18Globalization and International Strategy
Definitions:
International business: Profit-related activities conducted across national boundaries.
International management: Process of planning, leading, organising and controlling in organisations engaged in international business.
Explanation
Organisations develop from Domestic markets towards International markets at different rates and some industries are more prone to this process (e.g. the oil industry) than others (e g constructions, transport, and services like insurance).
Internationalisation brings risks-currency fluctuations, political changes, etc. so organisations may be slow to develop s fully global presence.
Methods of international development
In the first instance organizations might create an Export Department or website
Next, they might open marketing office in the host country
Then they might invest in production facilities-much more risky.
Other avenues include:
- Licensing of products or production techniques
- Strategic alliances with partners from the host country
- Wholly-or partly-owned subsidiaries-may include both marketing and production, and may issue shares locally.