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Internationalization

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The process of Internationalization can be described as “the process of increasing involvement in international operations”. (Welch and Luostarinen, 1988). The process essentially involves the adaption of firm operations like strategy, structure, resources etc. to perfectly fit the international environments. Furthermore, the degree of internationalization can be measured as foreign sales relative to total sales. (Welch and Luostarinen, 1988).

 

The goal of the Internationalization process is to have a pronounced global presence in an attempt to keep abreast with their competitors, to generate improved profitability and be known as a multinational; a sure sign of success and credibility. The process typically entails generalizing a product to counterbalance and efficiently expedite the subsequent localization process. The result is an improved quality product as well as reduced localization costs and time to market. The internationalization process may involve the following tasks:

 

  • Reduce surplus or repetitive text.
  • Modify and/or settle on a final text before the localization and translation process.
  • Application of standard language/nomenclature.
  • Creation of a glossary containing original, technical or perhaps unclear terms.
  • Implementation of a coherent writing style.
  • Adherence to grammar rules
  • Flexible layouts that fit right-to-left or top-to-bottom scripts
  • Application of programming tools that support foreign language character sets. (RFIDwizards, 2007).

 

Several theories have been postulated over the years to maintain and enhance the essence of the process of internationalization. According to the theories of the stage model; the process of internationalization may be successful if a specific prescribed path is followed. Strategic decisions that the firms have to face play a vital role in validating the above assumption.

 

The internationalization process is described as a gradual development taking place in distinct stages (Melin 1992). The process can be clearly identified under two major schools: (1) the models initially developed by Johanson and Wiedersheim-Paul (1975) and Johanson and Vahlne (1977), referred to as the Uppsala models (U-models); and (2) the Innovation-Related Internationalization Models (I-models) conceptualized by Cavusgil (1980). Both the I-model as well as the U-model emphasizes on firm’s involvement in foreign market segments. The U-model describes the process as "a gradual acquisition, integration and use of knowledge about foreign markets and operations and a successively increasing commitment to foreign markets” (Allbusiness, 2000). The strategic choices under the U-model are influenced by many factors which include certain aspects which either help in or suppress exports, information requirements and collecting informational data, foreign market selection and entry (including the effects of cultural distance), expansion, and marketing strategies (Leonidou and Katsikeas 1996).

 

Due to the various factors involved, it is rather difficult to accurately assess this model. In Cavusgil's I-model, the involvement of exports is operationalized by the ratio of sales/export, which in turn indicates a firm’s reliance on foreign markets.

In the process of internationalization; market knowledge is gradually increased and the company gets a clear picture over time, reducing the involved uncertainties. Different companies gather a different approach but with a similar objective in mind. If the process of internationalization is relatively slow, it is primarily because companies either want to avoid risks or are unable to gather relevant or enough knowledge and information.

 

References

 

Karlsen, Siv Norwegian School of Management (2007)The Pace of Internationalization of SMEs – Born Global vs. Gradual Global”

Available from: http://www.oks.hio.no/ou/fagseminar/artikler/ sivmarina-karlsen.doc  Accessed: 10/25/2007

 

Snuif, Henoch R, Journal of Small Business Management (2000) “The Internationalization Process of Small and Medium Sized Enterprises: An Evaluation of Stage Theory”

Available from: http://www.allbusiness.com/management-companies-enterprises/654394-1.html 

Accessed: 10/25/2007

 

Nemec, Lauren, Translatus Inc (2007) “The steps to foreign market entry”. Available from: http://rfidwizards.com/index.php?option=com_content&task =view&id=194&Itemid=168 

Accessed: 10/25/2007

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