Internationalization

Internationalization Concept

Internationalization is a kind of strategy that consists on the products and markets transposition strategies and vertical integration for other countries, what can result on a total or partial replication of its operational chain.

The first decisions to take in the internationalization strategy are to where and how it will process.

In the case of how it will process internationalization, distinction should be made among the several types of internationalization possible:

• Transactions: consists on the commercialization of merchandises, services, patents and brands of the organization near the foreign entities (being, exports and licensing, where are included the franchising contracts) by other words, the internationalization strategies of the transactions type corresponds to the transposition for the exterior of the products/markets mold.
• Direct Investment: consist on the transposition abroad of part or the total organization’s operational chain that can assume the form of joint-ventures (of distribution, production or integrated) or the creation of branches or subsidiary organizations (of distribution, production or integrated).
• Projects: consists on the sharp and time limit involvement in projects abroad, like for example the temporary exploitation of entrepreneurial units and subsequent delivery to local companies upon a monetary compensation, or the participation in investigation and development partnerships.

As to the question to where internationalize, being, to the choice of the destination countries is necessary the analysis of several attractiveness factors, among which:

• Commercial factors, where markets’ dimension is included, income growth rate, populations purchase strength, existent distribution channels and correspondent costs, prices levels, consume habits, etc.
• Operational factors concerning legal and tax regulation, productive resources cost and quality, manpower qualifications and salary levels, customs barriers, etc.
• Risk factors such as exchange, political, social or even the risks associated to the possibility of retaliation from the local companies, etc.