International

Entrepreneurship
International Entrepreneurship

International entrepreneurship is the process of

dan entrepreneur conducting business activities across
national boundaries.
1. It is exporting, licensing, or opening a sales office
in another country.
2. When an entrepreneur executes his or her business
model in more than one country, international
entrepreneurship occurs.

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 Why go International?
• Increase in sales
• The Global market is a much larger opportunity
• Increase in profits
• Tough Domestic competition
• Diversification
• Economies of scale
• First mover advantages
• Foreign exchange
• Government incentives

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 Questions About
International Business

Different From Domestic

Business?
Strategic Issues?
Options Available?
Decision To Enter?
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 Looking at the Global
Marketing Environment
The International Trade System
 Tariffs, quotas, exchange controls
 World Trade Organization and GATT
 Regional free trade zones

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Goal 1: Understand how international factors affect marketing decisions
 Looking at the Global
Marketing Environment
Economic Environment
 Industrial structure
 Income distribution
 Infrastructure
 Monetary and fiscal policies

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Goal 1: Understand how international factors affect marketing decisions
 Looking at the Global
Marketing Environment
Political-Legal Environment
 Attitudes toward international
buying
 Government bureaucracy
 Political stability
 Monetary regulations
• Counter trade: barter, compensation,
counter purchase

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Goal 1: Understand how international factors affect marketing decisions
 Looking at the Global
Marketing Environment
Cultural Environment
 Impact of Culture on Marketing
Strategy
• Cultural traditions, preferences,
behavior
 Impact of Marketing Strategy on
Cultures
• Globalization vs. Americanization

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Goal 1: Understand how international factors affect marketing decisions
 Culture
Every body eats but what he eats and how he
eats differ from country to country.
Mexico –yellow flowers are a sign of death.
Hong Kong –white is for funerals.
Brazil –purple is the sign of death.
In Spanish language NOVA means it does not
move.
The average Frenchman uses almost twice as
many cosmetics and beauty aids as does his
wife.
Four is a number of death in Japan.

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 Challenges in International
entrepreneurship
Dealing with different currency
Dealing with different languages
Dealing with different cultures
Different economic environment
Different technological environment
Different political environment
International level Competition

It is important to conduct an environmental

analysis to identify the trends and changes
occurring on international level.

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 Questions About
International Business

Different From Domestic

Business?
Strategic Issues?
Options Available?
Decision To Enter?
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 Export Business
Before becoming involved in exporting, an
organisation must find the answers to two
questions:
1. Is there a market for the product?
2. How far will it need to be adapted for overseas
markets?
The product must possess characteristics that make
it acceptable for the market - these may be features
like size, shape, design, performance and even
colour. For example, red is a popular colour in
Chinese-speaking areas. Organisations also have to
consider different languages, customs and health
and safety regulations.

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 Standardisation
If a company offers a product, which is
undifferentiated between any of the markets
to which it is offered, then standardisation is
taking place. The great benefit of
standardisation is the ability to compete with
low costs over a large output.
The diagram below illustrates the use of a
standardised products and marketing mix:

Single product/marketing mix - Global

market

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Adapting the Marketing Mix
In most markets, however, there are many barriers to
standardisation. It is not difficult to think about the standard
marketing mix for a product and how this might vary from
one country to another.

For example:

product - tastes and habits differ between markets

price - consumers have different incomes

place - systems of distribution vary widely

promotion - Consumers' media habits vary, as do language skills

and levels of literacy.

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Adapting the Marketing Mix
With differentiated marketing, on the other hand, an
organisation will segment its overseas markets, and offer a
marketing mix to meet the needs of each of its markets.
The great benefit of standardisation is that costs are lowered,
profitability is increased and the task of supplying different
markets becomes substantially easier.
The diagram illustrates the process of adapting the marketing
mix to meet the needs of different geographical markets:

Marketing mix A -----> Region A

Marketing mix B -----> Region B

Marketing mix C -----> Region C

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However, it could also be argued that the success
of many products in international markets has
come about because marketers have
successfully adapted their marketing mix to
meet local needs.

To a large extent the standardisation/adaptation

dilemma depends upon an organisation's view
of its overseas markets and the degree to
which it is prepared to commit itself to meeting
the needs of overseas customers .

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 Questions About
International Business

Which Markets to Enter?

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 Deciding Which
Markets to Enter

• Screen and rank each of the

possible international markets
using several criteria
 Market size, market growth,
cost of doing business,
competitive advantage, risk
level
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Goal 1: Understand how international factors affect marketing decisions
 Questions About
International Business

How
to Enter the Market ?

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 Deciding How
to Enter the Market
Exporting
 Direct vs. indirect
Joint Venturing
 Licensing, contract manufacturing,
management contracting, joint
ownership
Direct Investment
 Assembly facilities, manufacturing
facilities
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 Five Modes of Entry
Into Foreign Markets

Indirect Joint Direct

Direct Licensing invest-
Exporting exporting ventures ment

Amount of commitment, risk, control, and profit potential

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