Internationalization of Companies
Internationalization is increasingly recognized as a necessary and extremely valuable strategy as it is related to the agents involved in globalization.
Internationalization occurs when a firm carries out activities beyond the geographical limits of its country of origin , constituting a process of great importance to multinational companies, as it allows them to use new distribution channels, have access to various raw materials and share the risk of operations with other markets.
Internationalization allows the company to explore better and reap the benefits of innovation present in the company's operations, generating several benefits for the organization. It can also present advantages for the diversity of environments in which it operates and cost advantages, as it has a larger volume of operations and greater ability to cope with economies of scale. One of the advantages is the presence of companies in several countries, with a great capacity to make larger investments in manufacturing plants by generating activities that create value in different locations.
Companies create different strategies for their internationalization plan, to generate economies of scale, expand and diversify their market, achieve efficient use of resources, control political and financial risks. In search of a market with new final consumers, natural resources, efficiency, global value consolidation and knowledge, its how tend to expand.
A very important objective for companies with the international expansion plan, is to have access to new knowledge and specific assets of their destination locality. Internationalization allows the company to acquire new learning to satisfy the customers need, and to respond to their competitors in foreign markets.
In the process of internationalization, additional knowledge is acquired and can be used to develop new products and technologies, improving brand image not only in the foreign market, but also in the main market.
Investing in foreign countries is a process that involves several and parallel activities, including the decision making by the company professionals. This professionals should analyze when its the best moment to continue the process and destination of expansion. Considering that there's some factors (such as organizational structure and the area where the company operates), they can adopt different internationalization strategies.
Once the company is established in the new country, the managers must know how to work in different markets and add value to new stakeholders.
The internationalization is being more explored in these recent years. The concept of internationalization speed refers to the time taken for the international expansion of a company and the relationship between the process and time. This process is not a uniform phenomenon: a great internationalization does not necessarily mean a better global orientation. The Research and Development (R&D) degree is a predictor of the company's level of internationalization and is recognized as an important strategy for companies to promote their technological capabilities and result in better competitive advantages.
Successful multinational action based on striking a balance between absorbing competitive advantages in the marketplace, while integrating the best of local resources and competitive circumstances to leverage these core competencies for maximum strategic effectiveness. Understanding these actions demonstrate the relevance of internationalization to corporate performance.
Source: Companie's Perfomance on the Internationalization Process