The paper "Orklis International Strategy " is a good example of a business assignment. While most companies pursue internationalization path for purposes of growth, the main drive of Orkli’ s foreign expansion is its socio-economic mission. Wealth creation is one of the main missions pursued by Orkli, and for that reason, the company has opened foreign sales and production assets that offer a positive spill-over effect. The company internationalized its operations in order to compete effectively in the global market, but not to have foreign units. Furthermore, the company believes in multi-location than off-shoring, and the foreign production activities were intended for boosting the foreign markets’ sales rather than distributing products to the European market, which Ordizia plant can serve efficiently.
When Orkli’ s Europe’ s market position in Europe started becoming rigid, the company had to focus on other markets across the globe with the objective of pursuing its growth path. Although South America, Asian, and European continents offered Orkli some captive markets, the one in North American had fewer opportunities because heating, as well as cooking efficiency, were not considered important as in other markets.
The need for Orkli to go global grew when new locations for production as well as consumption, such as China started emerging. Such emerging markets provided Orkli with additional profit-making possibilities through the exploitation of its products’ competitive strengths. Therefore, Orkli's international strategy was offensive expansion; that is, developing and growing the business by expanding to every market that offers an opportunity. Besides that, a number of Orkli’ s industrial clients had moved their production activities to the emerging economies and invited companies like Orkli to join them in what is described as a follow-the-client style. Another internationalization driver is attributed to the fact that the rest of the world was gradually adopting the standards as done before by the European Committee for Standardization; therefore, he was motivated to market its products globally.
With the view of Orkli global expansion, it is clear that firms are offered different business opportunities by the international markets, which range from cost reductions to market expansion. As mentioned by Dachs et al. (2014, p. 16) internationalization, is a strategic choice that is very challenging to pursue because of the uncertainty related to the new markets and its resource-intensive nature.
For this reason, it is imperative for policymakers to come up with policies that would reduce barriers associated with cross-country trade and offer support in terms of physical and financial resources, managerial knowledge, as well as the development of international network development. Business expansion to foreign markets is attributed to a number of factors such as growth, knowledge-related, and resource factors. The main driver of Orkli expansion was to identify growth opportunities that would facilitate the growth of the business, increase market size, and profits, and reduce overreliance on one market.
Besides that, some companies internationalize their operation for knowledge-related reasons; for instance, looking for knowledge assets, normally related to research and development investment, language skills, innovation capabilities, technologies, or unique products. Most of Orkli’ s industrial clients have moved their facilities to the emerging economies in what can be termed as resource-seeking efforts, seeking low-cost labor. As pointed out by Hansson and Hedin (2007, p. 10), the presence of market demand, as well as market opportunities in foreign countries, is also a primary driver to internationalization.
Dachs, B., Stehrer, R. & Zahradnik, G., 2014. The Internationalisation of Business R&D. Massachusetts: Edward Elgar Publishing.
Hansson, A. & Hedin, K., 2007. Motives for internationalization:Small companies in Swedish incubators and science parks. Master Thesis. Uppsala, Sweden.
Hashai, N. & Delios, A., 2012. Balancing Growth Across Geographic Diversification and Product diversification: A contingency approach. International Business Review, vol. 21, no. 6, pp.1052–64.
Persistence Market Research, 2016. Domestic Heating Appliances Market: Global Industry Analysis and Forecast to 2015 to 2021. [Online] Available at: www.persistencemarketresearch.com/market-research/domestic-heating-appliances-market.asp [Accessed 7 November 2016].
Twarowska, K. & Kąkol, M., 2013. International Business Srategy - Reasons And Forms Of Expansion Into Foreign Markets. In Proceedings of the Management, Knowledge and Learning International Conference. Zadar, Croatia , 2013.