Ramos - Rathinakumar - INTERNATIONALIZATION STRATEGY: BETWEEN ADAPTATION AND STANDARDIZATION

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ESG Management School, Paris
INTERNATIONALIZATION STRATEGY:
BETWEEN ADAPTATION AND STANDARDIZATION
Master of International Business

Spring 2012
Supervisor: Mr. Olivier LAMOTTE
By
Marco RAMOS
Joseph RATHINAKUMAR
Table of Contents
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1. INTRODUCTION ................................................................................................. 3!
2. INTERNATIONALIZATION STRATEGY SELECTION .............................................. 5!

2.1. STANDARDIZATION & ADAPTATION ...........................................................5!
2.1.1. Definition of standardization ..............................................................5!
2.1.2. Definition of adaptation .....................................................................6!
2.2. MODES OF ENTRY ........................................................................................7!

2.2.1. International development with foreign distributors........................7!
2.2.2. Strategic alliances with foreign partners...........................................9!
2.2.3. Mergers and acquisitions ..................................................................12!
2.3. RELATIONS BETWEEN THE DESTINATION CHOICE AND

INTERNATIONALIZATION STRATEGY .................................................................14!
2.3.1. Geographical location of the destination......................................14!
2.3.2. The local cultural aspect ..................................................................16!
2.3.3. Economical situation of the host country .......................................18!
2.4. COMPANY SPECIFITIES ..............................................................................20!
Marco Ramos - Joseph Rathinakumar !
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2.4.1. Internal assessment ............................................................................21!
2.4.2. Companies industry and international strategy selection ............22!
3. CASE STUDIES IN THREE DIFFERENT INDUSTRIES ............................................. 25!

3.1. FAST-FOOD INDUSTRY ANALYSIS ..............................................................25!
3.1.1. McDonalds: Think global, act local ................................................25!
3.1.2. Starbucks Coffee a unique experience all over the world...........28!
3.2. RETAILING INDUSTRY ..................................................................................31!

3.2.1. IKEA, global retailer faces the Chinese market ..............................32!
3.2.2. Carrefour entering the Japanese market.......................................35!
3.3. INTERNATIONAL STRATEGY OF THE TEXTILE INDUSTRY..............................38!

3.3.1. H&M, a universal model ....................................................................39!
3.3.2. Inditex, a global textile retailer .........................................................42!
4. CONCLUSION ................................................................................................. 46!
5.!REFERENCES .................................................................................................... 47!

5.1. LITTERARY REVIEW ......................................................................................47!
5.2. WEBSITES .....................................................................................................49!
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Spring, 2012
1. INTRODUCTION
In a globalized world, similar to the one that we are currently facing, companies have to
be precocious regarding the selection of their internationalization strategy. Indeed, the
last few decades saw the world change. It moved from a threatening situation with three
World Wars to a world that dropped certain trade barriers. We now are all connected in a
way we have never been before. Companies no longer target their domestic market only
but they more and more tend to master international and markets. This globalization not
only concerns the selling part of the company but it also involves the sourcing and
production portion.
The globalization has also developed common needs between people all over the world.
This obviously makes it easier for the companies and allows them to no longer target by
country but to target by segment that gather groups of people from different countries
with common needs. This phenomenon is so strongly present in our world that it creates
an entire different category of companies that enjoy international range right from the
beginning of their life the well-known Born Global companies.
What are the important factors that lead companies to adapt or standardize while
expanding their business to an international market? Do the companies really have to
choose between these two approaches? In other words, in this paper, we will attempt to
give significant criteria that drive nowadays companies to choose one of these strategies
when planning an international expansion.
Throughout the thesis, we will be able to see that the main strategy of the companies can
be either standardization or adaptation. Nonetheless, there are no such obligations for
businesses to choose between either of these approaches. Therefore we will see all along
this paper that some key elements are weightier than some others in the decision making.
In order to develop this analysis, we conducted a literary review concerning the main
elements that influence the choice of the internationalization strategy that companies has
to face. We selected these factors among others as we considered that there was a link
between them and the international strategy. Moreover several articles that we studied
revealed that these same factors were fundamental to adaptation or standardization
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approaches. Therefore, after giving the definition of the Adaptation and Standardization
concepts, we will be reviewing the important factors as the mode of entry, the destination
selection and the company specificities. The second part of this thesis analyzes the
internationalization strategy of six different multinational firms within three different
industries. We will therefore compare the fast-food industry with the retail industry and
finish by analyzing the textile industry. These different sectors represent well the
globalization and the three of them have several internationally successful businesses.
Concerning the companies analyzed, we based our selection on big firms that have an
international aura, with solid expansion strategies. Also the accessibility to the data was a
key point in the selection of the companies. This would enable us to make significant
comparisons and therefore help us all along this thesis.
Spring, 2012
2. INTERNATIONALIZATION STRATEGY SELECTION

