Product Internationalization Issues - Essay Example

? Product internationalisation Product Internationalisation A company takes various approaches to consider the internationalisation of a product. In addition, internationalisation of a product should involve designing of an approach that will ensure that the product’s entry into the market is successful with the product registering maximum profits after venturing in new markets. Importantly, it is essential for a company that is seeking to venture into new markets to identify various factors that might contribute to the failure of successful establishment of the product in the new markets. In addition, a company that is venturing into new markets should primarily ensure that the product the company seeks to internationalise is the market leader, or one of the market leaders, in the local markets within which the company was established. In this case, it is counter-productive for a company to internationalise a product without fundamentally seeking to acquire a large market segment of the local market. Despite these factors, a strategic analysis is crucial in the process of internationalising a product. To internationalise a product, an effective strategic analysis will involve the identification of the strengths that make the product a good option for new markets. Such strengths include the competitive advantage of the product over its competitors. Consequently, the competitive advantage determines whether the company will modify its product in order to be accepted in the new markets. In addition, the company may decide to introduce a new product for the new market or the company may decide to venture into the new international markets with the same product (Czinkota and Ronkainen 2007). In line with this, it is essential to point out that a good product does not require modification in order for the company to introduce it to new markets. As an alternative internationalisation of a good product should involve its introduction into the new market in its original form since it has the competitive advantages related to superior quality and a powerful brand name. The specific capability of a firm to produce a quality product is crucial in determining the internationalisation of a product. In this regard, efficiency in production and distribution systems determines whether the product will be offered to the customer when required (Lessard 2003). Case in point, investing in innovative technology was a crucial factor that helped Auer meet its customers’ demands since the company was able to offer its customers products when required due to continuous production. However, it is evident that the company failed to meet the demands of its customers once the distribution channels were affected. In this regard, the investing in effective distribution channels and innovative technology ensure that the company will be able to meet the demand of its customers by offering the products on time. A good product for internationalisation should be a differentiated product. By differentiation, a company should offer new customers a product that is unique in order for the customer to easily adopt the new product in place of the one that they were consuming. In this regard, it is challenging for a customer to adopt a new product without experiencing uniqueness of the product. In line with this, a company that internationalises a product should ensure that the product is distinct from its competitors since an inferior product cannot replace a superior product in an international market. Lessard (2003) identifies these factors as responsiveness to the demands of the local customers by ensuring that the product was in line with the tastes and preferences of the customer. Without responding to the tastes and preferences of the local customer, it is challenging to internationalise a product to new markets. A good product provides avenues for strategic partnership between various companies engaged in the international markets. Partnership strategies focus on creation of alliances that enable the selling of various products in different markets. For example, Auer’s products were able to ensure that the company engaged in alliances that facilitated the introduction of their products to international markets through partnerships with other companies that introduced Auer’s products to these markets. An analysis of social/cultural factors before internationalising of a product is important. In this case, a good product should be able to fit into various markets despite the similarities or differences in customers from the local markets and the international markets. In this case, the similarities and differences determine the approaches that the branding of the product takes and the standardisation of the product (Doole and Lowe 2008). A good product should be accepted in various markets since it should not face hostility by going against the culture of the new market. In this regard, the brand name and strategies used in marketing determine the acceptance of the product by the new market within which the product is introduced. For example, it is evident that Auer’s products gained acceptance from various markets that had differences in social/cultural aspects. For this reason, the products were accepted in Middle East markets as well as markets in Europe and North America, which have varying social/cultural perspectives. A good product has the capacity to ensure that the company internationalising the product engages in various activities that promote its competitiveness in the international market. For example, Auer was able to acquire a large market share through acquisition and mergers that helped the company to eliminate its competitors. In this regard, eliminating competitors not only helps an organisation in gaining a large market share, but it also helps an organisation enlarge its capacity to produce its products. In line with this, a good product helps an organisation achieve this objective of engaging in mergers and acquisitions that help in building an extra capacity for production. In conclusion, a good product should fit into new markets without undergoing any modification. Modification of the product will not introduce the product as it is since the changes in branding may affect the quality of the product and other important features. On the other hand, a good product should meet the tastes and preferences of customers in these new markets when being internationalised. Hence, the product should be differentiated and unique in nature in order to ensure that it fitted into various markets without social/cultural factors enhancing change in the product’s branding and advertisement. Bibliography List Czinkota, M. R. and Ronkainen, I. L. 2007. International Marketing. 8th ed. Mason: Thomson South-Western. Doole, I. and Lowe, R. 2008. International marketing strategy: Analysis, development, and implementation. 5th ed. London: South-Western Cengage Learning. Lessard, D. R. 2003. Frameworks for global strategic analysis. Journal of Strategic Management Education, 1(1), pp. 1-12. Read More