International Entrepreneurship

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01) A multinational corporation is a business that operates in more than one country. Types
of international strategies are global strategies, international strategies, transnational
strategies, multi-domestic strategies. Like many other organizations MTV networks also
moved into international market with expectation of huge growth. MTV is an American cable
television station that debuted on August 1, 1981. It is the main product of ViacomCBS
Domestic Media Networks' MTV Entertainment Group. It is based in New York City. They
use global strategy to enter foreign market, in here local responsiveness is low and global
integration is high. The degree to which a firm may employ the same goods and techniques in
different countries is known as global integration. The degree to which a company's goods
and procedures must be customized to match conditions in other nations is known as local
responsiveness. Global strategy necessitates a high level of control, centralized operational
authority, a strong organizational culture, and a global product division structure.

When MTV go to foreign market initially use the same music videos and programs in
worldwide. They not concern different country customers’ different preferences. Country to
country, region to region customers’ taste is different. According to their living culture they
taste unique music type. But, MTV apply American style pop music for all country. In initial
stage MTV not differentiate product and services according to different customer expectation
in different culture and country. They introduce same products and services to other countries
as well that produce for American local market. This global strategy was failed and finally
they identified there are some issues with their selected international strategy.

As example when expand their business activities from American market to European
country, they not identify those countries’ different choices, not study about their cultures,
content, music style and how they taste music, etc. Finally, network officials understood that
transmitting the American stream to Europe would be ineffective. MTV would not be
effective in this new market since Europeans had very different musical and aesthetic
interests. MTV Europe, on the other hand, was created as a pan-European network that spoke
directly to European markets with European music style.

In 1999, MTV India attempted yet another unsuccessful launch. MTV India's founders
thought it was past time to introduce Indian adolescents to different types of music when the
channel first launched. Local music, cinema, and Bollywood culture have dominated the
country's popular culture for decades. Therefore the management understood the channel

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failed with international programming. MTV India failed to grab the attention of Indian youth
under this direction. MTV couldn't ignore the fact that traditional culture is deeply ingrained
in Indian popular culture. MTV India began to lose money from advertisers as a result of not
attracting their target audience, and was forced to modify the format. MTV India rebooted
less than a year later, adopting the vibrant tones and style of Bollywood cues.

After they faced issues and failures with their selected international strategy, understood
should change their international strategy. And understand they should differentiate their
product and services according to the cultures, different music preferences and taste in
various country. They moved to transnational strategy by balancing the global integration and
local responsiveness. This strategy has high global integration and high local responsiveness,
some decisions are centralized and some are decentralized, high need for coordination,
economies of scale and location economies. A transnational strategy tries to achieve a
balance between a multinational and a global approach. A firm like this seeks to find a
balance between the need for efficiency and the need to adapt to other cultures' tastes. MTV
captured learning and experience regarding various countries different preferences and taste
of music. Now they can protecting their domestic strategies also according to various country
expectations they doing some changes and satisfy those customers. MTV has lately begun to
examine concepts created by its national subsidiaries to determine whether they might be
used worldwide. It moved away from its standardization and introduced different music
videos and programs to different market with different channel such as MTV India, MTV
Canada, MTV Japan, etc.

Every market is unique and necessitates a unique strategy. Every overseas station, to some
extent, faces the same challenges that MTV did on its way to the top of American popular
culture. MTV International may form collaborative ventures with other existing television
networks in order to smooth the move into new markets. MTV and NBC Networks formed a
strategic partnership in 2000 to create a 24-hour terrestrial service in the Philippines. MTV
has a greater chance of succeeding with less early experimenting by using NBC's
understanding of the Philippine television market. MTV will provide its unique programming
output, while NBC will give its experience of the Philippine market, national distribution, and
operational skills. In the Philippines, MTV and NBC will establish a powerful collaboration.

Also MTV adopt Glocalization strategy, this refers to the localization of internationally
advertised products and services. A worldwide product or service, which everyone requires

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and may benefit from, may be customized to meet local laws, customs, or customer
preferences. By definition, "glocalized" products will be of far higher interest to the end user,
or the person who will utilize the product. This is because, while it is something that anybody
can use and benefit from, its localization makes it more personal to an individual, their
context, and their requirements.

