INTERNATIONALIZATION WITHIN SMALL AND MEDIUM SIZED ENTERPRISES

1. SME’s DEVELOPING EXPORT MARKETS & INTERNATIONALIZATION GROUP MEMBERS: Sizwe S. Mike D. Gokul K. Jimmy Subhi p.

2. TABLE OF CONTENTS CONCEPT OF EXPORT MARKETS CONCEPT OF INTERNATIONALIZATION DEVELOPING SMS’S EXPORT MARKETS & INTERNATIONALIZATION CASE STUDIES (1) CASE STUDIES (2) ACTIVITY CONCLUSION

3. EXPORT MARKETS

4. MEANING OF EXPORT MARKET Send goods or services to another country for sale. Spread or introduce ideas and beliefs to another country.

5. CONTD… “Exporting is a key aspect of international trade and involves the sale, purchase or exchange of goods and services across national border” (Export Business Guide, YEAR) Global value: $12 trillion annually World trade is dominated by merchandise in the form of manufactured goods, minerals and agricultural commodities Export of services has been increasing (20%)

6. EXPORT MODES Direct exporting Indirect exporting Countertrade

8. Conduct research to find the right market.

9. Devise marketing strategies for target market.

10. Enter the market.

11. Get your product or service to market.

12. Explore financing options.

13. Understanding of legal and regulatory issues.

15. BARRIERS TO EXPORT Lack of knowledge of best potential markets 1 2 Lack of finances for market research 3 Lack of staff for export planning 4 Effect of strong foreign competition among others

16. INTERNATIONALIZATION

17. MEANING OF INTERNATIONALIZATION With reference to the process models of internationalization, Welch and Luostearinen (1988) define internationalization as “as the process of increasing involvement in international operations”

18. FORMS OF INTERNATIONALIZATION

19. ADVANTAGES OF INTERNATIONALIZATION Faster Growth Access to cheaper inputs Effect on performance of enterprise.

21. High cost of internationalized

22. Quality of firms products

23. Qualified personnel

24. Specifications of firm’s products

25. Language

27. Lack of public support

28. Lack of information

29. Laws and regulation in foreign countries

30. Cultural differences

31. Tariffs and trade barriers

33. INTERNATIONALIZATION WEB Educational background, networks, cultural values, foreign competitors, Language, Visits Attitude towards internationalisation. Acceptable/Willing Feasible SME OWNERMANAGER The Overseas/Global Market. Appropriate/Ready Finance, Skills, Core Competences, Products. Resource Base

34. ANSOFF GROWTH MATRIX

36. attractive profit/growth opportunities

37. ability to easily modify products for export markets

38. public policy programmes for export promotion

39. foreign country regulations

40. possession of unique products

41. economies from additional orders

42. Managerial elements:

43. presence of export minded manager

44. opportunity to better utilise management talent and skills

45. management belief in value of exporting

46. Reactive stimuli:

47. adverse domestic market conditions

48. opportunity to reduce stocks

49. availability of production capacity

50. favourable currency fluctuations (local made cheaper)

51. opportunity to increase the number of country markets and reduce market related risk

52. unsolicited orders from overseas customers.

53. MCKINSEY 7S FRAMEWORK Structure Strategy Systems Hard Elements Shared Values Skills Style SoftElements Staff

54. CASE STUDIES OF SMEs

56. Corporate leather gifts

57. Got unhappy with the Indian Suppliers

58. Established own manufacturing

59. 100% owned subsidiary in 6 months

60. 100 employees in first year

61. 33% growth in UK sales.

63. Products for the automotive interior sector

64. Global economic downturn, which reduced orders by 90%

65. New products – Help from UK trade and development(turn over increasing by 70%)

66. Won a major order to provide safety barrier nets, for a Swedish car manufacturer. (8m EUROS over 7 years).

67. Moving to aviation industry, with lightweight airline seat ( Russian Aircrafts)

68. 80% of annual turnover is from exports.( £2.35 m)

71. Invited for a tender for the whole hospital.

72. Competitive contract which won the order and different hospital contracts in Western Australia.

73. Demonstrated long-term commitment to its activities in Australia.

74. £ 400,000 worth contracts, which is estimated to increase by £ 3m

75. Expanding its services to other states in Australia.

77. ENTRY TO EXPORTS One of the first West Midlands Business to join the UK Trade & Investments Flagship Passport to export scheme. Access International Markets. Developing International trade potential. Access to Information, advise, Mentoring and Support from UK staff at home and overseas.

78. RACHEL DORMOR CERAMICS Based in Staffordshire University, Leek road business Village Sells to over 20 high end boutiques and Galleries in the UK Invited to exhibit at the New York gift fair by the craft council (OMIS) Overseas Market Introduction Service report show 12 Potential agents

79. DEVELOPING IN THE MARKET Trade show access programmes Buyers, agents, distributors, and customers Raising a companies profile and testing new markets Financial support and potential partnership opportunities

80. ACTIVITY 1

81. INSTRUCTIONS Divide: Students into 5 From your list, find the country that has the good that you need.(1-3 minutes) Form a circle and use the string to connect the first pair of trading.

82. CONCLUSION Identify you business needs and develop your companies export strategy Develop your export skills and cultural awareness Research on Market size and segmentation Regulation and legislation, customer need usage and attitudes, distribution channels, trends, competitor activity strategy & performance

83. REFERENCES Business Victoria (2008) Benefits of Exporting. Available at http://export.business.vic.gov.au/. [Last Accessed on 28th February, 2011]. Oxford Dictionary (2011) Meaning of Export. Available at http://www.oxforddictionaries.com. [Last Accessed on 22nd February, 2011]. Small Business Canada (2011) 10 Steps to Successful Exporting: Export Shipping, Financing & Regulations. Available at http://sbinfocanada.about.com/. [Last Accessed on 23rd February, 2011]. Export Reference Guide (2009) Opening Doors to Export connects you to world-class export assistance. State of Victoria, US. West Midlands Chamber of Commerce (2010) INTERNATIONALISATION SUPPORT FOR WEST MIDLANDS BUSINESS. Birmingham, Midlands. Czinkota, M.R. and I.A. Ronkainen. (1988) International Marketing. Chicago: The Dryden Press.

84. Welch, L.S and R.K. Luostarinen (1988) Internationalization: Evolution of a Concept. Journal of General Management. 14 (2) 36-64. Banerjee, D and Nikolaos, B (2010) Internationalization Process in developed and Developing Countries. Available at www.slideshare.net. [Last Accessed on 3rd March, 2011]. Ellis R. and Williams C. (1995) International Business. Pitman Publishing, London. Strategies for internationalisation within SMEs : The key role of the strategic leader and the internationalisation Web. Available at http://web.anglia.ac.uk/aibs/geru/CIB_publications/CIB_Paper5.pdf . [Last Accessed on 5th March, 2011]. Buckley, P.J. (1993) Barriers to Internationalization. Business and Economics. 79-106. Global Independence [Online]. Available at http://www.frontiernet.net/. [Last Accessed on 12th March]. Czinkot (2004) The Drive to Internationalize. The Export Marketing Imperative. Thomson Learning: Texere.

85. Ansoff, I. H. (1957) Strategies for diversification. Harvard Business Review, 35 (2), 113-124.