SUMMARY In this project report a detailed discussion regarding rapid internationalisation of businessandavailabilityofnumberofopportunitiesinthedifferentmarketsis discussed.As developmentis takingplaceexpansionofbusinesseshas become important in order to generate economic development. Growth of various economies in the world has become stable and they need to be improved. In order to generate higher developmentandgrabvariousopportunitiesavailableinthemarketabusiness organisation needs to be expanded in different nations of the globe. Government considers benefits of expanding at international level and helps business organisations in order to expand their operations in different markets. During the discussion, many factorshavebeenidentifiedwhichactasacatalystintherapidprocessof industrialisation.
INTRODUCTION International entrepreneurship is an activity through which businesses are expanded beyond national boundaries. This helps businesses to expand at large scale and grab more and more market share. More and more firms are expanding their businessesbeyondthenationalboundaryatarapidpace.Inthisreviewpaper internationalentrepreneurship,thetheoryofinternationalizationandrapid internationalization is discussed in a detailed manner. . MAIN BODY Explaining rapid internationalization By reviewing the views of Dachs and et.al., (2014) it has been analyzed that internationalization is a process through which business activities are operated at differentlocationsbeyondthenationalboundariesofacountry.Theprocessof internationalization was initiated before several decades and form then improvement is recorded in the scale of internationalization. At the initial stage there were only one or two large business organizations that initiated to operate at the international level and after that increment kept ongoing. Through rapid internationalization a business unit grabs an opportunity to explore its target consumers for the first time and have a chance to serve them effectively. It enables business organizations to gain an edge over the competitors by expanding the potential market. Many organizations have significantly increased their revenues and profits regards to internationalization. A low amount of competition facilitates businesses to grow and enjoy sustainability. Johanson and Mattsson, (2015), said that the process of internationalization becomes rapid and fast in the 20th century when the usage of internet services increases. As it enhances the expansion of businesses to international markets and various opportunities are grabbed in different markets to become successful. Rapid internationalization has a positive effect on the performance of a business by increasing itsscopefortheadvantageoffirst-mover.Astheavailabilityofthenumberof opportunities are there in international markets and organization which make the rapid move is benefited to enjoy all the opportunities available for the first mover to grab that opportunity. Rapid internationalization turned out to be a competitive factor for the 1
businessasvariousbusinessorganizationsaremadeavailablewithseveral opportunitiesandtheseopportunitiesprovidecompetitiveadvantagestobusiness organizations.Businessesareexpandedandtheamountofcontingencyinthe operations is diversified to large scale operations to minimize the scale of risk in business units. All the resources are available to the business organization which initiates rapid internationalization. As some of the resources become inimitable for business organizations that initiate business operations after a specific time. As per the views of Kalinic and Forza, (2012), with the increasing use of satellites, wireless communication, technology, internet and power devices such as computers, laptops etcetera, Internationalisation and expansion of business beyond the nationalboundarieshasbecomeviableforvirtuallyeveryfirmororganization. Increasing the use of the internet as a channel for international distribution has been a greatassistintheprocessoftradebetweendifferentcountries.Peoplecan communicate with each other globally at any point of time with much ease. Websites such as Skype and FaceTime enables its users to interact on one-to-one video calls as well. Meetings with employees located in a different part of the world can be easily done with the help of such apps and service-providers. Banking transactions have also become very convenient and cost-effective. All these factors have drastically changed the way multi-national companies operate and created a revolution in the area of international business since the physical distance between the countries has become shorterthaneverbefore.Developmentsmadeinthefieldoftransportationhave facilitated the free flow of goods across the globe. All these advancements have certainly acted as a catalyst in the process of internationalization and the number of firms operating internationally is ever-increasing. According to Maringe and et.al., (2013), Internationalisation is an incremental process.Anorganizationgoesthroughcertainstepsintheprocessofits internationalization and initially starts exporting to only those countries which are closer in distance to their home market. The distance here means to determine how similar is the importing country to the home or exporting country in terms of business culture, background, language, market etcetera. Traditionally, it was considered that the firms enter into international markets only after they have set-up a strong base in domestic 2
