint venture may be explained as following: 
In case of foreign direct investment (inward)
Using new and better technology,
Becoming more competitive in domestic market 

Foreign Direct Investment (outward)
Capturing new market where entered in, faster
Supplying market needs in shorter time
Decreasing investment risk

Joint venture can be actualized in more than one country as well as it can be actualized in domestic markets through partnership of two or more than two companies

Disadvantages of joint venture:

Risk of entering into unknown market
Unanticipated Investment costs
Disadvantages to be occurred due to government policies where investment is done (civil war, elections, amendment of government policies or laws, different tax applications and etc.) 


Sole propertiership; is kind of invesment. Investment is made by one company in particular country as all costs and expenses are covered by one company. 

Sole propertiership is actualized as opening new branch of host company in another country/ies or establishing new company in another country. 

Government policies must be considered in terms of establishing company in country where investment to be made. 

Sole propertiership investment has advantages and disadvantages. 

Advantages of sole propertiership :
High profit ratio 

Making decision and applying decisions faster

Disadvantages of sole propertiership :

Covering all investment rish by one side

High investment costs

Determining market strategies difficulities to be seen in new market 


Description

Companies have been looking for their place in international markets due to surplus of production being produced in today’s world, local competition and specialization on a particular product This issue is vitally important in each country. Companies become competitive in international market through creating low-cost on production through specialization Sustainability of competitiveness is also crucial as well as being competitive.

Bibliography