Discuss the motivations means and mentalities of companies t

Discuss the motivations, means, and mentalities of companies that wish to expand their operations internationally. Include both traditional and emerging motivations. Describe the prerequisites that must be met for the means of internationalization. Discuss the four classifications of mentality.

Solution

Motivations to Internationalize

- Traditional Motivations
- Emerging Motivations

Traditional Motivations

- Need to secure important supplies
- Market-seeking behaviors
- Access to lesser-cost factors of production
- Innovation is the beginning point of internationalization

Emerging Motivations

- Enhancing scale economies
- Increasing R&D costs
- Reducing PLC
- Global scanning and learning ability
- Competitive positioning

The Prerequisites of Internationalization

1.) The capability to match or counteract the benefits of local competitors with certain unique strategic capability, like superior knowledge or skills (Technological), certain marketing competencies, and scale of economies in production,

2. The organizational ability to leverage its strategic assets more efficiently by its own subsidiaries than by licensing

Four Mentalities

International Mentality

International operations are outposts supporting to the domestic parent company (decisions are ad hoc, opportunistic approach, low \'psychic distance\")

Multinational Mentality

Increasing exposure in foreign environments (leveraging opportunities by understanding differences among markets & operating environments, being nationally responsive)- Driven by exposure of foreign markets and the growing importance of international sales and profits

Global Mentality

Aim is to maximize efficiency (standardization & central coordination, items for the world market, \"the same thing, the same way, everywhere\")

Transnational Mentality

Several host governments, began to put restrictions and increase demands on these organizations.MNEs recognized the need to be responsive to local market and political needs, while retaining global efficiency