MTV should improve its current state by acquiring or partnering with more music and film
sites in order to adapt to the Internet's new technology and revolution, which will help it gain
a decent share of the social networking arena; it should also make good use of outsourcing
content for local businesses, which is a risky but effective strategy. When a
globalized product tries to enter new market, a universal fact holds that it must meet local
conditions, and customers' different taste. In the foreign market MTV achieved a huge
success by adopt effective international strategy.

02). i). Globalization refers to the trend towards a more integrated global economic system
with globalization of market and globalization of product. It is a force that is reshaping our
modern world, with implications for business, the environment, and society. As
manufacturing processes grow more distributed throughout the world, information, material,
and money flows connect suppliers, businesses, and consumers. Globalization is a continuous
process that is bringing people, communities, cities, regions, and countries closer connected
than ever before. As a result, the food we eat, the clothing we wear, the music we listen to,
the information we get, and the beliefs we hold have been linked with individuals all over the
world. Globalization can impact for businesses by positively and negatively. In the world
economy today, we see fewer self-contained national economies with high barriers to cross-
border trade and investment, a more integrated global economic system with lower barriers to
trade and investment, the establishment of international institutions.

Development of technology - Globalization has resulted in a considerable increase in the

amount of technology in use today. Many entrepreneurial and globally focused businesses
have used technology to assist them take advantage of new business possibilities. The rising
use of E-commerce procedures in the majority of organizations is an excellent example of
this. It has enhanced the overall quality of technology by increasing the pace with which it is
transferred. Most businesses in capital-intensive sectors are vulnerable, which is why they
require effective technology and R&D management. Lenova, a Chinese computer
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manufacturer, purchased IBM's PC division in order to help the firm become a worldwide
player. The ThinkPad is developed in the United States, but built in Mexico using parts
sourced from Thailand, Malaysia, and South Korea. Particular nations have a comparative
advantage in the manufacture of certain items due to variations in factor costs. Lenova
assembles the ThinkPad in Mexico since the company's executives determined that assembly
costs may be reduced their owing to cheap labor prices. If not there Globalization, the
company wants produce all parts required to produce computer by themselves. It is very
difficult task. May be they not have enough resources, knowledge, skills to produce all parts
in efficient and effective way. With globalization businesses can outsourcing, assembly and
operate businesses smoothly with cost effective way.

Employment - People from diverse nations are given work as a result of globalization. It was
also responsible for the invention of outsourcing. Work in areas such as software support,
marketing, and accountancy, to name a few. Lenova company managers think that U.S.
people contribute more value to the product through their marketing efforts than personnel
stationed other country, therefore they design the marketing and sales plan for North
America. The globalization allows businesses to cater skilled employees in worldwide with
low cost.

Access to New businesses - Globalization makes it easier than ever to access foreign
culture, including food, movies, music, and art. And globalizations overcome the

geographical barriers over the country. It will influence to start new businesses.
Competition - Globalization has increased competition in businesses. The competition can
arise with cost of production or price, target audience, adaptation of technology, etc. If
company can produce their products and services with less cost it will lead to increase its
market share, revenue and profit. Because of competition growth like Lenova Company and
others are trying to improve standards, reduce time consuming activities by adopting new
technology, customer satisfaction, cater competitive advantages than competitors, etc. And
those are positively affected many people globally.

Globalization will positively and negatively effect for businesses. It increases the movement
of products, services, capital, people, and ideas across international borders. Business has
grown increasingly global as technology and transportation have evolved, in addition to new
problems and geopolitical conflicts.

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ii.
In the PC industry, Lenova has significant competitive advantages over its competitors,
including a broad distribution network and the potential to extend its presence in new regions.
Lenovo used strategy to become globally success business is Lenova produces and gets
components from the most cost-effective place. The components are then shipped to a
Mexican assembly plant, which assembles the product before sending it to the United States
for ultimate sale.

The ThinkPad is developed in the United States, but built in Mexico using parts sourced from
Thailand, Malaysia, and South Korea, etc. Particular nations have a comparative advantage in
the manufacture of certain items due to variations in factor costs. Those countries specify
with produce those components, import component from various countries and assembly in
one place is more advantage for company, because it leads cater cost advantage and
competitive advantages.

The ThinkPad is assembled in Mexico because Lenova's executives determined that assembly
costs may be reduced their owing to cheap labor prices. Outsourcing manufacturing is
employing individuals from outside the firm to put together pieces of a product or construct a
whole product. The primary motivation for businesses to do so is to save money. Labor is
frequently one of a company's greatest expenses. Outsourcing sections of the manufacturing
line to a third party at a lower-cost region reduces production expenses significantly.
Outsourcing manufacturing processes to firms with a competitive edge in that area is more
cost effective than producing them internally.

