International Management 2

What are we trying to achieve?
Why does an international presence make sense?
What pressures are companies facing?
What are the options?

Motivations to Internationalize
Traditional Motivators

• Secure key supplies
• Aluminum - bauxite
•  
• Tire companies - rubber plantations
•  
• Oil companies - oil fields
• Chevron video 
• Market seeking
• small home markets couldn't support volume of intense manufacturing process in food, tobacco, chemicals, & auto
• Access low-cost factors of production
• Chna labor cost increase 

Emerging motivators

• Production and operations
• scale economies
• ballooning R&D investments
• shortening product life cycles
• Global scanning and learning
• Competitive positioning

Prerequisites for internationalization

• Motivation - location specific advantages
• Strategic competencies - ownership specific advantages to couteract disadvantages of unfamiliarity
• Organizational capabilities - leveraging strategic strengths