Wednesday, 22 June 2016

Are you thinking of internalization: Here are 5 tips

Hello readers, internalization is a situation whereby a company sells goods or provide services to another country (a country that is different from where the business headquarter is domiciled. In other words it involves a sale between one country and another, this includes giving out a franchise to another company in another country.

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- Perishable goods are provided by companies that are present in the same country as you, as such, if you are planning to explore internationalization you should not go into a business that will involve making perishable goods as they will be difficult to transport to other countries as they spoil easily. 

- Small scale services such as dry cleaning, car wash services and other similar services are not easy to transport from one country to another. Therefore, if you are thinking of internalization then you should not go into such businesses.

- When you are into a business that the products you make can be easily exported, if the taste of the consumers in the other country is not different from the taste of the consumers where your head office is located then it will best to use exportation as your medium of trading with them only.

- When you provide services such as having a restaurant or a chain of hotels then it will be best to have a branch of your business in that country. When products need to be differentiated to meet the needs of consumers in other countries then it is best to have a branch of your business there.

- When products cannot be easily transported then both exportation or having a branch of your business can be explored.

Keep checking out my blog regularly, cheers!

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