Internationalization Strategies

22,491 views

Published on

This is a project that I worked on with a group for my "Marketing Strategy" module in my masters of International Marketing and Communications. The main focus is on the process of internationalizing companies. This report answers the following questions:

- Is it necessary to go international?
- What are influential factors for internationalizing?

Published in: Business, Economy & Finance
0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
22,491
On SlideShare
0
From Embeds
0
Number of Embeds
10
Actions
Shares
0
Downloads
185
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide
  • 1 mars3 cases studies : context/ main issues/ how itwassolved > 3 slidesAt the end draw the comparative table (thisslide) wecan use otherscriteria to compare each cases (teacherlikethat). 3 parts Context/ management issues / solvingprocessesFor each cases select the trigger elementsTake the exemple of the cases seenbefore to draw conclusion. 15 mars Wereceivedanother hand out, organised the way of presenting the knowledge (prefer a global approach) And use the example of the cases studiedbefore to support ourpresentation and illustrateit. Need to convince the teacherthatwecanbetrusted : the waywegiveour information We are the consultancyagency.Only use the case information / becreative
  • Internationalization Strategies

    1. 1. Cases of Internationalisation<br />Valentine Bitouzé, Vanessa Levrat,Laura Perenz, Kristina Schweigert, Stephanie L. Webb<br />
    2. 2.
    3. 3. Company Context<br />Today <br /><ul><li>Leading commercial bank in Euroland
    4. 4. One of the world’s ten largest banks in terms of stock market capitalisation
    5. 5. In 2005: award as the world’s best global bank
    6. 6. Bank with strongest growth over the last 20 years</li></ul>How achieved?<br /><ul><li>Successive stages of growth with 2 waves of internationalization
    7. 7. Combining strong implantation in local markets with global vision and capacities
    8. 8. Knowledge of domestic markets, hiring local staff
    9. 9. Growth depending on 3 key factors:
    10. 10. Customers
    11. 11. Net profits
    12. 12. Stock Market Capitalisation
    13. 13. Flexible management model (seize opportunities for growth and value creation), with a constant focus on:
    14. 14. Clients,
    15. 15. Efficiency
    16. 16. Risk control
    17. 17. On-going restructuring</li></li></ul><li> PESTEL<br />Political<br /><ul><li>Entry of Spain to the European Economic Community (EEC)
    18. 18. Spain socialist Government liberalization of the country’s financial sector by various measures  deregulation
    19. 19. Spain’s Central Bank intervention to put Banesto Bank for auction</li></ul>Economic <br /><ul><li>Extreme competition in Spanish financial system (e.g. savings banks) </li></ul>  so cost reduction, operations systems improvement and innovation<br /><ul><li>Strong competition in EU and worldwide
    20. 20. Euro as the EU’s new single currency in 1999 </li></ul>  requirement of efficient and competitive financial institutions<br /><ul><li> General challenges faced by the financial sector: greater competition, slenderer margins, globalization+ need to adapt to increasingly complex customers needs</li></li></ul><li> Management Issues and<br /> Solving Process<br />Consolidation of domestic market (1984- 1994)<br /><ul><li>Goal: increase profitability rather than to become bigger
    21. 21. Objectives: consolidate and widen customer base on Spanish market through natural growth
    22. 22. Launch of massive advertising campaign: 11% interest rate
    23. 23. Internal growth: Acquisition of Banesto bank in 1993 </li></ul> now big enough to compete internationally <br />Expansion abroad  Latin America and Europe (1994-1998 and 1999-2004)<br /><ul><li>Aim: continue laying foundations of an international bank by diversifying its presence in South America and Europe
    24. 24. Knowledge of local markets (hiring local employees)
    25. 25. Diversification of activities on different geographic sectors
    26. 26. Many acquisitions and investments</li></ul>3) Purchase of Abbey National Bank (2004)<br /><ul><li>Improvement of commercial position (revenue & management efficiency)
    27. 27. Further geographical diversification (UK market)
    28. 28. Synergy arises from technology and business model
    29. 29. Business in 3 currencies (€, £, $)
    30. 30. Biggest bank in LA and Europe</li></ul>1) Deregulation of the country’s financial sector <br /><ul><li>Complete liberalization of interest rates and commissions
    31. 31. New legislation covering pension funds and plans
    32. 32. Reform of the stock market
    33. 33. Seen as a threat by the industry (higher competition)
