Risks and Rewards of Internationalization Essay

Risks and Rewards of Internationalization - Essay ExampleThey flummox to compete with local as well as foreign firms. Many firms are founding in the raw investment opportunities and new avenues of make by going international. Internationalization also brings a foresighted with it its fair share of challenges. Firms have to adapt readily in order to survive in the new world order. Internationalization has now become an important part of a firms strategy. It has become important to realize which strategies rear end be transferred abroad and what strategies are to be imported .Different markets pose different challenges, some of them whitethorn be solved by using global means whereas early(a)s need to be tackled through local strategies. In view of this glocalisation is the new term which has been developed by researchers. Ohame (1994) has claimed that glocalisation means thinking global and characterizationing local. (Hagiu, 2009) Although Internationalization has presented fi rms with numerous produce opportunities it also has presented various challenges such as an uncertain cultural, political and legal climate. The emerging markets such as India and China have unstable political and legal frameworks. It is difficult for firms to adjust to them and May sometime live to collapse of the internal organization. Consequently firms have to find the best possible alternative when going for internationalization. They have to decide whether they want to go alone or venture into a partnership. This paper will examine all such issues and the possible risks and rewards associated with internationalization. Internationalization Definition Internationalization in simple terms net be defined as the process through which firms identify the international markets which are lucrative for them and turn up to enter it. Internationalization as a strategy can be adopted by firms by either acting alone or by acting in collaboration with other firms. (Cavusgil, 2009) Firms which act alone usually set up subsidiaries in the market which they want to enter or they may even buy up firms which are already present in that market. An example of this technique can be seen when Vodafone entered the Indian market it bought a majority stake in the company Hutch which already had a presence in the Indian market. Most firms are wary to go alone in a new market and that too market of an emerging economy. So they prefer to partner with other firms and make a strategic alliance with one or more than one partners. These partners may be local business firms or multinational corporations who have been present in that market for a long time. E.g. Honda ventured in the Indian market by tying up with Hero the local Indian partner. (Fern&225, et al., 2005) slipway to Penetrate New Markets Different methods can be used by firms looking for internationalization of their business. about of them will be discussed here - Export Method This is the simplest method of enterin g an international market. This was the method utilized by firms in the times before globalization. Export method is also very relevant now if the international market is not promising enough and the sales number do not condone setting up shop in the country. The advantage of this method is that the firm does not have to earn up infrastructure nor does it have to partner with clients. (Jones, 2009)The firm simple pays the custom duty and its products enter the market. barely if the firm is looking to capture the market of the country export method is not a operable option unless you have an advantage which cannot be removed. Cases in point here