2.1. STANDARDIZATION & ADAPTATION
This dissertation has the objective of understanding the factors that pushes a company to
choose its strategy of internationalization, and especially the selection between
standardization and adaptation while going abroad. As a first part, consequently, we are
going to take a look at the definitions of both of these concepts and then continue our
literary review with the important factors that enter in relation regarding the selection of
the strategy.
2.1.1. Definition of standardization

Standardization means that a company will sell in a foreign market, the exact same
product or service it sells in its own market. The main target of the standardization for a
company is therefore to minimize the costs by the process of economies of scale. The
process could be on an entire production chain just like it could be on a specific part of
the marketing mix like the packaging, the design, the product or even the distribution
development.
Sometimes, it is important for a company to standardize, as, it not only reduces the
operating costs but it also allows the company to reduce considerably the risk while
going in a foreign market often unknown. Furthermore, standardization has to deal with
consumer needs and desires. Several renowned authors stipulated that thanks to the
technological evolution enhanced by the era of communication our world witnessed,
there is a certain conjunction of consumers need all over the world. Therefore,
standardization is the right strategy for companies to sell their product abroad 1 .
Companies do no longer target consumers in different countries but they target different
segments in a region or even the entire world. For instance, the teenagers can be targeted
within some countries like in Europe and USA as they have the same influences and
needs. The cinema industry illustrate well this process with specific movies that targets
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1
Yip G. (1996), Toward a new global strategy. Chief Executive Journal, #110, 66-67
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only the teenagers (teen movies) whether they are American, English, French or Spanish.
The film and the marketing will target the same segment in different countries.
And finally, the fact that a company goes international selecting a standardization
strategy will definitely simplify its internationalization, as it will use the exact same
product or service all over its foreign markets as well as in its domestic market.
2.1.2. Definition of adaptation

The adaptation strategy unlike the standardization one, refers to the change a company
operates while going on new international markets; adaptation can be drove by different
factors as infrastructure of the host country, but companies mainly use an adaptation
approach in order to sell their product to a population that have a different cultural style.
Using an adaptation strategy can enable the company to get higher revenue by
convincing a more customer who usually have a different need from the companys
home markets consumers. Also it is important to say that adaptation maybe sometimes
more expensive than a standardization strategy. However, we must mention that the main
important fact is the knowledge, the company getting on a new international market,
must ensure that they identify the real need of the consumers and therefore reply to it
through its product or service. Consequently, adapting companies have to acquire not
only the financial requirements for the internationalization but they also have to know the
major needs of the host country consumers, and especially be able to respond to it.
Meaning that the company must have the capabilities to adapt but also it has to obtain the
appropriate resources (capital as well as human) to do so. The specialists stipulate that
people respond differently to an advertisement or a product across borders. The
cultural distance is thus, a key element that pushes adaptation.
Also, as we saw that standardization carries less risks, companies that resort adaptation
are not always certain to obtain the expected effect on the consumers, therefore it is a
way that involves a certain level of risk.
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Having defined those two concepts, we will see during the following parts of this paper,
that strategies differ according to certain factors that are linked. For instance, the
selections of the host country, the entry mode or even the capacity of the company to go
internationally are important dynamics that will push a company to choose adaptation or
standardization.
2.2. MODES OF ENTRY

There are different factors that companies have to take into consideration in order to
successfully develop their businesses in a foreign market. Researches show that the most
important point that companies have to acknowledge is the selection of the entry mode.
Roughly speaking, the cost management, environment specificities and some other
determinant for the international expansion will be chosen alongside the entry mode.
Also the selection of the entry mode will have a significant impact on the
internationalization strategy, especially about the choice of the strategy: Adaptation or
Standardization.
There are numerous types of entry modes; in this study we consider three main methods
to enter an international market. The first entry mode will take advantage of the foreign /
local distributors; the second mode of entry allows companies to call for a strategic
alliance with foreign partners and finally the mergers & acquisitions are one of the
solutions for the firms with a better financial condition.
2.2.1. International development with foreign distributors

