Where to find information for the process of internationalization

Table of contents

Table of contents

Table of figures

List of abbreviations

1. Introduction
1.1 Pertinence, aspiration and structure of this research paper
1.2 Delimitation of this research paper

2. Basics
2.1 Internationalization-Definition
2.1.1 Export.
2.1.2 Joint Ventures
2.1.3 Licensing
2.1.4 Subsidiaries
2.2 Internationalization - Importance for companies

3. Information procurement

4. Conclusion..

List of literature

List of internet sources

Table of figures

Figure 1: Development of Germanys Foreign Trades

Figure 2: Sources to gather secondary information

List of abbreviations

illustration not visible in this excerpt

1. Introduction

The internationalization of business units, paraphrase to operate on foreign markets, is an economical task, companies are confronted with and which gets more and more important, thus necessary in times of changes in global politics. The step of going international is accompanied with a lot of opportunities but also risks for the companies. Therefore it’s essential for the enterprises to do research and get the maximum of information before or during international business.

1.1 Pertinence, aspiration and structure of the research paper

The present paper deals with the possibilities of getting information about the process of internationalization. The goal of this work is initially to give ist reader an understanding of the term „internationalization“, furthermore this paper is going to give an overview of groups and organisations which offer information for the process of doing business abroad.

For this purpose Chapter 2 presents the basically definition of the concept of “internationalization”. It also demonstrates the importance of internationalization to companies.

Chapter 3 gives a summary of where to get information for the process of internationalization.

Finally Chapter 4 displays the results of this paperwork, presents a critically evaluation and gives a final summary of this research paper.

1.2 Delimitation of the research paper

This paper refers just on secondary information sources about the process of internationalization of German companies, mainly SMUs. Definitions and effectuations are for the sake of brevity not to exceed the given range of this paper.

2. Basics

This Chapter demonstrates the basics for an understanding of this research paper. First and foremost it defines the term „internationalization“. Afterwards different strategies for the step of acting abroad will be listed. In addition to this, the importance of internationalization for companies is going to be presented.

2.1. Internationalization - Definition

The scientific literature converses on internationalization, if a company practicises more than an occasional activity in or with a foreign country.¹ Internationalization can also be seen as “either a by-product of a firm’s efforts to improve its position within its network or networks, or as the result of an entrepreneurial action.”² The step of going international can take several shapes, as listed below.

2.1.1 Export

To export means the transboundary sale of products or services which had been produced in the own country. Export is the strategy of internationalization which is chosen mostly by companies. The reasons therefore are at hand of relatively low risks in export compared to other strategies of internationalization.³

2.1.2 Joint Ventures

A international Joint Venture is a corporate enterprise of two or more business- partners. At least one of this partners or even the Joint Venture itself is based abroad. At this a new enterprise is founded by the participating partners. The participants yield capital, personnel and/or knowledge in the new enterprise.⁴

2.1.3 Licensing

Licensing are contractual arrangements, with which domestic licensors farm out intangible assets to foreign licensees under certain conditions. These are explicitly the allocations of permits fort he usage of inventions, patents, registered designs, design patents, copyrights and technical as also business know-how.⁵

2.1.4 Subsidiaries

An international subsidiary is a legal independent engagements of a company in a foreign country. These subsidiaries can be leaded by controlling share or be owned at 100% by the origin enterprise.⁶

2.3 Internationalization - Importance for companies

The opening of the inner-European and also the non-European markets offers companies more extensive possibilities for the constitution of international proposals. For example and especially German SMU’s, who were acting fairly regional in the past, have to think about changing their strategies because of this altering global-economical parameters. An expansion to foreign markets could mean the perfect strategy to secure the company’s health.⁷

The fact that Germany can exhibit a positive foreign trade balance since decades, shows the importance of export businesses and therefore the essential of internationalization for German companies.

Figure 1 demonstrates the continuing dynamical development ox ex- and imports from and to Germany in the last 20 years. Until the financial crisis in the year 2008, figures were growing in exports (orange graph) and also imports (blue graph). After the drop caused by the crisis in 2008, the German export-economy has recovered in 2009 and shows growing figures again since last year.⁸

illustration not visible in this excerpt

Figure 1: Development of Germanys Foreign Trades

Source: http://www.ifm-bonn.org/assets/documents/Wallau-27-03-2009.pdf

In 2010 experts expect a rise of 8,4% in exports. Reasons therefore can be found in an increase of global-trade and the export-sector’s focus on goods, which are mainly produced in Germany, for example investment goods.⁹

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¹ Vgl. Wiesner (2005), S.10

² Vgl. Schweizer u.a. (2010), S.1

³ Vgl. Faix u.a. (2006), S.79f

⁴ Vgl. Faix u.a. (2006), S.80

⁵ Vgl. Kutschker, Schmid (2006), S. 838f

⁶ Vgl. Kutschker, Schmid (2006), S. 878ff

⁷ Vgl. Wallau (2006), S. 2ff

⁸ Vgl. Institut für Mittelstandsforschung Bonn (IfM-Bonn), 25.05.2010, http://www.ifm-bonn.org/assets/documents/Wallau-27-03-2009.pdf

⁹ Vgl. Institut für Wirtschaftsforschung Halle (IWH), 25.05.2010, http://www.iwh-halle.de/d/publik/presse/78-09.pdf