MOD003497 - Arrival's Internationalization Strategy: China and US

This essay analyzes Arrival Ltd's prospects for internationalization into China and US markets using internalization theory. It examines the competitive advantages and strategic tools for business expansion, considering factors like market research, trade barriers, and cultural differences. The essay compares Arrival's organizational perspectives with the internalization theory, highlighting the potential challenges and opportunities in expanding into new markets. The study also discusses the role of market entry modes and the importance of strategic decision-making in international business. The analysis uses primary data to identify the positive impacts of internationalization, such as cost reduction, market access, and enhanced productivity.

MANAGING
INTERNATIONAL
BUSINESS

Table of Contents
ESSAY.............................................................................................................................................3
REFERENCES................................................................................................................................1
APPENDIX......................................................................................................................................2

ESSAY
Using a IB theory, comparing and contracting Arrival's prospects for internalization into
China and US markets-
International management are the business operations in organization to serving the
markets and handling in multiple countries. Arrival Ltd is the electric manufacture company
which is headquartered in London UK. It claims their electric vehicles is the fist EV segments
which cost same with petrol and diesel equivalents. This study will be based on one of the core
IB theories as introduced in Week three modules in framework to compare the Arrival prospects
for the internationalization into two markets. It shows the competitive advantages in terms for
expansions of business. Also, it will be explained how the theory will work as a strategic tool for
expansion of the company. Various relevant texts will be considered in the theory for increasing
the knowledge of the aspect (Ali and et.al., 2021).
This theory is division of economics that identifies the behaviour of international
business. Also, this is based on the imperfections in-between product markets there are two main
intermediate products such as flows of linking to research and development to production and
follows of element and raw materials from upstream facility of production to downstream. There
are applications which mostly focuses in the knowledge of flow. Proprietary knowledge are easy
to address when intellectual rights like patents and trademarks are weak. With the powerful
protections the firm protect the knowledge by secrecy. Whereas the licensing of knowledge to
the local producers, they make efforts in their own production facilities. Internalization leads to
international and multinational enterprise because the knowledge is the public good. New
technology is linked with the firm and knowledge is transferred to other facilities (O'Higgins,
Aramburu and Andreeva 2021).
It appears when business realize the benefits to surpass the cost and when it directs
towards foreign investment firm may assist with commercial and political risk because of
unfamiliar with the foreign environment. This is the method of cost of moving business abroad.
These high cost may licence the outsource production to the individual firm or it can be produce
to home or export to the country instead (Meyer and Schotter, 2020). With insufficient
knowledge they may form multinational for assign supplies of raw materials and take the
guarantee of quality, continuous supply and for tax benefits from transfer pricing. In the links to
the international business with this theory, the study was mainly focused on environment while

in the financial, political, economic and cultural conception of performing business overseas.
Internalization theory brings the international firms and increased international field of business
with presenting the interrelations between external environment and internal knowledge which
flows in between MNE raise firm and subsidiaries. These interactions of external country
particular benefit and internal MNE firm special advantages are linked with strategic managerial
international business decisions (Brzica and Brzica, 2021).
While the view multinational transfer technology and not the capital provides a biggest
boost up to the globalization process. United nations conference on trade and development is
introduced through internalization theory. It works as to encourage political leaders inward
investment with the way of new technologies needed for economic development. Apart from this
multinational profits highly viewed as cost for knowledge and technology instead of interest
provided to capital and foreign ownership which also accepted for the mandatory safety for
investors intellectual property. There are competition between firms where the theory works as
to price competition in differentiate goods as compare to perfect subtitles. The substitutability
among the products is based on vertical and horizontal levels of differentiations. Vertical refers
to differences of objectives and horizontal differences are which the buyer will depart in their
rankings. It must be observed that the profits are rise from the demanding conditions and cost
level in international business methods and by the technologies of the firms (Pitel and et.al.,
2019).
Arrival is one of those British Electric vehicles manufacturers in the UK, that designed
and sells the best and lightweight commercial vehicles in the world. Denis Sverdlov as the owner
of chosen company had conducted a lot of initiatives to reach desire aim and objectives of brand,
which is essential for him to do that. In the context of internalization into Chinese and US
market, organization may have clear prospects. By referring to internalization theory, it can be
said that firm may tend to conduct appropriate market research before taking approach to enter
into new two chosen market (Kano, Ciravegna and Rattalino, 2021). According to the theory,
international business environmental analysis is essential, as it specifies the exact situation of a
nation or regions, where a firm tend to enter and plan to establish their venture, which is full of
risk and challenges. As per the organizational prospectives, internationalization is the best way
that most of the companies may adopt and take into their consideration, in order to gain
competitive benefits and grabbing existing opportunities. On the other hand, internalization is

