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Chapter 1; Introduction export planning
1.1 internationalization of the organization:
Internationalization of the organization requires a clear strategic commitment and vision/mission of
the firm. The overall export planning process has four phases: Export policy, export audit, export plan
and export roll-out. Many companies start internationalization of their business during and after a
successful growth phase.
1.2 country position and market attractiveness:
Countries compete with each other on tourism, medication and health centers, logistic ports and
distribution, financial centers etc. Michael Porter presents six factors which lead to competitiveness
of nations:
1. Factor advantages; Basic: advantages like raw material, climate, location etc. Advanced:
modern telecommunication, modern infrastructure etc.
2. Type of domestic demand; refers to the structure of domestic demand and its focus, size,
growth pattern and availability of transfer mechanisms to other countries.
3. National competitiveness; the intensity of competitiveness, its number of competitors and
the framework in which competition takes place.
4. Network of internationally competing suppliers; allows for faster information input of new
technologies, insights and innovations.
5. Coincidental factors; unplanned occurrences, like strike, war, innovations, currency
changes exchange fluctuations.
6. Governmental policy; focusing on the first four factors to stimulate its economy.
To move up on the market positioning and market attractiveness ladder, countries have to work on
the aforementioned factors for competitive advantage. That is why a lot of countries try to create
centers of excellence for specific products or services (China=manufacturing and India=information
technology.
1.2.1 Internationalization equals globalization?
In the internationalization of companies there are four questions relevant:
1. What are drivers for companies to start export development and
internationalization?
The most common drivers behind companies’ international ambitions are:
- Market development as a strategy; when companies meet the maturity stage in their home
market, internationalization is needed to further grow the business)
- Need to follow its customer; refers to the demand / requirement of the company to follow
the customer abroad.
- Competition; enter a country to face its competitor’s internationalization efforts.
- Opportunities; external trends which offer market opportunities in certain countries.
, 2. Is internationalization similar to globalization?
Perlmutter described four different types of organizations that have a different
internationalization process. This model is called the EPRG model:
1. Ethnocentric organization; the organization is driven by its home market.
Decisions are taken based upon what is good for the home market.
2. Polycentric organization; the organization is locally oriented; each foreign country has
its focus on local culture and needs.
3. Region-centric organization; the organization focusses on regional market needs
instead of country needs.
4. Geocentric organization; the organization acts as a transnational organization. It views
the world as its marketplace and creates centers of excellence in these regions where
it makes the most sense.
Internationalization as a process is different from globalization. Globalization is the result of trading
on a worldwide scale. Internationalization can have its scope on a smaller scale, focusing on
international trade between certain countries. So, internationalization is a part of globalization.
3. What is exporting?
Exporting means marketing, selling, and distributing goods or services from one country to
another country or countries. It includes importing and reselling goods or services as well.
4. Is exporting the same as international marketing?
International marketing basically only covers the marketing part. However, the last few years
international marketing has more or less bean treated equal to exporting and export management.
Therefore, we treat it the same. However, be aware that international marketing covers the relevant
marketing aspects for all types of internationalization according to Perlmutter, contrary to exporting
which focuses mainly on the ethnocentric a polycentric types.
1.3 Export policy:
Many companies start exporting products and services without even considering putting together
a program for export development, which often results in an exporting landscape with non-
priority countries, together with a portfolio of unwanted agents and distributors. The approach
we use to execute a systematic strategy formulation and decision making process is the
international strategy definition process, or the export policy process. The export
policy/international strategy definition process consists of the following elements; Vision/Mission,
Export planning, resource allocation & SWOT.
