Internationalization of Business

Firms operating across borders have to take numerous strategic decisions. The following contribution will provide an overview of the essential strategic decisions that compose strategies of internationalization. The five central dimensions of internationalization strategies are (1) market entry strategies, (2) target market strategies, (3) timing strategies, (4) allocation strategies and (5) coordination strategies. It is further argued that the potential of foreign units abroad should be exploited to create and utilize sustained competitive advantages. However, before formulating internationalization strategies, extensive strategic analyses have to be undertaken, and the firm’s internationalization philosophy and internationalization objectives should be carefully considered.

At the beginning of 2006, one of the biggest takeovers in the sporting goods industry took place: the leading German sporting goods company Adidas acquired its U.S. competitor Reebok. Building on an analysis of the sporting goods industry and the characteristics of Adidas and Reebok, the present case study explores the complexities of the cross-border acquisition. It outlines not only the motives and risks associated with the acquisition but also some major consequences for Adidas’ and Reebok’s strategy, structure and culture. In particular, the case study examines the brand positioning of Adidas and Reebok before and after the acquisition as well as the related challenges. Furthermore, it analyses the integration of Reebok into the Adidas Group between 2007 and 2017, especially in the context of increasing levels of competition, such as competition by industry rivals Nike and Under Armour.

When two or more firms engage in a merger, it is usually a highly complex and challenging transaction. It is common wisdom that approximately 50% of all mergers are considered failures. In an international merger, the potential difficulties are often even greater, and they can be due to, for instance, cultural, geographic, or economic differences. The case of Airbus represents a cross-border merger with additional complexity mainly because of idiosyncrasies in the industry environment, such as the strong involvement of political and governmental actors. Therefore, since its inception, Airbus has not only faced fierce competition with its powerful U.S. rival, Boeing, but also constantly struggled with the legacy of being the result of an international merger. The present case will outline some antecedents and consequences of the Airbus merger and discuss the major challenges of Airbus’ international configuration and coordination strategies.

Within the retail industry, the grocery discount segment has grown in importance during the last decades. Aldi and Lidl are the two leading grocery discounters worldwide. The present case study outlines the internationalization of Aldi and Lidl. Not only market entry strategies but also target market and timing strategies as well as the standardization-differentiation controversy are addressed.

Austria-based motorcycle manufacturer KTM has managed to become the number one European seller of motorcycles. To achieve this goal, the company has chosen to engage in a joint venture with Indian motorcycle manufacturer Bajaj Auto Limited (BAL). The present case study provides an overview of KTM’s internationalization path and highlights the main motives, objectives and outcomes of the Austrian-Indian partnership. The case study outlines the internationalization of KTM in the context of an overview of India’s economy, the Indian motorcycle industry and India’s key players in the industry.

China-based Lenovo has managed to become the number-one seller of personal computers (PCs) in five major PC markets. To achieve this goal, the company has repeatedly chosen to grow via acquisitions, joint ventures and strategic alliances. The present case study provides an overview of Lenovo’s internationalization path and highlights the objectives and motives underlying the firm’s expansion strategy. It shows why Lenovo embarked on an inorganic growth strategy, although it had successfully established itself through organic growth on the Chinese market in previous years. The case study also outlines the company’s approach in meeting some of the major challenges in post-acquisition management.

McDonald’s is often considered the archetype of an American company. The present case study outlines how McDonald’s started its business in the United States before expanding abroad. It shows how the company stuck to its core ideas while being responsive to local differences and to changing environmental trends over time. The case study also discusses major challenges that McDonald’s faced and how the company reacted to them.