Entering a new market, more importantly, a foreign country is not an easy task.
Companies have to reflect on different facts that are crucial for the development in a
foreign market. The knowledge of the local market is sometimes very precious for the
companies. By having information on the local culture or on the local consumption habits,
companies can reach a better overseas result thanks to a better targeting. This knowledge
is hold by the local distributors who have an expertise on the local population as well as
on the local competition and on the local rules and regulations that would be an essential
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element for the exporting company. Creating a link with those local distributors can help
companies to breach the entrance barriers and most importantly, it will lower the risks of
their international development. For David Arnold 2 , there has to be a very strong
relationship between companies and local distributors and that, even after companies
have been well established in the foreign market. In this following segment we will try to
analyze the advantages and the drawbacks of the use of foreign distributors while a
company develops internationally.
One of the most essential points for a enterprise while crossing borders to develop its
business, will be maintaining the costs low. And according to D. Arnold, this is a fact
that pushes companies to enter a new country through local distributors. In this mode of
entry, not only the local distributor represents an option to reduce costs and risks but it is
also seen as an adding value to the business. For instance, the exporting firm will be
investing only a minor amount in marketing and business development letting the local
distributor focusing on it, those two departments being precious to the overseas market
penetration. Nonetheless, by letting the distributor deciding the marketing and business
development, companies are losing power from a strategic point of view. This strategy
called by David Arnold the Beachhead Strategy, allows the company to take some time
to assess the results of their first move in the foreign market. However, a large number of
multinational firms use this approach and then in a longer term they ultimately take back
the entire control of the strategic points. Observing this attitude from the MNEs, local
distributors take the relationship in a more temporary way and no longer invest heavily in
strategic marketing and business development, which are indispensable for the business
growth. Therefore, after a while, when the sales start to flatten, it creates a rupture
between companies and local distributors. Indeed, the companies complain that the
distributors are not ambitious enough to grow the business and the distributors complain
the relatively low support from the companies. Arnolds study shows that when
companies move from beachhead strategy toward a strategy of direct distribution from
the companies themselves combined to the durable relations with the local distributors
there is a higher success. In short, companies are recommended to keep a relationship
with the local distributors even though they start to get established in a foreign country.
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2
Arnold D. (2000), Seven rules of international distribution, Boston, MA, Harvard Business Review #78, 131
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The central point resides in acquiring the right equilibrium between the role of the
foreign partners and the role of the company.
Furthermore, David Arnolds research illustrates that the companies and the local
partners relationship is even more effective when the simple distribution relation leaves
room to a real collaboration between the two entities3. Additionally Arnold suggests a list
of 7 recommendations to select and manage a relationship with a foreign distributor. In
one of his recommendations the first one Arnold, puts the stress on the fact that the
company should initially select the country where it wants to develop its business and
then choose the proper local distributor as a partner. This shows the importance of the
country selection that will be treated in the second part of this literary review.
There is also another issue highlighted by Andrew R. Thomas and Timothy J. Wilkinson,
about the distribution approach in foreign markets that have a drawback on the
distribution in domestic market. Actually more and more companies focus on their
fundamental skills i.e. production and quality control, and neglect the distribution and
sales part which are highly considered by the authors4. The difficulty comes up especially
when companies use the beachhead strategy and they let the strategic portion to huge
distribution networks like Wal-Mart for which the partner represents only a tiny part in
their total revenue. Consequently, the initial strategy is no longer in place as the megadistributor takes the entire control from the marketing to the price fixing. Hence, while
Arnolds research recommends to the companies to keep control of the strategic part
when using local partners, Thomas & Wilkinsons work emphasis the drawback of
letting too much control to the distributors.
2.2.2. Strategic alliances with foreign partners

Another way to enter a new market is by using partner companies in a foreign country,
which are usually rivals, creating strategic alliances. This mode of entry has three main
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3
Arnold D. (2000), Seven rules of international distribution, Boston, MA, Harvard Business Review #78, 133
Thomas A. R. and Wilkinson T. J. (2006), The outsourcing compulsion, BOSTON, MA, MIT: Sloan Management
Reviews #48, 10-14
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benefits: first, firms share risks and expenditure from research and development; second,
the company can take advantage of partners complementary resources; finally, this
strategy enables a more efficient development of capabilities to deliver products and
services. Usually, firms are not willing to work together being afraid of the lack of
control, but the colossal research and development costs lead some companies to look for
what we call a competitive collaboration, usually applied to lunch new products.
Risks are therefore avoided by using this kind of internationalization strategy.

