Company Internationalization motives (Homburg/Khromer 2009)

1.Risk reduction:

*stabilization of sales by supplying several markets with different economic cycles

*compensation for market shares lost to competitors in the domestic market

*counteract exposure to loss in domestic market

*maintenance of established market positions in foreign countries by means of intensified commitment

*following competitors to foreign countries in order to equalize the competitive situation

2.Realization of opportunities:

2.1sales opportunities 1:

*exploitation of new sources

*following important customers to foreign countries

*participation in the growth of foreign market

*achievement of growth targets that could not be met in the domestic market, e.g. due to market saturation or restrictions related to antitrust laws

2.2 sales opportunities 2:

*exploitation of higher willingness to pay on the part of buyers in foreign markets

2.3 sales opportunities 3:

*reduction of market development costs as results of economies-of-scale arising from higher sales volume

*utilization of lower market development costs in foreign markets

Globalization has been defined the increasing integration of economies around the world particularly through trade and financial flows

Global integration: recognizing the similarities between intern markets and integrating them into the overall global strategy`

Market responsiveness: responding to each market’s needs and wants

Levels of international marketing involvement:

1. Domestic marketing

2. Export marketing

3 .International marketing

4. Multinational marketing

5. Pan-regional marketing

6. Global marketing

EPRG scheme of international marketing orientation:

1.Ethnocentric orientation (domestic). A home country orientation or an unconscious bias or belief that the home country approach to business is superior

2. Polycentric (multinational). The unconscious bias or belief that it is necessary to adopt totally to local culture and practice.

Regiocentrism orientation. An attitude or orientation toward internationalization with the focus on regional orientation. View regions as unique and try to develop regionally integrated marketing strategies. Such approaches are usually used in the case of geographic regions that have been integrated economically (such as European Union or NAFTA)

Geocentric orientation. A management orientation based upon the assumption that there are similarities and differences in the world that can be understood and recognized in an integrated world strategy. The geocentric orientation or world orientation is a synthesis of the ethnocentric orientation (home country) and polycentric orientation (host country).

International marketing subjects: * companies doing international business: international, multinational, global and transnational companies, exporters and importers and service companies *companies of domestic market experiencing influence or control of their activity from abroad.

MNC is one with significant investment and operations in a number of countries, generating significant share of the total revenue from total revenue from foreign markets.

TNC are incorporated or unincorporated enterprises comprising parent enterprises and their foreign affiliates. (UN’s World Investment report)

A parent enterprise is an enterprise that controls assets of other entities in foreign countries, usually by owing a certain equity capital stake

A Foreign Affiliate is incorporated enterprise in which an investor, who is the resident owns a stake that permits a lasting interest in the management of that enterprise

A Subsidiary is an incorporated enterprise in the host country in which another entity directly owns more than a half of the shareholders voting power and has the right to appoint or remove a majority of the members of the administrative, management or supervisory body.

An Associate is an incorporated enterprise in the host country in which an investor owns a total of at least 10 per cent, but not more than a half, of the shareholders’ voting power.

A Branch is wholly or jointly owned unincorporated enterprise in the host country which is one of the following: a permanent representative office of foreign investor; and unincorporated partnership or joint venture; land, structure, equipment and objects directly owned by a foreign resident; mobile equipment (ships, aircraft, gas) operating within the host country for at least one year.

Basic Characteristics of different types of International Business organizations (Cherinilam 2007)

Multinational.

Configuration of assets and capabilities: Decentralized and nationally self- sufficient.

Roles of overseas operations: sensing and exploiting local opportunities.

Development and diffusion of knowledge: Knowledge developed and retained within each unit

Global.

Configuration of assets and capabilities: Centralized and globally scaled.

Roles of overseas operations: Implementing parent company strategies.

Development and diffusion of knowledge: Knowledge developed and retained at the centre