1MANAGING ACROSS BORDERS Executive Summary The assignment has thrown light on understanding the different stages which are included in the process related to internationalization of the different multinational corporations present in the economy. With the help of internationalization, it will be suitable for the companies to gain a proper insight on the different aspects of the other companies which resulted in the effectiveness of the companies in comparison to the other competitors present in the market. Through the different instances, it can be analyzed the fact that the internationalization has become one of the major elements of the proper functioning of the firm along with future perspectives.
2MANAGING ACROSS BORDERS Table of Contents Introduction...................................................................................................................3 Analysis of Evolutionary Stages in Internationalization of an MNC.............................3 Stage 1- Domestic Company....................................................................................3 Stage 2- International Company...............................................................................4 Stage 3- Multinational Company...............................................................................4 Stage 4- Global Company.........................................................................................5 Stage 5- Transnational Company.............................................................................5 Conclusion....................................................................................................................5 References...................................................................................................................7
3MANAGING ACROSS BORDERS Introduction In the context of the business economics, the internationalization is referred to the organization which takes different steps for increasing footprint or capture the greater amount of the share in the market outside the country or domicile through branchinginthedifferentinternationalmarkets(Beugelsdijketal.2018).The internationalization of the different Multinational corporations is composed of different kinds of several stages and the identified steps are beingcharacterized through increasing, re-increasing along with decreasing the commitment towards the foreign markets. Thestagesofinternationalizationcanbetriggeredwiththehelpofthe external and internal factors which can be achieved through the different factors. In addition,therearecompanieswhichtakepartthroughexportingthedifferent products to the different foreign countries along with continuing to strengthen their home market. Importing as well as exporting plays a vital role and it is considered to bethemostcommonstrategyforthefirmstopursuetheprocessof internationalization. Analysis of Evolutionary Stages in Internationalization of an MNC Stage 1- Domestic Company As commented byKuramoto Gonzalez and Kindl da Cunha (2012), in the respective scenario, the domestic company tries to limit their operations, vision and mission to the national political boundaries. In the respective aspect, the companies focus theirviewindomesticmarketrelatedopportunities,domesticcustomers, suppliers along with domestic financial related organizations. When the domestic organizationsthinkofgrowingbeyondtheirpresentcapacity,theorganization selectsthestrategyrelatedtodiversificationforenteringinthenewdomestic markets, new technology and products. Instead of focusing on penetrating in the international markets. Moreover, as opined by Santangelo et al. (2016), the domestic company may extend their products in foreign markets through exporting, franchising as well as licensing. In such scenario, it can be seen that orientation is ethnocentric
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4MANAGING ACROSS BORDERS and, in many instances, it can be seen that exporting is indirect is the beginning prospect. For instance-McDonald’s have introduced the different vegetarian dishes such as McAloo Tikki for the customers staying at Gujrat and there are different beef related items for Dubai market. From the respective instance, it can be identified that McDonald’shaveintroduceddifferentitemsspecificallyforthedifferentforeign markets (McDonald’s.com 2019). Stage 2- International Company As commented byKuramoto Gonzalez and Kindl da Cunha (2012), when the different companies start trading abroad, some of the organizations grow beyond the productionorthedomesticmarketingcapacitiesandtheyinternationalizetheir operations. These are the different companies which feel the fact that different kinds ofpracticeswhichareadoptedbythedifferentdomesticcompanies,insuch scenario, the products and people of the domestic company are superior in nature. The main focus of the companies is domestic, but extends their wings to foreign countries. Forinstance-WhentheCanadiansCompaniesareexpandingtheir operations in the international marketplace, it usually addresses the market of United States first for gaining competitiveness. Apple is one of the suitable examples wherein they have introduced the different products as per the choices of the customers, however the pricing and the other elements of marketing mix has been constant (Apple.com 2019). Stage 3- Multinational Company As commented byRevindo and Gan (2016), the respective stage of the multinational company is referred to as the multi-domestic and it helps them in formulatingvariousstrategiesforthedifferentmarkets.Insuchscenario,the orientation of the companies shifts from ethnocentric to polycentric orientation and thedifferentsubsidiariesoftheinternationalcompanyworksasthedomestic company in each of the country which helps them in managing the activities in a smooth manner.
