Inter Nationalization Of Business Research

Internationalizatio n of Business

BY: Priya Chaudhary Roll no: ft-08-707 Sec:C

Internationalization of a firm Globalization – the growing integration of economies and societies around the world. It is widely seen as a dominating phenomenon of current century encompassing world wide integration of financial systems, trade liberalization, deregulation and market opening resulting in a global market and patterns of industrial development. In last few decades it is evident that firms and institutions from peripheral countries or developing world are making sustained and deliberate

 Globalization is quickly reshaping the international economic landscape, resulting in an increasing global supply of science and technology (S&T) resources and capabilities. China and India, for example, have taken their place as important players with a growing capacity for research and innovation

As global competition intensifies and innovation becomes riskier and more costly, the business sector is internationalizing knowledgeintensive corporate functions, including R&D. Firms increasingly offshore R&D activities to other countries to sense new market and technology trends worldwide. 

The firms from latecomer countries are making inroads in sectors such as manufacturing (steel and pharmaceuticals) and services (IT) and trading as well as hightechnology sectors like semiconductors. Some of the firms such 

Motives behind internationalization of  To improve global competitiveness  Acquisition of assets (including research and contract manufacturing)  To boost their outsourcing capabilities  To move up the value chain.  Improve their product offering and consolidate existing market shares.

Modes of internationalization of a firm can be: Merger &

Benefits & loss of internationalization of a firm Benefits:

R&D promises substantial benefits (cost efficiency, learning potential, etc.)

Loss: It also creates serious challenges for many countries (such as the loss of R&D jobs and knowledge)

Introduction:  The failure of managers to comprehend cultural disparities, the failure to remember that customers differ from country to country, and the lack of investigation into whether or not a market exists prior to market entry has made international business a risk activity  Differences between domestic and international research: a) new parameters (duties, foreign currencies, international documentation) b) new environmental factors (legal issues, cultural issues, political issues, technological level of the society) c) The number of factors involved like financial capital,advanced technology and managerial capabilities d) Broader definition of competition (much greater

RECOGNIZING THE NEED FOR INTERNATIONAL  Lack of sensitivity to differences

in culture, consumer tastes, and market demands

 Limited appreciation for the environment (Labour rules, distribution systems, the availability of media, or advertising regulations)  Lack of familiarity with national and international data sources and inability to use international data once obtained Research allows management to identify and develop international strategies (identification, evaluation, and comparison

Research is necessary for the development of a business plan that identifies all the requirements necessary for market entry, market penetration, and expansion

Research provides the feedback needed to fine-tune various business activities

Research can provide management with intelligence to help anticipate events, take appropriate action, and adequately prepare

DETERMINING RESEARCH OBJECTIVES Objectives will vary depending on the views of management,the corporate mission of the firm, the firm’s level of internationalization, and its competitive situation. Going International – Exporting; Cursory of general variables of a country, including total and per capita GNP, population figures. These details will enable the researcher to determine whether corporate objectives might be met in the market. Next Step, the researcher will require information on each individual country for a

Third, selection of appropriate market for in-depth evaluation Fourth, a competitive assessment needs to be made, matching markets to corporate strengths, and providing an analysis of the best potential for specific offerings

CONDUCTING SECONDARY Typically the information requirements will cover both macro information about countries and trade as well as micro information specific to the firm’s activities

Most critical International Information for the firms: q A) Macro data: tariff Information, export/import data, nontariff measures, foreign export/import data; and data on government trade policy q

B) Micro Data: Local Laws and Regulations, Size of the market, local standards and

c) Sources of Secondary Data:  International Agencies: United NationsUNCTAD, World Bank, IMF  Service Organizations: Banks, Accounting Firms, foreign Research firms, freight forwarders  Directories and Newsletters  Databases: on-line interactive delivery, read-only memory 

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Secondary data should be evaluated regarding the quality of their source and their relevance to the task at hand.

CONDUCTING PRIMARY RESEARCH  Typically primary research intends answer such clear-cut questions as:

to

 What is our sales potential, how skilled is the labour force, what will happen to demand if we raise the price by 10%? What effect will a new type of packaging have on our sales?  Determining the Research Technique: Selection of the research technique depends on a variety of factors: ¤ Objectivity of data, unstructured data, data collected in real world or controlled

Interviews 

Surveys must pay attention to cultural differences 

Focus Group (Collective Interviews) 

Observation 

Environment Scanning: necessity for tracking developments in the environment. Environmental scanning activities provide continuous information on political, social, and economic affairs internationally; on changes of attitudes of public