Strategy development in international markets nine strategic windows

Strategy development in international markets: nine strategic windows © 2018 Taylor & Francis

Underlying assumption! Global industry structure International marketing strategies Firm resources © 2018 Taylor & Francis

Preparedness for internationalisation Two factors impacting on firm strategy Industry globality © 2018 Taylor & Francis

Industry globality © 2018 Taylor & Francis

Number of competitors in the industry Few Many Potentially global industry Global industry Trade and economic liberalisation may drive the industry towards global Large players operating on a global scale threaten SMEs in local markets. Global opportunities Multi-local industry Potentially global industry Few threats of global players entering the market. Local opportunities for SMEs Technological changes may drive the industry towards global Few Many Globalisation drivers Classification of industries © 2018 Taylor & Francis

Degree of specialisation Low Medium High International range of firm activity How to recognise industry structure? © 2018 Taylor & Francis Multi-local/global industry structure

Degree of specialisation Low Medium Global Potentially Multi-local global High Low Medium High International range of firm activity You will “always” find “all kinds” of players in an industry, but the emphasis shifts © 2018 Taylor & Francis

Globalisation drivers Technical and safety standards Converging cultures Trade barriers customs duties Purchasing practices © 2018 Taylor & Francis

Preparedness for internationalisation International organisational culture – International sales ratio – Operation mode Market share in reference market Even small companies may be global market leaders in their niche © 2018 Taylor & Francis

Country A Home Country C Country D Country B Multi-local Potentially global Global What is your market share worth in a globalising market? (or the importance of defining your reference market) © 2018 Taylor & Francis

Preparedness for internationalisation Child: No or limited exports Marginal position in international markets Limited insight into international markets Adolescent: Export to selected markets With a certain market position Increasing insight into international markets Adult: Heavily internationalised and financially strong Market leader in key markets In-depth insight into international markets © 2018 Taylor & Francis

Preparedness for internationalisation Ahold Nike France Deutsche Telecom Dressman Bank Jordan. Lenovo Yara. ABB Helly Haier Orkla Hansen Telenor Adult Adolescent Nordea Volvo Dn. B Child Local hairdresser Multi-local Potentially global Global Industry globality Nine categories of firms – examples of firms in the framework © 2018 Taylor & Francis

Preparedness for internationalisation Ahold Seekmarket new Strengthen Nike France Local Prepare for Market leaders in Adult Deutche business your global leaders in selected Telecom Dressman globalisation electronics, shipping, ship Bank Lenovo development position industries Jordan Yara ABB equipment Haier , pharmaceuticals, Helly branded goods Consolidate Orkla Seek Consider Hansen Telenor in existing global international Adolescent markets Service firms expansion Nordeaalliances Small specialised in fex construction Volvo firms in owners fex and restaurants; some new Seek nicheshi-tech in Seek. Dn. B/Nor offshore, manufacturing indu. Stay at extensive international. ICT, with etc. stries Local homelike fex, markets biotech, international Child hairdresser furniture networks Multilocal Potentially global Global Industry globality The nine strategic windows © 2018 Taylor & Francis

Preparedness for internationalisation Adult Child The multinational player The global market leader Limited Patchy investments in selected threats ofmarkets. Consolidation and globalisation “clearing up” drivers and selected opportunities Theofcareful multi- newcomer domestic Small steps in setting neighbouring markets. “The road is paved as you go. ” Securing market leadership through new product develop. Great ment and consolidation of relathreats, tions, brands and networks but also great opportunities of global. The bold newcomer isation The market isdrivers conquered in great leaps! Niches and niches. Networks, networks Global Multilocal Industry globality Four categories – four strategic windows © 2018 Taylor & Francis

Transaction cost economics Preparedness for internationalisation • . FDI and global management Well-developed internal capabilities High andand interdependent Transaction FDI global allow decisions based on rational Complex calls for more “holistic” analysis of alternatives. cost economics environment management theoretical explanations involving TCA, including its “half-sister” , FDI (OLI), Individual transactions without regard to the whole picture made network/alliance and organisational possible by industry multi-locality. capability theories. Incremental perspective Network Incremental internationalisation. Network • internation. Stepwise learning warranted to build • alisation Low internal capabilities. . perspective Access to partner resources critical to supplement own deficiencies. critical to pre-empt Stepwise entry made possible by. Waterfall entry Multilocal Global reaction from MNEs seeking global industry multilocality (limited opportunities. competitor reaction). Industry globality The relevance of theories varies © 2018 Taylor & Francis Source: Solberg and Askeland 2006