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The process of internationalization of the company

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The process of internationalization of the company

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The decision to operate in an international environment usually responds to a strategic vision of the company based on various factors.

• The penetration of new markets generates new dimensions:

• The production techniques and operations

• Distribution, provisioning

• Logistics and a strategic vision in marketing

• International diameter sales.

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The development of a cost leadership strategy, this strategy is produced through:

• Greater absorption of fixed costs:

• Exploitation of idle factory capacity.

• Increase in the number of total units produced.

• Better purchase conditions in the supply due to higher managed volumes.

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Development of new markets

• Markets where consumers have reached a sufficient purchasing power where to market the products offered.

• Life cycle of the market.

• Mature or saturated markets.

• Continuous decline or stagnation of the market.

• Increase in the level of investment.

• Reduction of the benefits obtained in the category.

• Continuous exit of consumers.

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Competitive situation in the current market

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Competitive situation in the current market

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• Business differentiation

• Markets «test» or «learning»

• Diversification of risk

• Internal synergies of the organization

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Barriers or internal obstacles:

• Mentality and risk aversion of the management team.

• Investment needs or financial difficulties of the company to penetrate new markets.

• Rigidity in the business structure.

Barriers or external obstacles:

• Information about the consumer.

• Government regulations, laws and a tax system different from the domestic market that can delay and hinder the implementation of international business.

• Prejudices and cultural factors.

• Unfavorable competitive situation.

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Stages in the internationalization process

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Stages in the internationalization process

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• Passive export. The company serves the orders that are requested abroad.

• Active or experimental export.

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• Consolidation of exports.

• Establishment of commercial delegations.

• Establishment of production sites.