Definition of Internationalisation
Internationalisation is the process of corporation or generally enterprises operate in international markets. Internationalisation strategy on the other hand, is a strategy that is adopted by multinational firms in their quest to sell their commodities in outside markets.
According to Johanson & Vahlne (1977), this is often achieved by corporations by finding out the consumers need in a certain market and then designing their commodities in a way that they meet the specific need. This paper contains a detailed description of internationalisation strategy including why corporations are adopting it as well as how it is being implemented.
Case of Internationalisation
Companies have adopted internationalisation strategy so that their commodities can easily fit into the cultures as well as the language of the specific targeted market. This gives them a golden opportunity of generating new revenues and most importantly the profits. They are numerous times when a once well performing company starts declining in the local market and is no longer profitable.
Often when such firms internationalise, they related with the local communities within the specific target markets and they profitability is restored. Some companies do so well in the local market that their next goal is creating a brand that it internationally recognised for example the case of Coca-Cola. This has frequently been the reason why firms adopt the internationalisation strategy.
Internationalisation Strategy
There are a number of ways which internationalisation strategy can be implemented. The most popular one according to Fernández & Neito (2005) is multi-domestic strategy. Here, companies identify the local requirements of any given market and respond by designing [products that suit the local taste. This is contrary to forcing foreign goods and services to the locals. The aim here is to make the commodities suit the local language and culture.
Global Strategy
Global Strategy is another way of achieving internationalisation strategy. The firms come up with generally an acceptable good or service then modify it so it suits the requirements of a specific market. The modifications involved here are minor thus the company using it enjoys economies of scale for providing a lot of the same commodities in a large diverse market.
The final way of achieving internationalisation strategy is a combination of both the multi-domestic and global strategy as is referred to as transnational strategy. The firms match the taste within a given market with the efficiency desired. The transnational strategy is very popular among fast-food chains for example KFC and McDonald’s.
Conclusion
In conclusion, it is safe to point out that internationalisation strategy has efficiently been implemented by corporation throughout the world and yet is still the future of business. It is an efficient way of increasing sales and profits of any given firm as well as creating a global brand for it.
References
- Fernández, Z., & Nieto, M. J. (2005). Internationalization strategy of small and medium‐sized family businesses: Some influential factors. Family Business Review, 18(1), 77-89.
- Johanson, J., & Vahlne, J. E. (1977). The internationalization process of the firm—a model of knowledge development and increasing foreign market commitments. Journal of international business studies, 8(1), 23-32.
