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Internationalisation for Growth


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Support presentation to the SPIN-UP Training Programme on Entrepreneurial Skills for University Spin-Offs.

SPIN-UP is a cooperation project supported by the European Commission that aims to create an Entrepreneurship Training and Coaching Programme that contributes to the development of Key Entrepreneurial Skills, both technical and behavioural, essential to enable and leverage University Spin-Offs growth.

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Internationalisation for Growth

  1. 1. templateversion1.0 INTERNATIONALISATION FOR GROWTH Module Presentation [Place], [Date]
  2. 2. | 2 TRAINING OBJECTIVES AND CONTENTS The SPIN-UP training in Internationalisation for Growth will help University Spin-Off’s managers to managers to improve the abilities needed to plan and act in a particular business growth strategy, namely oriented to foreign production, networks and markets, etc. Know the basics about business internationaliza tion Identify needs for internationalization and develop a strategy Decide on the best options and practice
  3. 3. | 3 TRAINING OBJECTIVES AND CONTENTS Recognize the importance of internationalization Understand drivers and types of internationalization Understand models, entry modes and integration Understand barriers to internationalization Know the basics about business internationalization
  4. 4. | 4 TRAINING OBJECTIVES AND CONTENTS Internationalization as a strategic option Incorporating internationalization in the strategy formulation process Internationalization and the Internet Identify needs for internationalization and develop a strategy Decide on the best time (‘readiness’) Decide on options in the Internationalization Plan (exports and outsourcing) Search for the best support. Decide on the best options and practice
  5. 5. | 5 TRAINING OBJECTIVES AND CONTENTS  Knowing the basics of internationalization  Identifying future needs and developing the strategy  Deciding on the options Learning Objectives Learning Contents Know the basics about business internationaliza tion Identify needs for internationalization and develop a strategy Decide on the best options and practice
  6. 6. | 6 WHAT INTERNATIONALIZATION IS  Extending business operations abroad  ‘Sophisticated’ definition: Innovative, pro-active and risk-seeking behavior that crosses national borders with the intention to create value  It encompasses: export, import, outsourcing/subcontracting, knowledge exchange, etc.
  7. 7. | 7 Push factors: - Limited home market - Fierce competition in home market - Skills that can be easily used abroad (without substantial extra costs) - Government export subsidies and support - Strong regulation in home market PUSH-PULL FACTORS APPROACH (1)
  8. 8. | 8 Pull factors (active attraction reasons) - Globalization and increasing liberalization of international markets (EU), advances in ICT and transport - Attractive foreign resources (cheap labor and raw material) - Attractive foreign partners (suppliers; large firms providing finance and market access) PUSH-PULL FACTORS APPROACH (2)
  9. 9. | 9 1. Stepwise model: the firm goes abroad if a well-established position gained in the domestic market (however, danger of competition capturing markets abroad) 2. ‘Born globals’: the firm goes abroad already during or immediately after establishment (based on existing research networks abroad, early international fair networks, etc.). Main driver: too small domestic market (niche) and a large investment size. MODELS OF INTERNATIONALIZATION
  10. 10. | 10 • Size of demand and of future demand (trends) (export) • Specific customer specifications and taste, including the need to adapt the product (export) • Price differences, quality level, logistics (export, outsourcing/ import) • Distance with the country/region abroad e.g. physical and cultural (export, outsourcing; import) • Differences in legal/regulatory circumstances, e.g. IP, risks in payment, etc. (export, outsourcing, manufacturing on-site) • Contact persons, networks to access the country (all activity) • Labor: staff recruitment (export, manufacturing on-site) MARKET/COUNTRY CHOICE
  11. 11. | 11 Indirect: without presence of the firm (works via representative/ agent) Cheap but less control! Direct: with presence of the firm in the foreign country (office/manufacturing plant) More expensive, but also more control over activities and better knowledge of local market demand ENTRY MODES
  12. 12. | 12 • Gaining access to networks and contacts in foreign markets • Navigating in unfamiliar business environments, e.g. due to language, (business) culture • Procedural barriers (standards, legal and regulatory framework) • Missing the capability to understand the competition and to assess potential opportunities and risks abroad • Short in confidence, management time and other resources to investigate and pursue opportunities in networks and markets abroad FIVE TYPES OF BARRIERS (UK 2010)
  13. 13. | 13 • Readiness includes specific conditions for take-off of internationalization set in place in the firm: • A product/service that is in demand abroad • Significant management time and commitment across the firm • Stepwise model: solid position in the domestic market (confidence, working capital) • Sufficient resources to succeed: travelling costs, product modification, international marketing staff, etc. • A solid Export Plan (strategy) • Export knowledge and skills (e.g. country profile, export documentation) • Access to trade networks arranged in the host country (e.g. distribution) • Benefits from support (e.g. export credit insurance) READINESS TO INTERNATIONALIZATION
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