3-International Entrepreneurship Opportunities

International
entrepreneurship
opportunities
Introduction
 To expand a venture, entrepreneurs need to:
 Identify opportunities for domestic and international expansion.
 Infuse new entrepreneurial spirit (intrapreneurship).
Introduction
 Factors contributing to international expansion:

 Opening up of controlled economies to market-oriented
enterprise.
 Self-interest of organizations as well as the impact of
external events and forces.
 Developing countries need training and education as
well as infrastructure to support their development and
growth in the next century.
Opportunity Recognition and the
Opportunity Assessment Plan
 Thekey to successful domestic and international
entrepreneurship is to develop an idea that has a
market with a need for the product or service idea
conceived.
 Opportunityassessment is often best accomplished
by developing an opportunity assessment plan.
 Anopportunity assessment plan is not a business
plan.
Opportunity Assessment Plan
 Focus on Opportunity
 An opportunity assessment plan has four sections:
 The first section develops the idea, analyzes competitive
products and companies, and identifies the unique selling
propositions.
 The second section focuses on the market—its size, trends,
characteristics, and growth rate.
 The third section focuses on the entrepreneur’s and
management team’s skills and experience.
 The final section develops a time line indicating the steps to
successfully launch the venture.
The Nature of International
Entrepreneurship
 International entrepreneurship is the process of an entrepreneur conducting
business activities across national boundaries.
 The activities necessary for ascertaining and satisfying the needs and wants of
target consumers take place in more than one country.
 With a commercial history of only 300 years, the United States is a relative
newcomer to the international business arena.
International versus Domestic
Entrepreneurship
 Economics
• In a domestic business strategy, the entire country is organized
under a single economic system and has the same currency.
• Creating a business strategy for a multi-country area means
dealing with differences in:
 Levels of economic development.
 Currency valuations.
 Government regulations.
 Banking, venture capital, marketing, and distribution
systems.

International versus Domestic Entrepreneurship
(cont.)
 Stage of Economic Development

 Certain factors significantly impact a firm’s ability to
successfully engage in international business such as:
 Fundamental infrastructures.
 Banking facilities and systems.
 Educational systems.
 Legal system.
 Business ethics and norms.
 The valuation of one country’s currency affects business transactions
between countries.
International Entrepreneurship Vs
Domestic
 Type of System
 Difficulties in doing business in economies that are
developing, or in transition.
 Use of barter or third-party arrangements in these
countries to increase business activity.
 Barter - A method of payment using nonmoney items.
 Third-party arrangements - Paying for goods indirectly through
another source.
Domestic
 Political-Legal Environment
 Political risk analysis - An assessment of a country’s
political policies and its stability prior to entry.
 Types of political risks:
 Operating risk.
 Transfer risk.
 Ownership risk .
 Conflict and changes in the solvency of the country.
Domestic
 A country’s legal system regulates:
 Its business practices.
 The manner in which business transactions are executed.
 The rights and obligations involved in any business transaction
between parties.
 Critical areas for every entrepreneur:
 Property rights.
 Contract law.
 Product safety.
 Product liability.
Domestic
 Language
 One of the biggest problems for the entrepreneur is
finding a translator.
 Significant problems can occur with careless
translation.
 Care should be taken to hire a translator whose native
tongue is the target language and whose expertise
matches that of the original authors.
Domestic
 Technological Advancement
 The variation and availability of technology are often
surprising, particularly to an entrepreneur from a developed
country.
 New products in a country are created based on the
conditions and infrastructure operant in that country.
Aspects of Culture
Motivations to Go Global
 Profits.
 Competitive pressures.
 Unique product(s) or service(s).
 Excess production capacity.
 Declining home country sales.
 Unique market opportunity.
 Economies of scale.
 Technological advantage.
 Tax benefits.
Foreign Market Selection
 One good market selection model employs a five-
step approach:
 Develop appropriate indicators.
 Collect data and convert into comparable indicators.
 Establish an appropriate weight for each indicator.
 Analyze the data.
 Select the appropriate market from the market
rankings.
Entrepreneurial Entry Strategies
 Exporting
 Indirect exporting.
 Direct exporting.
 Nonequity Arrangements
 Direct Foreign Investment
 Minority Interests.
 Joint Ventures.
 Majority Interest.
 Mergers:
 Horizontal merger.
 Vertical merger.
 Product extension merger.
 Market extension merger.
 Diversifiedactivity merger
 Foreign entrepreneurs know the country and
culture.
 They can facilitate business transactions and update
the entrepreneur on business, economic, and political
conditions.

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International

 Factors contributing to international expansion:

 Stage of Economic Development

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