5MANAGING ACROSS BORDERS For instance-Nike is one of the suitable examples which can be considered as the multinational company wherein they have their presence in different parts of the world. In Indian market, Nike works as the domestic company through managing the distant policies along with strategies which are suitable for the country concerned (Nike.com 2019). In the Indian market, the customers prefer the different kinds of attires which are moderately priced and Nike tries to offer them the same. Stage 4- Global Company As opined byFletcher and Harris (2012), a global company is defined as the one which considers either the global market strategy or global strategy. In the respective aspect, the global companies produce the products in home country along with focuses on marketing of the respective products in the global market, or on the contrary,producesthedifferentproductsgloballyaswellasfocusesonthe marketing of the respective products in a domestic manner. For instance-Volkswagen is one of the suitable examples of global company wherein they have them headquarter at Germany and they have their presence in the different other markets and they follow the aspect wherein they produce the various products globally and focuses on the marketing of the different specific products in the domestic country (Volkswagen.com 2019). Stage 5- Transnational Company As stated byBeugelsdijk et al. (2018), the transnational companies’ products, markets, operates and invests across the entire world and it is considered as the integrated global kind of enterprise which helps them in linking the global markets at profit. However, on the contrary, there are different kinds of transnational companies which satisfies many of the different characteristics of the global corporation. For instance-Coca-Cola is one of the transnational companies wherein they take advantage of low worker wages in the different developing countries and the lowwages of theworkers alongwiththe freedom grantedby governments in developing countries are result to attract foreign investment (Coca-Cola.com 2019).
6MANAGING ACROSS BORDERS Conclusion Therefore, from theoverall analysis, it canbeconcludedthatthereare different kinds of stages in the process of internationalization. The five major steps in the internationalization process helped in understanding the different nature of the firms in various scenarios. From the different instances of the different companies, it can be inferred that in the domestic aspect, the firms are exclusively domestic, in international markets, the companies are expanding their market, however it retains the production related facilities within the domestic borders. Additionally, in case of multinational company, the firms physically move out some of their operations from home country and in global company, there is proper decentralization of the different operations. Lastly, in transnational companies, the firms owe little allegiance to the country of their origin.
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7MANAGING ACROSS BORDERS References Apple.com 2019 Apple (online) Retrieved fromhttps://www.apple.com/[Accessed on 12thAugust 2019] Beugelsdijk, S., Kostova, T., Kunst, V.E., Spadafora, E. and van Essen, M., 2018. Culturaldistanceandfirminternationalization:Ameta-analyticalreviewand theoretical implications.Journal of Management,44(1), pp.89-130. Coca-Cola.com 2019 Coca-Cola (online) Retrieved fromhttps://www.coca-cola.com/ [Accessed on 12thAugust 2019] Fletcher, M. and Harris, S., 2012. Knowledge acquisition for the internationalization ofthesmallerfirm:Contentandsources.InternationalBusinessReview,21(4), pp.631-647. Kuramoto Gonzalez, R. and Kindl da Cunha, S., 2012. Internationalization process and technological capability trajectory of Iguaçu.Journal of technology management & innovation,7(2), pp.117-130. McDonald’s.com2019McDonald's:Burgers,Fries&More.QualityIngredients. (online)Retrievedfromhttps://www.mcdonalds.com/us/en-us.html[Accessedon 12th August 2019] Nike.com2019Nike-ShopforNikeApparels(online)Retrievedfrom https://store.nike.com/[Accessed on 12thAugust 2019] Revindo, M. and Gan, C., 2016. Export stimuli, export stages and internationalization pathways: The case of Indonesian SMEs. Santangelo, G.D., Meyer, K.E. and Jindra, B., 2016. MNE subsidiaries’ outsourcing and insourcing of R&D: The role of local institutions. Global Strategy Journal, 6(4), pp.247-268. Volkswagen.com2019Volkswagen(online)Retrievedfrom https://www.volkswagen.com/[Accessed on 12thAugust 2019]