Lenova Company maintains better customer relationship. They also satisfy customers’
different needs and wants with accepting unique orders and adopt to newest technology
quickly. When company reduced its cost of production organization profitability will
increase. It is advantage for organization success as global venture. Also organization can
provide a superior service to their customers and fair price. Customer satisfaction is essential
for establishing a long-term relationship with your clients. However, maintaining a long-term
connection is difficult. It's important to maintain giving value over and over. Consistent
pleasure breeds loyalty. Customers will continue to do business with a firm if they have put
their faith in it and are certain that it will deliver.

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Lenova Company has ability quickly satisfying customers’ needs with their import, assembly
and manufacturing process. If they produce all component in-house, it will generate more
cost and time consume. Another strategy that company used to become global venture is used
skilled people to do marketing and sales activities. Workers in the United States design the
marketing and sales plan for North America, because management think that U.S.
professionals contribute more value to the product through their marketing efforts than
personnel located other country, owing to their understanding of the local marketplace.

Lenovo is a leading company that makes computers, cell phones, TVs, and wearable
technology. With above mentioned strategies Lenova company has become success global
venture.

03.

i.
Globalization allowed organizations to overcome the cross national boundaries and operate
their business in abroad. For international strategies are Global strategy, International
strategy, Multi-domestic strategy and Transnational strategy. Selecting the best strategy is
important for success in the international market. Two
criteria of local responsiveness and global integration
will lead how organization selects strategy. Local
responsiveness is the level the organizations need to
tailor their product to meet other countries needs and
wants. Global integration is the level of ability to use
standardized product and methods in other countries.

Global Strategy – They provide a globally standard product and strive to maximize efficiency
in order to reduce costs as much as feasible. Global corporations are extremely centralized,
and subsidiaries are frequently reliant on the corporate headquarters. Their primary function
is to carry out the parent company's choices and to serve as product and strategy pipelines.
Pfizer and other pharmaceutical businesses are examples of multinational corporations. Also
McDonalds are using this global strategy, same products offer other countries as well.
According to the different countries different culture, do some changes to their products. As

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example, McDonalds serves no beef burgers in India. Even if it is new and small organization
they can also enter to the international market by use this global strategy.

International Strategy - This approach is also known as an exporting approach. Products are
made in the company's native nation and shipped all over the world to clients. Examples are
international firms include large wine producers from nations like France and Italy. This
strategy selected organizations have no plans to grow internationally, although it does export
some items to capitalize on foreign prospects. As example, Sri Lankan batik clothes
producers can just export their quality products as it is. People who are like Sri Lankan
culture and clothes buy those products. This strategy is cost effective way and make
advantages. Because, they do not change their products when export country to country.

Multidomestic Stategy – This approach tailors goods or processes to each country's unique
circumstances. Lincoln Electric should have utilized a multidomestic approach to tailor its
production processes to the conditions in each nation where it constructed facilities. A firm
that employs a multidomestic approach is 7-Eleven. Its product selection, payment methods,
and marketing are all tailored to the values and rules of each nation in which it operates. At
Japan, for example, 7-Eleven customers may pay their electricity bills in the store. Country
managers are allowed leeway to make changes. Companies give up scale efficiency in order
to be more sensitive to local situations, because nation managers are familiar with local laws,
cultures, and preferences and can determine how best to cater to them.

Transnational Strategy - Corporation combines the features of both a global and a

multidomestic corporation. Its goal is to increase local responsiveness while also gaining
advantages from global integration. This strategy difficult to adopt small or newly start
businesses. It is better if they go to the global and international. Even though it appears to be
impossible, it is entirely achievable when considering the entire value chain. Transnational
corporations frequently attempt to achieve economies of scale higher up the value chain
while remaining flexible and regionally adaptable in downstream operations such as
marketing and sales. The Ford Motor Company is pursuing a global strategy. Ford is
developing a "global vehicle" with numerous common platform features that may be
customized. Also Unilever is one of company that adopts this strategy.

When all of this is considered, there are several options for entrepreneurs to do business
internationally. Multinational firms or corporations are referred to as such when they have
economic operations in at least two nations.

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ii.

