The Marketing Book 5th Edition

Degree of internationalization of the market

Degree of internationalization

of the firm

Low High

Low

High

The early

starter

The late

starter

The lonely

international

The international

among others

International marketing – the issues 613

have forced some firms to become multi-
national at the turn of the century so as to
assure themselves of reliable sourcing. This is
the case of the ‘early starter’, whereas the ‘late
starter’ is one who has realized belatedly that
the growth opportunities are all abroad, but so
too are the competition. The ‘lonely inter-
national’ is not only more adventurous, but has
resource, knowledge and skills to redeploy. It is
driving the competition, not being driven by it.
The last cell of the ‘international among others’
is of a company that is competent internation-
ally but does not enjoy any sustainable com-
petitive advantage over its competitors in this
regard. Conditions describe a high degree of
internationalization of the market and the
degree of internationalization of the firm is
already high, so here is a company that must
hunt with the rest of the pack.

Economic change drivers

Worldwide trends towards

regionalization

Worldwide, important trends towards region-
alization and the economic free trade areas of
ASEAN and NAFTA alongside the EU can be

detected: economic integration and industrial

concentration continues apace and the follow-

ing visible signs are beginning to come into

focus:

 Trend to fewer larger groupings evident in

food, cars, airlines, telecommunications and

financial services.

 Growth of the services sector in all major

Western developed economies and the

networks that are required to service that

international demand (Fisk, 1999).

 Retailers are showing distinct signs of both

internationalization and concentration.

 The introduction of the ‘Euro’ currency on 1

January 2002 created a single currency for 12

of the 15 member states of the EU, when 305

million Europeans learned to use a new

currency. The implications for companies

considering themselves international are

obvious.

 Ten more European nations that were formerly

communist states, including Poland, Hungary,

Czech Republic, Slovakia, Estonia, Latvia,

Lithuania, Slovenia, Bulgaria and Romania, are

waiting to join the EU and, together with

Cyprus, Malta and Turkey, that could take the EU

membership to 28. However, it is more likely

that membership will be phased over several

years. Even so, it is mooted that Poland,

Hungary, Estonia, Czech Republic, Cyprus and

Malta could join the EU from 2004.

 Taking into account the Euro and other

economic policies of the EU, small and

medium-sized European companies which are

still anchored in national markets are at risk,

since they could be squeezed without the

advantage of size or of flexibility.

 A weak Asia with key economies such as Japan

and South Korea continuing in recession will

have significant effects upon the world

economy. The loss of markets in that region

will force companies to seek markets

elsewhere instead; hence, we can expect a

displacement effect and can expect to witness

even keener competition in the West as a

result.

Figure 24.1 Market internationalization
Source: Johanson and Mattson, 1986.