MGT4100 International Corporate-level Strategy Assignment Question | Middlesex University

Learning objectives

By the end of this topic, you will be able to:

• Examine the four international corporate-level strategies: multidomestic, global, transnational and international

• Evaluate international corporate strategy options

• Define: Small and Medium Enterprises (SMEs)
• There is not a single definition for SMEs

For example:

• According to the UN: less than 500 employees

• According to popular press: less than 100 employees

• In the United States, SMEs definition is more complex as these vary by industry, sales volume, number of people etc.

In what ways are SMEs important?

• SMEs represent over 98% of businesses in Europe, North America and Japan.

• SMEs produce nearly 50% of these countries’ GNPs.

• SMEs employ more than 50% of their local populations.

• SMEs create more than two thirds of new jobs in the United States.

What is SME Internationalisation

• Traditionally, SMEs remained confined to their national boundaries but this trend has been changing recently.

• In simple terms, SME internationalisation refers to the extension of SME operations to one or more international markets.

• Different definitions are suggested in the literature that focus on: business operations, networks, relationships and/or resources.

How do SMEs go international?

1) Stage Model (Cont’d)

Stage 1: Passive exporting

- Company fills international orders but does not seek export business. Do not realize they have an international market.

Stage 2: Export management

- Specifically seeking exports—usually rely on indirect exporting due to resource limitations. Exporting seen as an opportunity.

Stage 3. Export department
- Significant resources dedicated to seek increased sales from exporting. No longer see exporting as a prohibitive risk. Key is to find good local partner for distribution.

Stage 4: Sales branches

- High demand justifies setting up local sales office. Must have resources to transfer/hire local managers

Stage 5: Production abroad

- Move beyond downstream activities. Use licensing, joint ventures of direct investment.  Difficult stage because of the risk of failure

Stage 6: The transnational

- Develop global integrated network