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markets. However, in today’s era, it is not necessarily true that internationalization is always an incremental process. The factors mentioned above have significantly reduced the barriers for any organization to expand its business internationally despite having some scarcity of resources. Rather, recent researches in the field of international business have shown that small firms these days bypass the incremental process and focus on international markets shortly after their inception. These rapid internationalizing firms have been named as ‘born global’. By analyzing the views of De Wit, (2013) it has been determined that the rising success of born global is attributed to the interrelation between three main factors which are new marketconditions,advancementinthefieldoftechnologyandtheincreasing competency of the people in these organizations especially the top management and decision-makers. Further, it has been found out that the size of the home market also plays an important role in determining the decision of the firms to go global. If the size of the home market is large, then the firms are not much likely to expand their business internationallyandwouldratherfocusongrabbingmoremarketsharewithinthe national boundaries. On the contrary, the small size of the home market increases the chances of any organization to expand internationally. Ou-Yang and et.al., (2016) said that thetheory of internationalizationhas some identifies barriers as well. Many reasons hinder the process of a firm expanding its business to international markets. Lack of working capital to finance export activities, inadequatehumanresourcesforinternationalization,low-supportfromthehome government, failure in contacting potential consumers overseas etcetera are some of thebarriers.Attimes,languagebarriersalsocreatedifficultyintheprocessof international trade. Ou-Yangandet.al.,(2016)saidthattraditionally,thetheoryof internationalizationwas limited only to organizations dealing with manufacturing and production of goods. It included fast-moving consumer goods, luxury products, capital goods etcetera. The idea of internationalization was linked with exporting goods to the international market. However, in the last few years, due to technological advancements andfacilities,therehasbeenamassiveincreaseintheexchangeofservices internationally between the countries. Many organizations are following the practice of 3
outsourcing their routine jobs like customer service to developing countries and focus on their core competencies and research projects. This also leads to cost-effectiveness. This also helps in the generation of more and more employment opportunities in developing countries like India. The service trade is increasing at a faster rate than that of trade in manufactured goods. By analyzing the views of Wach, (2015) it is assessed that the rapid pace of internationalization has created a lot of opportunities in the importing country. When organizations expand their business to international markets, it leads to the creation of manyemploymentopportunitiesintheimportingcountry.Peoplearerequiredfor carrying out operations effectively in the new country. Mostly, the firms that plan to expand their business internationally appoint people from the country that they are planning to import mainly because that person would have a better idea about the market conditions and would bring in the element of trust for the company. This benefits the overall pace of economic growth of that country. An increase in employment opportunities increases the income of the consumers which consequently increases the aggregate demand in the economy increasing production of goods and services paving way for capital generation. Internationalization has also opened up a huge capital market where countries in need of capital can borrow funds at low-interest rates. Organizationsthatconsiderexpandingtheirbusinessbeyondnationalboundaries always have in mind the additional investment opportunities that international markets have to offer. International business also can increase the goodwill of any organization. Global business operations help increase the brand value of any firm in terms of recognition and image. Many firms that were not able to generate much revenue in domestic markets due to intense competition have performed exceptionally well at the international markets. The free flow of goods across different countries all over the world has impacted consumer behavior significantly. Consumers are having many choices for any product type which provides them some bargaining power. The export of better quality goods at competitive prices has increased the standard of living of the people. The taste and preferences of consumers are changing with the movement of luxury goods as well. 4