Before organization go to the international market should consider the distance dimensions.
There are four dimensions, cultural distance, geographic distance, economic distance and
administrative distance. Klazee is ladies apparel manufacture in Sri Lanka. When
organization going to expand business into South Korea and Germany should consider those
factors and plan how to conduct operations and how to differentiate product.

Under the cultural dimension should consider different language, ethnicity, religions, social
norms, believes, social networks, indigenous clothing style, etc. South Korea and Germany
has different culture. The Chinese and Japanese civilizations have had a significant impact on
Korean culture. Buddhism is the most popular religion in Korea, and its teachings have a
significant influence on Korean culture and lifestyle. The hanbok is worn by Koreans for
formal and semi-formal occasions such as festivals, celebrations, and ceremonies. Normally
Korean women are wearing long, baggy or loose dresses. Therefore should design clothes
match with those ethical, tradition styles and religion view. But, Germany women are
wearing more stylish, short and sleeveless clothes. Rather than skirts or dresses, most women
opt for trousers or jeans. A pashmina is a versatile accessory that may be used with any outfit.
Therefore to Germany market should design stylish clothes.

Geographic dimension include geographical border, transportation facilities, communication

link, physical remoteness, different climates, etc. The climate of South Korea is moderate,
with four distinct seasons. Air masses from the Asian continent have a bigger effect on the
weather in South Korea than air masses from the Pacific Ocean. Summers are generally short,
hot, and humid, whereas winters are usually lengthy, cold, and dry. But, The climate of
Germany is moderate and maritime, with cold, gloomy winters and pleasant summers, as well
as the occasional warm föhn breeze in the south. The majority of Germany is located in the
cool/temperate climate zone, which is characterized by humid westerly breezes. When design
clothes for South Korea and Germany should concern about different climates and should
design clothes match with those season differently to different country.

South Korea's economy is a highly developed mixed economy controlled by chaebols, or

family-owned corporations. It has Asia's fourth-largest GDP and the world's tenth-largest
GDP. Following the Great Recession, South Korea is still one of the world's fastest growing
industrialized countries. But, Germany also has developed economic condition. Germany's

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economy is a well-developed social market economy. It possesses Europe's largest economy,
as well as the world's fourth-largest nominal GDP and fifth-largest GDP. Both country has
good economic condition, therefore “Klazee” can design and export best quality apparel to
best price. No need much concern about cheap price. The best quality is the most important
thing. Another thing is, in 2020, employment rate of women in South Korea is 50.7%. In
reality the women in South Korea lack the diversity of educational and career possibilities.
According to a Ministry of Agriculture report from 2019, women farmers made up more over
half of all farmers. Therefore clothes for women should not focus formal, office type. Should
design more clothes match with South Korean informal dress pattern. But, According to the
Germany federal employment agency's statistics, about 71 percent of women in Germany
hold a job. Therefore when design clothes for Germany should focus Germanys’ women
office dress pattern as well.

These are the recommendation and advice for Klazee to success in international market under
the South Korean and Germany distance sensitivity. With those things organization will
achieve success in Global market.

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04. ( i ).
Blue ocean strategy Red ocean strategy
Blue oceans are wide, deep, and strong in Existing industries' cutthroat struggle makes
terms of potential and growth since they are the sea crimson red. As a result, the phrase
unexplored and unspoiled by competition. "red ocean" was coined.
This concept useful for identifying potential Red ocean strategy associated bloody
spaces in the environment with little competition and ‘red ink’, in other word
competition. financial losses.
The goal is to establish a new, uncontested Business is done in the current market.
market place.

Creating a new demand. Using the existing demand.

Competition is totally irrelevant. Aim to beating the competitors.

Value-cost trade-off is not much important. Value-cost trade-off is much important.

Outcomes -: It is a non-zero-sum game to Outcomes -: Red ocean competition is a zero-

create blue oceans. There is plenty of room sum game. Existing wealth is divided
for both profitable and quick expansion. amongst competitor firms in a market-
competing approach. Profit and growth
prospects deteriorate as competition grows.
The whole company activities focused at the The whole company activities focused on the
pursuit of products differentiation and low strategic choice between product
cost. differentiation and low cost.

