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Managing Internationalisation - Filip de Beule - Notes recordings -
Managing Internationalisation Notes recordings Filip De Beule MBA - International Business campus carolus boromeus
[Meer zien]Voorbeeld 4 van de 121 pagina's
Voorbeeld 4 van de 121 pagina's
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MANAGING INTERNATIONALIZATIONLES 1: 26 SEPTEMBER
WHAT IS THIS COURSE ABOUT, KNOW THE ANSWER TO THE FOLLOWING QUESTIONS?
• Whether and when to internationalize (timing and process – internationalization theories)?
• What do firms internationalize (activities on the value chain)?
• Where do firms internationalize to (location choice)?
• How do firms internationalize (entry modes)?
• Why do firms internationalize (motivations)?
Conclusion
• Give an in-depth answer on all these questions on the exam.
• Relate the theories and framework on the exam (ability to link to the cases)
• There is no ‘one best solution’. You should look for the best answer for the circumstances the
company is in.
• It depends, it is a contingency theory – there is now best way to organize a firm. It depends on
the industry or product and what type of firm you are.
o Don’t say “it is clear that they used this theory, it isn’t clear, explain this.”
LUTOSA POTATOES (VIDEO CASE)
= Belgian food company, specializing in potato products
= what should always be the case with segments (chilled, frozen, fresh)? Should not overlap.
HOW TO INTERNATIONALIZE AND WHERE?
You see
• How the product is distributed, the whole supply chain.
• The process/value chain: harvest - transportation - quality control - production - packaging -
customer support (?) - storage - retail - use by clients (retail solutions B2C (most of the time B2B)
− Very automated, very little labour.
− How did the SC work? Do you think Lutosa owns the agricultural fields? Contract farming –
Lutosa does the production itself but they don’t own the fields!
− The company has to decide which part of the value chain they do themselves and which not
− Value capturing in the value chain is very important
− Appropriate of value is a very important aspect
− You see a lot of segments as well, you should see these ones aren’t overlapping!
,Look at the website: what is essential with segmentation? They can’t overlap. Segments need to be
separate.
Organic – all of the other products can be organic as well – does not like this type of segmentation.
Clear that this is developed over time. Segmentation isn’t well done!
INTERNATIONALIZATION
Q1: Which product would you internationalize? AND WHY!! You’re world-famous in your own country,
now you must internationalize, pick the product which you feel have most potential -which one would
that be.
• French (Belgian) fries: easy to produce, known over all the world, global recognition. It is a
Belgian company so they should put it out there. Self-fulfilling prophesy, easy to use in marketing.
• Gluten free pasta made of potatoes (you will be the first one, first mover (new) - niche)
• Flakes -> dehydrated: easy to transport (think of shouldn’t be frozen) (used for mashed potatoes)
• Chips: important to mention the flavors (paprika, salt..).
Insights
• Look at the production cost, ease of logistics, ease of storage...
• When you internationalize are you going to export something existing or will you develop
something new - unique (product extension)
• When you have a product linked to the country ‘Belgian chocolates’, ‘Belgian beer’,… it’s a benefit
− You don’t have to convince people of the quality.
• The name of the product is also important, it should be appealing.
What is the best decision, there is no best decision! It can be something niche, but you must convince
people it is useful (think of gluten free pasta, are we waiting for this?), it requires research (both desk and
field).
In case of the chips, you have already big competitors. For example, play again with ‘Belgian Chips’.
TIP! Make a pro and con – also in case of exam.
Q2: Where would you internationalize this product to? In case of ‘Belgian fries’
• Western countries (but USA as well) – market size (product is well known)
▪ Hot countries in psychic! distance terms of distance: countries that are similar to the
country that you are from in terms of economy, culture and society. It has nothing to
do with climate but everything with the similarity of the economy and society.
• Countries with frozen infrastructure – where you can store frozen products (where it is commonly
used): UK, US, Scandinavia.
• United States fried things are popular there and this is a nice alternative for French fries.