SpowartandWickramasekera,(2012)saidthatexpandingthebusinessto different countries all over the world reduces the reliance of the organization on any single market for revenue and profits. During a recession period in the economy of any country, firms that operate internationally can shift focus on their other markets and generate enough revenue for them to sustain during the recession period. However, according to organizations that operate internationally although it benefits the importing country initially by creating employment opportunities and increasing the capital flow in the long-run these firms have the main motive of earning profits out of the international markets and taking them back to their home countries. Internationalization has been linked to increasing differences in income and wealth between rich and poor. It is quite evident by the increasing rich-poor gap in countries such as Indian and China. It is, however, difficult to examine the impact of internationalization on the economy of the importing country in the long-run. Aspertheviewsof(Pawęta,2015),internationalizationhascreatedtrade imbalances all over the world. While some countries are performing exceptionally well in the international markets and exporting at a huge level, developing countries struggle to match the level of exports by these countries and often fall victim to these trade imbalances. It becomes imperative for the government of these countries to adopt some import control measures and increase the taxes on imports to handle the balance of payments account. Small production units and medium-sized enterprises within the country face immense competition from these multi-national companies. The goods produced by these organizations are of better quality and are available at a lesser price because of the use of capital intensive technologies of production. Due to a lack of capital and limited resources, small and medium-sized enterprises are often not able to runtheiroperationsprofitably.Thegovernmentofdifferentcountriesisadopting measures to provide some sort of protection and assistance to this production and manufacturing houses. The rapid process of internationalization has badly affected the environment.Carbonfootprints,emissionofgreenhousegases,globalwarming etcetera have raised with the increased trade of goods and services. Opening avenues for new international markets has increased the sales of the organizations which has led 5
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toanincreaseinproductionandmanufacturingofgoods.Industrialactivityhas increased as a result of internationalization. CONCLUSION From the above project report on rapid internationalization it has been concluded that internationalization generates a huge amount of benefits for businesses and the economy of a nation. Expanding business at the international level brings economic development to various countries as several benefits are available to businesses by operating on a global scale. Rapid internationalization provides several benefits for business and to grab these opportunity risks to become the first mover is taken. Many factors such as technological advancement and increased access to the internet have been very helpful in increasing the pace of internationalization. It can be concluded that rapid internationalization provides many opportunities for the economic growth of both countries engaged in the short-term and medium-term. However, it is rather difficult to evaluate the impact of industrialization on the economy in the long-term. 6
REFERENCES Books and Journals Dachs, B. and et.al., 2014.The internationalisation of business R&D. Edward Elgar Publishing. De Wit, H., 2013. An introduction to higher education internationalisation.Milan: Vita e Pensiero. Johanson, J. and Mattsson, L. G., 2015. Internationalisation in industrial systems—a network approach. InKnowledge, networks and power(pp. 111-132). Palgrave Macmillan, London. Kalinic, I. and Forza, C., 2012. Rapid internationalization of traditional SMEs: Between gradualistmodelsandbornglobals.InternationalBusinessReview.21(4). pp.694-707. Maringe, F. and et.al., 2013. Emerging internationalisation models in an uneven global terrain: Findings from a global survey.Compare: a journal of comparative and international education.43(1). pp.9-36. Ou-Yang, H. Y. and et.al., 2016. The impacts of entrepreneurship on export orientation andinternationalisation:themoderatingeffectsoffamilyownershipand involvement.International Journal of Innovation and Learning.19(1). pp.1-24. Pawęta, E., 2015. Entrepreneur-related constructs explaining the emergence of born globalfirms:Asystematicliteraturereview.EntrepreneurialBusinessand Economics Review.3(4). pp.11-36. Spowart, M. and Wickramasekera, R., 2012. Explaining internationalisation of small to mediumsizedenterpriseswithintheQueenslandfoodandbeverage industry.International Journal of Business and Management.7(6). pp.68-80. Wach, K., 2015. Familiness and born globals: rapid internationalisation among Polish family firms.Journal of Intercultural Management.6(3). pp.177-186. Zander, I. and et.al., 2015. Born globals and international business: Evolution of a field of research.Journal of International Business Studies.46(1). pp.27-35. 7