MAR036-2 International New Ventures and Innovation Assignment
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Executive Summary
The report will provide broad information about the INV and its importance in international trade. It contains in-depth information about the management and recognition of research relating to internationalization and its concept, theories, and framework. The report also provides important information about the analysis of entrepreneurial opportunities and an evaluation of several aspects of INV. It also mentions the information about the things observed and learned in the conclusion part of the report.
Introduction
The report will provide a broad description of international new ventures or INV and its market entry techniques and growth mechanism strategies. It will contain detailed information about the recognition, organization, and management of research that had been INV. It will give a detailed analysis of the entrepreneurial scopes generated by the growth mechanism of the INV. The report will further enhance the evaluation of different aspects of INV.
International new ventures or INV refers to a significant and growing type of start-up that is described as a business firm which, from the initial phase, tries to obtain significant and sustainable competitive benefits from the sale of outputs in the several nations and the utilization of the resources. It has a considerable value and importance in a foreign competition that reflects a requirement for a broader understanding of these new ventures.
Recognition, organization, and management of research
The recognition of the researches refers to the different concepts and contexts that had been studied ad selected for knowing the growth mechanism of the INV. On the other hand, the organization and management of the researches helped in understanding how the INV works in business operations and how it had been able to make a huge amount of profits in the overseas market (Romanello and Chiarvesio, 2017). In order to understand the management and organizational concepts, it will be necessary to analyze the concept of internationalization along with its theories and frameworks.
Concept of internalisation:
Internationalization refers to the procedure of making increment in the involvement of business firms in international and foreign markets, which will further help in the expansion of business in the global forum. It helps a business organization make a wider approach to a different category of customers with their different tastes and preferences. Internationalization brings globalization and free trade among the different nations, enhancing positive diplomatic relations (Iacopetta et al., 2019). In today’s modern technological world, internationalization serves as the major key to developing a country. In the absence of internationalization, a country cannot create better relations with different nations. Internationalization also plays a major role in the social forum as it creates cultural fusion and communication between different ethnicities of several nations.
Theories of internationalization:
Process theory-
It reflects the international experience and journey of a business firm to understand and analyze the market position and financial position of the firm. It further signifies the age and size of the firm to know the basic details about the existence of the firm in the international market. Thus, it can be said that this theory depicts the international reputation and position of a particular business organization (Dimitropoulos, 2020).
Transaction cost theory-this theory depicts the transactional records of the business organization in a particular business organization. It reveals the technological integrity and intensity that are prevailing in the company. This theory also reveals the different features and characteristics of the products with which the company deals in the market. Moreover, it signifies the cost of commercialization and the costs of production. Thus, it can be said that this theory helps in analyzing the cost factor of the business organization in the manufacturing of products.
Resource-based theory-
This theory reveals the innovativeness nature of international activities, which will help in prospering the business organization of different countries. Moreover, it will generate new methods for enhancing more scope of international trade between different continents. It signifies the grants and additional gratuity that can be earned by the business organizations through the foreign market (Gutiérrez and Philippon, 2016). This theory also gives a reflection on the management experiences and skills which are required for achieving more coordination and cooperation with the foreign business partners as it helps in creating trust in the partnership.
Additional variables-
It refers to the other factors which also influence the internationalization of the industry, which will further support in bringing the expansion of the specialized sector. It acts as an extra benefit that can be achieved by international business firms and industries. Thus, it can be said that the additional variable helps in selecting the target country with which international relations in trade will be built in the near future.
Internationalization Framework-
It refers to the strategy which will help in making a structure that will enhance the better prospect of market strategy along with globalization. It brings coordination between different works and stages of a business organization, which will further create scopes for a better generation of overseas revenue from the global market. It can be achieved with the reference and connection of the global context of different topics and fields. Internationalization Framework represents the several administrative plans and policies which will help in making the better prospect of the overall activities and operational functions of the international organization (Moeen, 2017). Thus, it can be said that it represents the leading concept and managerial concept that will help in generating more profit and business growth. It contains the criteria and norms that are to be followed by the international companies for enhancement of better productivity and proper utilization of the resources. The conceptual framework of internationalization depicts the different scenarios and circumstances that should be analyzed before making the execution of the business operations in the market. It helps in understanding what additional changes are may be required before making sales in the international market. Moreover, the framework helps in arranging different works of the manufacturing of products in a scheduled way so that no extra efforts are required for the completion of the production process. It assists in determining the risk factor that is associated with the international trade and free trade such as lack of trust and business embargo that are sometimes put by the foreign companies due to downfall of the diplomatic relation (Laird and Venables, 2017). Moreover, international trade and business can also get affected due to high tariffs, export duties, and the occurrence of war, as these all affect and harms global trade hugely. Thus, it can be concluded that the internationalization framework provides a proper charter about what to and what not to do.
Analysis of entrepreneurial opportunities
The evaluations of entrepreneurial opportunities can only be defined by the estimation of the total sales that had been done in a particular year, and the total revenue that had been earned in a specific financial year. The analysis is made to ascertain the level of influence that the entrepreneurial environment can have on the entrepreneurial results. The analysis of entrepreneurial opportunities can be done based on three different categories of economies, namely, Bazaar, New Economies, and Firm.
Bazaar-type economy-
The Bazaar-type Economy refers to the cultural, social, and economic system in which the physical accumulation of vendors enhances the customer’s comparative data search through making the elimination of displacement time. However, business is very much affected by networks and relationships, and preferential treatment and relationships are integral and inseparable parts of the business. In this type of economy, customers are not treated justly and equally. Moreover, several customers tend to pay different prices. Thus, it can be said that the level of service provided and the price paid is a function of status and relationships. On the other hand, in this type of economy, goods, and services are personalized, and this leads to the creation of loyalty of the customer (Holtbrügge and Berning, 2018).
