To grasp company strategies for sequencing the penetration of countries
To see how scanning techniques can help managers both limit geographic alternatives and
consider otherwise overlooked areas
To discern the major opportunity and risk variables a company should consider when
deciding whether and where to expand abroad
To know the methods and problems when collecting and comparing information
To understand some simplifying tools for helping to decide where to operate
To consider how companies allocate emphasis among the countries where they operate
To comprehend why location decisions do not necessarily compare different countries’
Location, location, location
Companies lack resources to take advantage of
all international opportunities.
Companies need to:
order of country
In choosing geographic sites, a
entry. company must decide:
Set the rates of
resource Where to sell. Where to produce.
aids managers in considering alternatives that might otherwise be
helps limit the final detailed feasibility studies to a manageable
number of those that appear most promising
Escalation of Commitment
Scanning for Opportunities
Sales expansion - Economic and Demographic Variables
Factors to Consider in Analyzing Risk
perceptions of risk | opportunity | how to reduce | trade-offs
* See the Disaster Risk Index: http://www.nat-hazards-earth-syst-sci.net/9/1149/2009/nhess-9-1149-2009.html
Collecting and Analyzing Data
gains or cost
Some Problems with Research Results and Data
Inaccurate Info Noncomparable Info
• The amount, accuracy, and • Managers should be
timeliness of published data particularly aware of
vary substantially among different definitions of
countries terms, different collection
methods, and different base
years for reports, as well as
Image sources: http://aznmusic.files.wordpress.com/2008/01/chinglish.jpg; http://www.flickr.com/photos/thebusybrain/249294562 5/
External Sources of Information
Allocating Among Locations
Reduce the risk of liability of foreignness by moving first to countries more similar to their
Contract with experienced companies to handle operations for them, limit the resources they
commit to foreign operations, and delay entry to many countries until they are operating
successfully in one or a few.
The Usual Pattern of Internationalization – Gradual Commitments
Geographic Diversification versus Concentration
Strategies for ultimately reaching a high level of commitment in
many countries are:
• Diversification—go to many fast and then build up slowly in each.
• Concentration—go to one or a few and build up fast before going to others.
• A hybrid of the two.
To Diversify or to Concentrate: The Role of Product and Market Factors
Reinvestment Versus Harvesting (Divesting)
A company may have to
make new commitments
Companies must decide
how to get out of
They no longer fit the overall
There are better alternative
Noncomparative Decision Making - one proposal at a time
Companies may need to:
Proposal • react quickly to
Proposal A proposals
• respond to competitive
C • because multiple
feasibility studies seldom
Burger King Beefs Up Global Operations (p465-470)
1. By mid-2009, Burger King was not in any of the following five countries: France, India, Nigeria,
Pakistan, and South Africa. Compare these countries as possible future locations for Burger King.
2. When entering another country, discuss the advantages and disadvantages that an
international restaurant company, specifically Burger King, would have in comparison with a local
company in that market.
3. About two-thirds of Burger King’s restaurants and revenues are in its Americas region (United
States and Canada) and one-third elsewhere. Should this relationship change? If so, why and
4. The case mentions that Burger King prefers to enter countries with large numbers of youth and
shopping centers. Why do you think these conditions would be advantageous?
5. How has Burger King’s headquarters location influenced its international expansion? Has this
location strengthened or weakened its global competitive position?
6. Evaluate Burger King’s strategy of using the Brazilian experience to guide its entries into Russia.
review Chapter 12
do quiz (Blackboard)
read Chapter 13 – Export/Import
read/be prepared to discuss p499-
A Dirty Dilemma: Exporting