defined as process of conducting external environment analysis, according to the internalization
theory, which make organization able to identify factors or forces that will affect positively or
negatively upon its success in the new nations or markets (Forsgren and Holm, 2021). The
selected IB theory may state that gains from FDI morles of business expansion might be higher
relative to non FDI modes.
In the recent time, the process of internationalization is quite challenging and risky as
well, because of varied reasons such as trade barriers, ineffective mode of enter, intense
competitive environment, etc. When Arrival, will plan to enter into US and Chinese market, then
it will face number of major issues that lead to decrease its operational effectiveness or
efficiency, which is not good for its brand image in the existing and further markets. The
prospects of Arrival regarding internationalization is quite different from statement of
internalization theory. As it focus on going public via business expansion that firm considers as a
great opportunity that will permit venture to continue to scale internationally and bring items to
more people (Gerow, 2022). On the other wide, foreign expansion along with consideration of
business growth opportunity may also recognize as challenging and risky factor too, because the
overall process encompasses different types of risks or issues that will be impacted negatively
upon chosen vehicle brand in form of decreasing sales and productivity level, which is not
suitable to rapid and competitive growth of companies, either public or private. The comparison
of organizational prospects and chosen theory for internalization into two national markets is
quite different. As firm consider it as a growth opportunity, while theory state this process of
steps toward business environmental analysis, that aid to determine or specify key issues or
challenges that may put impact on current performance level and further decisions of company.
The expectations of Arrivals regarding internationalization will specify their strategic aims and
objectives, which firm will tend to achieve in term of expanding venture that in turn contribute to
increase its profitability and productivity as well as customer base, that is one of the biggest
challenge of organizations, operating in the competitive business world, with key aim and
strategic objectives.
According to, Ipsmiller and Dikova, (2021) internationalization is considered as
development of specific programmes, that enable companies to internationalize their ventures
across national boundaries, within particular foreign market. This program in turn provide
multiple benefits to each company in term of increasing sales, enhancing customer base and

satisfaction level. While, Igwe, Rugara and Rahman, (2021) stated that internationalization
process refer to set of activities and actions that an organization may attempt to conduct, for
purpose of determining forces that impact negatively upon business, along with consideration of
opportunities. Author stated that international expansion, is a challenging process, as it includes
different type of factors that lead to decrease the operational and functional efficiency of
companies, either public or private, small or large in the corporate world. Internalization theory
also state the similar statement, which will drive the attention of any organization toward
considering key factors and gathering information regarding the same things, that will prevent
their businesses from downfalls that affect adversely upon success factors.
International expansion as per the organization will provide unpredictable benefits to its
venture such as new market image establishment, business growth increment, cost of establishing
an entity, competitive benefits, and more. While, it will create more challenges from initial level
to the final stage of internalization. Language, cultural, and other types of barriers lead to
decrease the organizational performance and productivity. Along with these, there are more
issues arise with process of foreign expansion, such as inappropriate info about a nation or
market when firm plan to enter (Handojono and Matrutty, 2021). It will create issue to
internationalize venture that put adverse impact on decision-making process of management in
Arrival. Organization is able to satisfy customers or target market in form of fulfilling their needs
and expectations, which is important for firm to do that. With this form of capability, it may hold
strong prospective about internalization. As it will focus on entering into two new markets,
where the expansion and sustainability of business is quite challenging and beneficial too.
There are number of market entry modes, accessible in the world of business, that chosen
company will take approach to select, which would benefit in several terms. It is important for
company to select and use the best entry mode, as it directly affect the way it expands and will
plan to continue business in China and US market, where business growth opportunities
accessible in bulk. There are number of companies accessible in the similar sector where Arrival
had established business presence. Each company had taken initiative to expand across national
limits. This initiative in turn provide benefits, along with developing new challenges that
companies are accountable to take into their consideration. It is essential for Arrivals to focus on
expansion challenges that will decrease its business effectiveness and power to enter successfully
into two new chosen markets, where other organizations are also thinking to enter. With positive

aspects, there are some negative things also encompasses with internationalization process. It
will impact decision-making, and other functional as well as operational activities that had been
conducted in Arrivals by the managers, leaders and other stakeholders. The overall comparison
drawn in the study based on internalization theory and organization related to
internationalization, that drive the attention of individuals toward strategic elements and
concepts. Prior to internalization theory, the research of internationalization venture may widely
focus on environment, and in specific economic, political, financial and cultural dimensions of
doing venture in foreign market. This framework specified a concept of international
organization and therefore augmented global venture field by demonstrating connection between
internal and external environmental knowledge. This form of interaction between internal
companies specific benefit and external advantages is nexus for essential managerial global
business actions and decisions.
By using the primary data sources such as through questionnaire it has been identified
that majority of respondent think that organization has positive hope for internalization. It
believes that it provide lot of benefit. Managers are selected as respondent who provides all the
information of the company about the internalization which helps to identify the company
potential. The another positive impact was of internalization found it cut downs the cost of
outsourcing the process of manufacturing or selling products. It permits access to wide range of
markets and helps to build up the company image as well. While it enhance the productive
capacity and permits the independence from general market business cycles. In discussing the
market entry mode, it forms better outcomes as the company is moving with direct expansion of
different market such as china and US. For the US customers it will allow them to make the free
trials for the new van and bus products. The fully electric van is made with lightweight
aluminium frame which is design to provide overall lower cost of ownership. The company is
building the 2.0 generation E service vehicles for the expanding the operations to U.S. The first
second generation vehicle is created for the similar price as petrol and diesel. While the company
unique approach is to use micro factories serve high expansion to the areas of demanding which
includes UK and USA. There are challenges which organization face for internalize business,
language barriers, cultural barriers are the key aspect which company faces in the further busines
s process. Moving the business to different place come with issues of different culture and
languages where language is the key to interact with new customers and divert into a new

