Internationalization Strategies
Internationalization strategies.
Internationalization refers to the channel in which an organization can gain access into a new market. This paper will focus on the various internationalization strategies that a firm can use to diversify its products and services.
Licensing
Licensing is whereby an organization charges a fee or royalty as a result of using its technology, brand or expertise (Friesner 2014). Licensing therefore involves giving a foreign organization the right to create a product in a foreign country at some fee. Although the licensing firm will therefore be able to cut a lot of costs, its overall profits will be limited to the fees collected from the local organization.
Franchising
According to Friesner, Franchising implicates that the franchiser provides branding, ideas, expertise, and other aspects needed for a firm to operate internationally, to the franchisee (2014). Management of these firms is usually controlled by the franchiser. Companies such as Domino’s Pizza, Coffee Republic and McDonald’s Restaurants have adopted this method of internationalization.
Turnkey Contracts
Turnkey contracts are key strategies that are used to construct large plants. Friesner points out that turnkey contracts often includes the training and development of main workers wherever skills are sparse (2014). A turnkey contract therefore, the client is usually left out of the construction process since the contractor is the one with the duty of handling all decisions and problems related to construction.
International Agents and International Distributors
A company can use agents and distributors as a strategy of entering an international market.
Organizations contract agents to market their products on their behalf in foreign countries (Friesner 2014). Therefore, agents do not have the real ownership of products but they are entitled to a commission on the goods that they have sold. Distributors are also similar to agents (Friesner 2014). However, the main
Internationalization refers to the channel in which an organization can gain access into a new market. This paper will focus on the various internationalization strategies that a firm can use to diversify its products and services.
Licensing
Licensing is whereby an organization charges a fee or royalty as a result of using its technology, brand or expertise (Friesner 2014). Licensing therefore involves giving a foreign organization the right to create a product in a foreign country at some fee. Although the licensing firm will therefore be able to cut a lot of costs, its overall profits will be limited to the fees collected from the local organization.
Franchising
According to Friesner, Franchising implicates that the franchiser provides branding, ideas, expertise, and other aspects needed for a firm to operate internationally, to the franchisee (2014). Management of these firms is usually controlled by the franchiser. Companies such as Domino’s Pizza, Coffee Republic and McDonald’s Restaurants have adopted this method of internationalization.
Turnkey Contracts
Turnkey contracts are key strategies that are used to construct large plants. Friesner points out that turnkey contracts often includes the training and development of main workers wherever skills are sparse (2014). A turnkey contract therefore, the client is usually left out of the construction process since the contractor is the one with the duty of handling all decisions and problems related to construction.
International Agents and International Distributors
A company can use agents and distributors as a strategy of entering an international market.
Organizations contract agents to market their products on their behalf in foreign countries (Friesner 2014). Therefore, agents do not have the real ownership of products but they are entitled to a commission on the goods that they have sold. Distributors are also similar to agents (Friesner 2014). However, the main