    34. 34. Santander seized opportunity provided by de-regulation</li></ul>2) Euro as EU’s new single currency in 1999<br /><ul><li>New market: requirement of efficient & competitive financial institutions</li></li></ul><li>
    35. 35. Company Context<br />Founded 1996 by brothers Peter and Martin Groftehauge<br />Business sector: Service provider<br /> 1. Development of innovative IT solutions for the second hand market for automobiles <br />Vehicle valuation software<br /> 2. Assistance for sellers and buyers at online car auction<br />Customer groups: <br /><ul><li>Private
    36. 36. Business (car fleet owners, leasing firms)
    37. 37. Car dealers </li></ul>Benefits and advantages: <br />“Fast and Easy”, “Efficient” “Competitive”<br />PESTEL <br />Economical:<br /><ul><li>Second hand car market is very big and dynamic</li></ul>Sociocultural:<br /><ul><li>Sellers and buyers want to save time and resources, but still get a high reward
    38. 38. Need a secure and trustworthy trade platform
    39. 39. No big cultural differences</li></ul>Technological: <br /><ul><li>Wide internet penetration
    40. 40. Need for valuation software</li></ul>Legal: <br /><ul><li>European trade laws</li></li></ul><li><ul><li>Competitive advantage in core business
    41. 41. Customers not only active on the national market
    42. 42. Company’s structure ad-vantageous for internat-ionalisation
    43. 43. Economies of scale: More cars can be sold; more co-stumers won
    44. 44. Learning and knowledge sharing
    45. 45. CAGE framework</li></ul>Transnational Configuration<br /><ul><li>European neutral and independent e-marketplace
    46. 46. Functionally and technically identical active markets
    47. 47. Differences: languages and few market-related issues </li></ul>Foreign Direct Investment <br /><ul><li>New offices in countries of market activity
    48. 48. Websites for online car auction</li></li></ul><li>Problems & Suggestions<br />Problem<br />Focus on product development but not on organisational and market development <br />No business plan, but “learning by doing” philosophy<br />Solving possibilities:<br />Organisation and Markets should be focus, before further internationalisation<br /><ul><li>Financial capacity for future international expansion
    49. 49. People management
    50. 50. Networking </li></ul>Establish an active plan <br /><ul><li>Sweden and England need to be more efficient</li></li></ul><li>
    51. 51. Company Context<br /><ul><li>SAGEM  SAFRAN
    52. 52. Merge between SAGEM and SNECMA
    53. 53. SAGEM = broadband and mobile phone
    54. 54. SNECMA = leading aerospace manufacturer
    55. 55. Technological innovations / early movers
    56. 56. Structure:
    57. 57. China & Brazil  Software Development
    58. 58. Russia, India, Germany, France, & China  R&D
    59. 59. France & China  Production
    60. 60. Product Markets
    61. 61. Telephone
    62. 62. Multi-service networks
    63. 63. Defense and security electronics
    64. 64. Fingerprint biometrics
    65. 65. Avionics and on-board aircraft information systems
    66. 66. Global Positioning
    67. 67. Europe
    68. 68. Middle East
    69. 69. Africa
    70. 70. Asia (outsourcing for product production)
    71. 71. Latin America (central focus on Mexico)</li></ul>SAGEM’s strategy for entering Latin American market …<br />
    72. 72. Entry Barriers for New Markets<br />Competition – invitation to tender<br />Cultural aspects, management of local workforce<br />Geographic location – distance of the physical entities<br />Example:<br />Sales market  Mexico<br />Software Development  Brazil<br />Production  China<br />Taxation issues and negotiations with country and local governments<br />Market liberalisation<br />Import/export tariffs<br />Currency exchange rates<br />Consistently fluctuating  ‘What you pay today may be worth more/less tomorrow.’<br />Labor Issues<br />Consumer and community responses<br />Is/isn’t locally developed or manufactured  taking away jobs<br />Could unknowingly be providing funds for child/woman abuse<br />LINK – all of these factors should be considered when attempting to enter into a new market.<br />
    73. 73. Recommendations<br />Solutions<br /><ul><li>3 Tier System
    74. 74. Company Negotiations(short-term)
    75. 75. Change product to meet client demand  maintain client relationship or gain new client
    76. 76. Geographic Adaptation(mid-term)
    77. 77. Adapt process line to each geographic region</li></ul>Foreign-Domestic Investment (long-term)<br /><ul><li>Develop an entity in charge of Marketing, R&D, and Production for each geographic region</li></ul>Problems (assumptions)<br />Client accepts prototype and then asks for major changes to the specifications during/after production process<br />Lack of flexibility<br />Limited time to produce product.<br />Technological innovations<br />EXAMPLE:<br />Entering into the Mexican market<br />

    ×