International Management: The pursuit of
organizational objectives is international and cross-cultural settings.
The Internationalization Process
There are many ways to do business across borders.
At one extreme, a company may merely buy goods from a foreign source, or, at
the other, it may actually buy the foreign company itself. Companies may skip
steps when pursuing foreign markets, so the following sequence should not be
viewed as a lock step sequence.
The Internationalization Process
Stage 1: Licensing
Authorizing companies in foreign countries to
produce and/or market a given product within a specified territory in return
for a fee
Stage 2: Exporting
Goods produced in one country are sold to customers
in foreign countries.
Stage 3: Local warehousing and selling
Goods produced in one country are shipped to the
parent company’s storage and marketing facilities located in overseas
countries.
Stage 4: Local Assembly and Packaging
Components, rather than finished products, are
shipped to company-owned foreign facilities for final assembly and sales.
Stage 5: Joint Ventures (also Strategic Alliances or
Strategic Partnerships)
A company in one country pools its resources with
another foreign company or companies to create and market products and jointly
share profits and losses.
Stage 6: Direct Foreign Investment
The production and marketing of products through a
wholly owned subsidiary in a foreign country involves cross-border mergers.
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