culture. Lack of knowledge about business environment is the biggest disadvantage as it is
important to know about the working culture to deal with the situations in the easy way and run
the business for the longer term. According to the respondent it is observed that internal and
external business environment analysis and team formation are the factors which the company
use to overcome the impact of internalization. These are linked with the strategic managing
international business decisions, on positive note formation of team bring the efficiency and
working on new upcoming technologies brings the better results in the working process.
On the basis of above discussion, it has been concluded that internalization theory had
specified the strategy behaviour of company that had conducted practices internationalizing its
venture into two specific and developed nations. It has gained competitive advantages in term of
expanding business in each nation where it had obtained business growth chances. It had
conducted a lot of efforts to gain competitive benefit in the Chinese and US market, which is
quite essential and beneficial for its rapid progress in the automotive sector, where number of
companies or brands exist in the market. Furthermore, from above analysis, it has been
determined that by using and considering chosen IB theory, the comparison and contraction of
organizational prospects in the context of internalization into chosen national markets has been
specified. It has provided comprehending information about what organization expect and tend
to expand its business in the national markets such as UK and China. It has been identified from
above study, that internationalization process had driven the concentration of company toward
considering major factors. It has enabled it to develop strategic plans and strategies that
contribute to overcome further situation and their impact on business. Moreover, it has been
concluded that the selection of internalization theory enable to compare the prospects of Arrivals
for internationalization, that had specified varied things.

REFERENCES
Books and journals
Ali, T., and et.al., 2021. Managing international joint ventures to improve performance: The role
of structural and social mechanisms. International Business Review, 30(3), p.101791.
Brzica, N. and Brzica, I., 2021. MANAGING SECURITY RISKS IN INTERNATIONAL
BUSINESS. Poslovna izvrsnost, 15(2), pp.87-102.
Forsgren, M. and Holm, U., 2021. Controlling without owning–owning without controlling: A
critical note on two extensions of internalization theory. Journal of International
Business Studies. pp.1-13.
Gerow, A., 2022. 3. COLONIAL-ERA FILM THEORY, SPECTATORSHIP, AND THE
PROBLEM OF INTERNALIZATION. Theorizing Colonial Cinema: Reframing
Production, Circulation, and Consumption of Film in Asia. p.68.
Handojono, M. and Matrutty, T. J., 2021. THE EFFECT OF INTERNALIZATION OF LOCAL
CULTURE ON AUDITOR'S SKEPTICISM. International Journal of Economics,
Business and Accounting Research (IJEBAR). 5(2).
Igwe, P. A., Rugara, D. G. and Rahman, M., 2021. A Triad of Uppsala Internationalization of
Emerging Markets Firms and Challenges: A Systematic Review. Administrative
Sciences. 12(1). p.3.
Ipsmiller, E. and Dikova, D., 2021. Internationalization from Central and Eastern Europe: A
systematic literature review. Journal of International Management. 27(4). p.100862.
Kano, L., Ciravegna, L. and Rattalino, F., 2021. The family as a platform for FSA development:
Enriching new internalization theory with insights from family firm research. Journal of
International Business Studies. 52(1). pp.148-160.
Meyer, K. E., Li, C. and Schotter, A. P., 2020. Managing the MNE subsidiary: Advancing a
multi-level and dynamic research agenda. Journal of International Business
Studies, 51(4), pp.538-576.
O'Higgins, C., Aramburu, N. and Andreeva, T., 2021. Managing international professional
service firms: a review and future research agenda. Baltic Journal of Management.
Pitel, N., and et.al., 2019. Managing Logistic System of an Enterprise in the Context of
Conducting International Business Transactions. TEM Journal, 8(3), p.888.

APPENDIX
 Do you think that Arrival had positive prospect for internalization?
◦ Yes
◦ No
 According to you, which market entry mode is good for the company?
◦ Partnership
◦ Licensing
◦ Direct expansion.
 What are the challenges' organization will face to internalize business?
◦ Language barriers
◦ Cultural barrier
◦ Lack of knowledge about business environment
◦ All above
 What are the ways that Arrivals use to overcome impact of internalization.
◦ Internal and external business environment analysis
◦ Team formation
◦ Both above.
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