Example : Apple has a blue ocean approach Example-: Ryanair, a European airline, is
to eliminate competitors and open up new competing extremely well in the already
markets for new goods. The Apple firm may crowded red ocean of short-haul airline
use the blue ocean approach to build their travel. Their business approach is to provide
own market rather than competing with a low-cost, no-frills airline. It achieves cheap
competitors to reach the top of the market. prices by employing a variety of strategies.
Apple's iTunes is an excellent example of the Ryanair's service isn't particularly
company's blue ocean approach. distinguishes itself from other airlines, but it
is inexpensive.

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ii.

A firm might enter a foreign market in a number of different methods. There is no one-size-
fits-all market entrance approach that works for all foreign markets. Should select appropriate
foreign market entry strategy according to the nature of the business including sourcing,
marketing, ownership, etc. To identify which strategy will be the greatest match, the business
must assess both the market potential and its internal capabilities. Frequently, organizations
begin with a lower-risk approach and then advance to other strategies that require more
investment, risk, and potential after demonstrating first success. Foreign market entry
strategies are exporting, licensing or franchising, joint venture, direct investment and
international mergers and acquisition.

Saraketha organic food production organization can expand their operation to foreign market
by using foreign market entry strategies. Initially it is better to enter foreign market with low
cost and low risk strategy. Direct exporting is better strategy to enter foreign market.
Exporting is sending items made in one nation to be sold in another. For a variety of reasons,
firms believe exporting to be a low-risk approach. To begin with, mature items in a home
market may discover fresh growth prospects abroad, exporting current goods is less risky and
more profitable than inventing new one, to balance off seasonal demand in their income
streams, companies that encounter seasonal domestic demand may seek to advertise their
services abroad. Finally, some businesses may choose to export since there is less rivalry in
other countries. Exporting is typically preferred by small businesses over other tactics
because it allows them to have more control over risk, cost, and resource commitment. Direct
exporting entails selling directly into the market of your choice, first and foremost with your
own resources. Once Saraketha Organic has created a sales campaign, they can seek out
agents or distributors to help them expand their market. Agents and distributors represent
your interests in close collaboration with you. They are the public face of your firm, therefore
selecting agents and distributors should be approached in the same manner that hiring a
senior employee would. But, exporting of organic fruits and vegetable is generating
transportation cost. To avoid this issue organization can select nearest appropriate country to
export product and after cater some growth and success, organization can establish
production centers in different countries.

After enter to the foreign market with direct export strategy and achieve some growth in the
foreign market, the firm can practice other strategies as well to achieve further development

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and growth. Firm can go to mergers, acquisition strategy and joint venture. A merger is the
joining of two or more companies to form a single company. Mergers and acquisitions can
occur from the accumulation of assets and liabilities among companies with the goal of
establishing a single company with common goals, finances, access to technology, and a
common market base. Acquisition occurs when one entity gains control of the target or
acquired firm's share capital, assets, and/or liabilities. Saraketha Organic going to
international market, quickly adopt foreign strategy is difficult task. Therefore mergers and
acquisition create these advantages. When two firms work together, they produce greater
value than if they worked alone. The goal of wealth maximization is to make as much money
as possible. For a reduced cost of capital, financial synergy is beneficial. A merger of firms is
always expected to result in fewer expenditures and cheaper cost of capital, as well as
increased revenues, market share and growth. It is recommended to Saraketha Organic to
merge or acquisition with agricultural firms.

Also Saraketha Organic can go to joint venture strategy. Joint venture is collaboration
between two companies, one local and one international. Both partners put money into the
company, share ownership, and govern it. Typically, the foreign partner contributes market
knowledge, business contacts and networks, and access to other in-country aspects of the
firm, such as real estate and regulatory compliance. Because joint ventures are riskier and less
flexible than other approaches, they need more commitment from companies. In many
nations, joint ventures can provide tax benefits, especially if foreign-owned firms are taxed at
higher rates than domestically held businesses.

Franchising/ licensing strategy is also one of strategy that can use going to global market. An
agreement in which a company have intellectual rights to a product allows another company
to produce it in exchange for royalties or other compensation. Agreement between franchisor
and franchisee will manage the relationship and business operations. Direct investment is
another strategy. In here multinational corporations may decide to invest directly in wholly-
owned subsidiaries to engage in full-scale manufacturing and marketing in other countries.
But these two strategies are not effective for Saraketha Organic. Company can go this
strategy when the firm becomes large scale global organization. If company goes this strategy
as initial or entry to the foreign market create more risk and cost.

It is recommended to Saraketha Organic to use exporting, joint venture, international mergers

and acquisition strategies as entry strategy to the foreign market.

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