WHY do business internationalise

1149 Words Mar 27th, 2014 5 Pages
Module Code: MKIB 225
Module Title: International Business
Essay Title: Why do business internationalise?
Student ID: 200992874
Module leader: Dr.Clases Belfrage
Date of Due: 9am ON Thursday 6th of March, 2014
Word Count: 988

Why do business internationalise? The business internationalise means a company’s production and business activity are not only confined to one country, but also integrate the different countries’ raw material and labour and technologies to produce products and sold to multi country. The primary purpose of business internationalise is seek a wider range of competitive advantages and integrate resource in order to profits maximization. The Internationalization motives include three
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In addition, the internationalisation is the strategy to occupy the foreign market step by step. Also, the porter’s competitive advantages theory is to analysis the strategies of global business. They could divide to three strategies: over cost leading, diversity, and market focus strategy (Passemard& Calantone, 2000). The cost leading strategy focus on establish efficient scale production facility and minimize the research and advertising cost. The diversity strategy focus on introduce some unique product in whole industry. But, this strategy will with a high cost price. The focus strategy is attack of a particular customer group or specialist regional market, its purpose to design the service for a particular target. Consequently, the companies need to consider the internal and external factor condition, such as: factor condition, demand condition, related and supporting industries condition, and firm strategy and rivalry. They are called diamond system. This dynamic system gives the company a standard to measure theirs advantage and disadvantage before they enter foreign market. Moreover, the specific advantage in Internationalisation of Production is give companies a new choose for exhausted market (Strange,S. 1992). In an international environment, the companies will face more uncertain and unequal condition than home market, therefore the companies need keep the attention of more factors:

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