Insights
• Characteristics that drive decision making
Neighboring countries
− It is easy.
− You know the local languages.
− Cultures are similar, they know the products.
, − Psychic distance = physical distances + cultural distances + legal distancing + …
→ the further away they are the bigger the distance and the more difficult it is.
▪ It can be an advantage too because you’re not a ‘local firm’ so you don’t have to
follow the local standard because you are new.
▪ Liability of foreigners: you don’t know the legal rules, what production facilities
should like, what the hygiene rules are… → it is often difficult.
▪ Do you choose a market where these products are sold a lot or not sold at all? First
mover advantage?
Biggest markets
Not the same as big country – cluster populations (population in a limited area). Distribution is not
easy for a large country in terms of geography, something you need to consider! Always a bit
population vs. size of the country.
Q3: How would you do that? Why so? Segments – supply chain
In case of Belgian Fries (frozen) to South America
• Replicate business model to South America = multi domestic strategy = repeat what you do here
in the country that you are going to (we assume that they have potatoes as it comes from South
America)
In case of Belgian fries:
• Exporting: product (to EU – countries close by ‘HOT’ countries (culture, society is similar there
and you can often follow an export strategy) or raw materials (Licensing: license to produce like
you did, giving the right to a company to produce – make Belgian fries according to your recipe
and specifications)
• Collaboration specific for United States. (for example, with restaurants)
In the US you often need a local partner to tackle the market. A US company does business with a
US company. As specially a retail store, if you are former, they are not going to deal with you.
That is a no go which will not work. NEED TO MAKE THOSE CONNECTIONS
EXPLAIN IN DETAIL HOW IT WOULD WORK ON THE EXAM.
Insights
• The entry mode is a very important decision.
− Sometimes a product is too difficult to transport so you choose to have a local production
facility. But this is very difficult.
• Competition is important, you should analyze it because there are different levels (local, regional,
national, international)
• The approach of which countries you pick is very important. You should be able to afford it, you
should understand the culture/political situation/…
From Lutosa to BELVIVA (feedback)
Clearly, they tried to internationalize the Belgian fries – changed the brand name for it.
Why would they choose Belviva rather than Lutosa? Tells two messages
1. Has the Belgian link there to some extend.
2. VIVA = healty lifestyle
, Got 2 ambassadors of the brand = Adil & Bilall – try to use these famous people to build a brand abroad.
Which can’t be underestimated! In China is this very important (famous people telling they use your
products)!
Q4: Would you internationalize mashed potatoes? Why? Why not?
• Why?
− Certain cultures could be sensitive to this type of product (potato – rice cultures) :
Combination with local foods – a lot of options
− Healthier, also often mixed with vegetables.
• Why not?
− Difficult: not well known, less attractive (compared to Belgian fries)
− Branding? – difficult to differentiate it is just pretty much ‘mashed potatoes’.
− Local competition
− Cultural difficulties: Asia 80% lactose intolerant (but there are alternatives, if you make them
using flakes you can make it with water as well)
• Where?
- Europe, ‘potato countries’ they have an appreciation for mashed potatoes, it is close by,
relatively easy to transport, you can produce here and sell there (think of the example of
Asia).
Analysis of a company’s potential.
Would you normally do is analyze a company’s
potential for certain countries. So you make for
instance certain categories which are essential, for
example:
- milk intolerance
- How many times do people eat that
- The packaging
ETC.
And then you see how it would fit with certain
countries, how certain countries would be more
fitting with a certain product – yes or no
Could be price policy, suppose that my assessment is
that potatoes countries are not the richest of contries.
If you want to put it in the market as a premium product, does that fit?
The people that might eat it, might be relatively poor while the people that you want to sell it to are
perhaps the relatively rich ones.
Q5: How would you internationalize mashed potatoes into China?
We don’t have a competitive advantage in Europe, because in Europe everybody has mashed potatoes –
so assume you can’t sell them in Europe. He is forcing us to go to China. Think about supply chain, where
are you going to produce it, how are you going to brand it, how am I going to put it into the market?
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