The new economy-
The New Economy refers to an economic and cultural system where the regular and general meeting of the vendors creates the comparative data search of the consumers, with the help of the elimination of displacement time. The flow of commerce is strictly gets impacted by networks and relationships, and preferential behavior is an internal part of the business. Under this economy, also consumers are not given equal treatment, just like in the bazaar-type economy. Moreover, different people tend to pay different prices for the products they purchase. The level of service given and the price paid is a function of relationship and status. Thus, it can be said that every function is interlinked, which cannot be avoided as it will have a direct impact on the business and economy (Santangelo and Meyer, 2017). On the other hand, both the goods and services are customized to give it legal status in the market.
The firm-type economy-
The Firm-type Economy is defined as the economic institution under which a place or region serves as a competitive benefit. In the shopping mall, for example, a limited clause provides protection to the vendor, thereby reducing the level of competition. The comparative knowledge search of the consumers includes the time of displacement, and an opportunity cost is needed in case of seeking appropriate data about goods and services. On the other hand, business takes its origin mainly within a set of impersonally described institutions. The flow of commerce refers to an operation of strategy which is dependent on optimization models.
Market Entry Strategy
The content marketing gives focus on the building and spreading data and information that are relevant to the requirement of the prospects to those customers who tends to buy goods and services. It basically gives an approach to education in the place of selling for influencing the behavior of buying. Inbound marketing tends to attract the focus of the consumers and invoke them to the website of a company by providing rational and meaningful content (Garson, 2016). On the other hand, paid media advertising, adoption of publicity, social media platform, the internet, and direct selling serves as other important marketing strategies that are to be implemented by a company for reaching global customers in different parts of the world. The selected topic of market entry techniques and strategies of growth mechanism has a great and huge impact on new businesses as it helps in providing the base to them for prospering and acquiring more customers thereby generating a high amount of sales in future. The major assumptions that had been made in developing the arguments are the current modernization of the sales process, better utilization of raw materials for production purpose, and choosing of best and relevant marketing strategy. Moreover, the better use of advanced technology for making an innovative product is effective. This will give the international companies more new outlook, sales, and market domination in the global forum (Knight and De Wit, 2018). The objective of transactions is to increase the level of wealth efficiently, and the process to do this is through making an unbiased and rational decision that will treats buyers as equals. The extent of the service provided and the price paid is established by the seller. Products and services are standardized, and thus, it leads to bringing efficiency, which in turn permits pricing in a competitive manner. Usage of various social media platforms like Facebook, Pinterest, and other platforms can be an effective way of innovative market entry strategy for a new venture. Apart from that, Web 2.0 techniques can be effective in boosting the market entry strategy.
Evaluation of different aspects of setting up INV
The INV topic selected for making an evaluation of internalization is the market entry techniques and strategies of the growth mechanism of INV. It helps in defining the various market factors which have direct influence and impacts on the international new ventures. Moreover, it signifies the techniques and tools that are being used for creating growth opportunities and scopes in the future period. The different marketing strategies provide a huge option of gaining a large number of customers, thereby increasing sales in the market. Moreover, huge sales give business organizations a wider scope to dominate the market and create a goodwill reputation in the market. Hence, it can be said that the market serves as the base for business companies throughout the world (Autio, 2017). For enhancing the internalization of the business, a company is required to adopt different means of marketing strategies, which will help in making them more reachable to far living customers.
Conclusion
From the above study, it can be concluded that internationalization plays a key role in the expansion and development of a business company in both domestic and foreign markets. The INV gives all companies a platform to launch themselves in a grand way in the international market, which will further help them in achieving ambitious business goals. The above study helped in understanding the entrepreneurial opportunities that can be achieved by implementing the correct economic policy. It represents the importance of internationalization theories, which can give huge support to the owners of the companies a chance to observe every internal administrative work so that the coordination in the functioning of every department can be smooth and efficient.
References
Autio, E., 2017. Strategic entrepreneurial internationalization: A normative framework. Strategic Entrepreneurship Journal, 11(3), pp.211-227.
Dimitropoulos, G., 2020. National Security: The Role of Investment Screening Mechanisms. Handbook of International Investment Law and Policy, pp.1-37.
Garson, K., 2016. Reframing internationalization. Canadian Journal of Higher Education, 46(2), pp.19-39.
Gutiérrez, G., and Philippon, T., 2016. Investment-less growth: An empirical investigation (No. w22897). National Bureau of Economic Research.
Holtbrügge, D., and Berning, S.C., 2018. Market entry strategies and performance of Chinese firms in Germany: The moderating effect of home government support. Management International Review, 58(1), pp.147-170.
Iacopetta, M., Minetti, R., and Peretto, P.F., 2019. Financial markets, industry dynamics, and growth. The Economic Journal, 129(621), pp.2192-2215.
Knight, J., and De Wit, H., 2018. Internationalization of higher education: Past and future. International Higher Education, (95), pp.2-4.
Laird, J.J., and Venables, A.J., 2017. Transport investment and economic performance: A framework for project appraisal. Transport policy, 56, pp.1-11.
Moeen, M., 2017. Entry into nascent industries: Disentangling a firm’s capability portfolio at the time of investment versus market entry. Strategic Management Journal, 38(10), pp.1986-2004.
Romanello, R., and Chiarvesio, M., 2017. Turning point: when born globals enter post-entry stage. Journal of International Entrepreneurship, 15(2), pp.177-206.
Santangelo, G.D., and Meyer, K.E., 2017. Internationalization as an evolutionary process. Journal of International Business Studies, 48(9), pp.1114-1130.
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