Dynamic Internationalization Process Model

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• Dynamic Internationalization Process Model
• By
• Mustafa Burak Guclu

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Internationalization Process
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Three Exceptions

• 1. When firms have large resources the
  consequences of commitments are small.
  Consequently, large firms or firms with surplus
  resources can make larger international steps.
• 2. When market conditions are stable and
  homogeneous, relevant market knowledge can be
  gained through other ways than experience.
• 3. When the firm has considerable experience from
  markets with similar conditions it may be
  possible to generalize this experience to the
  specific market.

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Dynamic Response Model
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Weak Strong Signals

• According to Ansoff
• weak signals imprecise early indications about
  impending impactful events.
• strong signals issues that are sufficiently
  visible, and concrete to permit the firm to
  compute their impact and device specific plans.

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Managerial Mental Filter

• The manager filters the novel signals that are
  not relevant to his/her historical experience,
  and therefore ignores the shape of the new
  environment. Ansoff refers this as mentality
  filter.

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Managerial Mental Challenges

• The Cognitive Challenge The manager should be
  free of refusal, nostalgia and arrogance.  
• The Creative Challenge The manager should look
  for alternatives as well as awareness.
• Power Challenge The manager should not feel
  threatened with a discontinuity, try to minimize
  or refuse to recognize the impact of
  discontinuity to the firm.
• Entrepreneurial Challenge The manager should be
  tolerant to failure and experiment a portfolio of
  new strategies.

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Environmental Scanning

• Choo (1999) defines environmental scanning as
  the acquisition and use of information about
  events, trends, and relationships in an
  organization's external environment, the
  knowledge of which would assist management in
  planning the organization's future course of
  action.
• The process assumes that potential impacts on
  the organization may come from unpredictable and
  uncontrollable sources. Thus, environmental
  scanning is closely linked to strategic planning
  (Albright 2004).

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Internal Scanning

• It is vital for the firms to analyze their
  internal strengths and weaknesses during the
  strategy-making process (Barney 1991).
• A firm will have a better chance of developing
  new resource configurations and market positions
  that capitalizes on its unique strengths, if it
  can identify and evaluate its knowledge bases and
  unique capabilities (Kor, Mahoney and Pettus
  2007).

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Knowledge Gap

What a firm must do
What a firm must know
Strategic Gap
Knowledge Gap
What a firm can do
What a firm knows
Source Michael H Zack
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Flexibility

• Koornhof (1998) describes flexibility as the
  ability and capacity to reposition resources and
  functions of the organization in a manner
  consistent with the evolving strategy of
  management as they respond, proactively or
  reactively, to change in the environment.

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Flexibility

• Volberda (1998) comes up with a different
  perspective in which internal flexibility is
  viewed as capacity of organizations to quickly
  adapt to the demands of the environment, while
  external flexibility is viewed as the capacity of
  the organization to actively influence the
  environment, thereby reducing the vulnerability
  of the organization.

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Dynamic Capabilities

• Dynamic capabilities involve the organizational
  processes by which resources are utilized to
  create growth and adaptation within changing
  environments (Eisenhardt and Martin 2000, Lado,
  Boyd, Wright and Kroll 2006 Teece, Pisano and
  Shuen 1997). Dynamic capabilities relate to the
  organizations competencies to integrate, build,
  and reconfigure resource positions in rapidly
  changing environments.

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Strategic Planning

• Strategic programming Extrapolation of trends
  without changing the organization.
• Strategic issue management Besides programs,
  also focusing on relevant issues and initiating
  activities in line with these issues.
• Strategic contingency planning Developing plans
  for every possible change and transforming the
  organization in order to anticipate possible
  developments.
• Preparedness strategies Decreasing planning
  activities, and increasing organizational
  activities in order to get more strategic mileage
  out of the organization in case of strategic
  surprises.
•  
• Source Volberda, H.W. 1998. Building the
  flexible firm How to remain competitive. New
  York Oxford University Press.

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Planning vs. Organizational Activities