Nevertheless, a way to evaluate such strategy is by considering the learning race: how
much more a company can learn from its foreign partner compared to what the ally
company can assimilate from this same relationship. In order benefit from this evaluation,
firms have to respect four key principles: first, companies have to take into consideration
the fact that this kind of collaboration is like competing in a different way; second, the
harmony between partners is not the most important variable to consider as a measure of
accomplishment; third, strategic alliances have limits such as protecting the company
against competitive compromises; and finally, it is primordial to gain knowledge from
the partner companies from the overseas country.
One of the dangers that can occur is the disproportionate transfer of a companys own
Firm Specific Advantages (FSAs), which can be absorbed by the alliance partner
company. It can happen by becoming the collaborator of so-called Original Equipment
Manufacturers (OEMs), which mainly take care of the research and development on the
product and the process design, and then, with time, the OEM develops the ability to
penetrate the market by itself. By being lazy, the company let its partner taking care of
one of the most important points to keep: know-how. Consequently, the partner does not
need the company anymore, and therefore, the firm that goes international becomes
dependent of the partner. Dependency is another danger of this mode of entry. To avoid
dependency, four principles exist: create FSAs through long-term; by outsourcing some
of the internationalizing companys activities, so it creates competence losses; individual
outsourcing decisions leads to deepening dependence; reinvent and fortify the expanding
companys FSAs in order to not get back from the partner. According to Hamel et al., a
key condition exists to learn efficiently from each other: each company must want and be
able to learn from its partner in order to create new capabilities while staying away from
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disproportionate transfer and diffusion of the home based firms own knowledge5. In
other words, the company has to share some know-how but not all of it. The last danger
we will explain here is about the avoidance of informal information transfer that can
occur at lower levels inside the company. To do so, company values and rules must be
clear and respected for key people and facilities not to be easily accessed.
To go further on the previous data, we will use Erin Anderson and Sandy Jap work. They
mention the dark side of alliances: dependence, exploitation and abuse6. To avoid these,
the authors promote the use of six safeguards to keep away from dark side of alliances.
First, it is really useful to re-evaluate the alliance in order to limit reliability problems
(e.g. overbilling by purpose partners side; being mistaken in contributions estimations
the firm itself). The second safeguard is to keep as a priority the profitability of the
company instead of its production volume. The third one is keep looking for new fresh
alliances to limit the dependency. Then, another safeguard would be to settle the
condition that both partners have to be implied in investments on resources that cannot
effortlessly be redistributed in a different context than within the alliance without
significant losses. Then, Anderson and Jap state that it is important to keep reassessing
the goals that have been settled in the first instance. To finish with safeguards, Anderson
and Jap state that it is important to be confident towards the partner in terms of suspicion;
the goal here is to avoid vicious cycles of suspicion.
To counter all the previous arguments, we must take into consideration the fact that high
distance partnerships are different because they create new variables to think about. The
goals and time frame adopted will be different than for single-country alliance because of
the local culture, economy, and institutions differences. But we also can say that there are
more chances of suspicion (especially when problems are related to differences in
cultures) and to find difficulties to combine resources.
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5
Hamel G., Doz Y. L. and Prahalad C. K. (1989), Collaborate with your competitors and win, Boston MA, Harvard
Business Review #67, 133-9
6
Erin Anderson and Sandy Jap (2005), The Dark side of close relationships, Boston MA, MIT Sloan Management
Review #46, 75-82
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Prashant Kale and Jaideep Anand7 share another point of view. They reference the choice
between private and public company to build the alliance with. Kale and Anand state that
a private local partner is more likely to be useful in the short term whereas a state-owned
ally is better for the long-run because it is less ambitious and consequently companies
have fewer chances to get into a competitive learning race.
2.2.3. Mergers and acquisitions

Finally the third entry mode we considered in this paper, are the Mergers and
Acquisitions (M&A) that allows companies to enter a foreign market directly by
contracting with the local actors. That goes without saying that this kind of entry mode is
limited to the big multinationals that have the necessary resources for it. According to
Ghemawat P. and Ghadar F. there was a real trend in global M&As in the early 2000s
Global Mega-mergers8. This process enables the MNEs to reach a broader geographic
target. The international economical environment added to this M&As trend, reduce to a
few big protagonists in the industries pushing the MNEs to use global M&As in order to
survive in their field of activity.
Even though there are a lot of unenthusiastic insights relative to the M&As, like the costs
or the level of risks taken, it has some optimistic views too. For Lee G.K. and Lieberman
M.B, companies use the acquisitions first because they facilitate an increase of the stock
price, which relativizes the impact of the expenditure9. However as a comparison to the
internal development, it is said that the cost of the entry differs in the way the payment is
made as well. For instance when a company decides to enter a new market through
internal development it has to fund its expenses with cash flow whereas while integrating
a new foreign market via an acquisition or a merger, the payment methods are plenty:
cash flow, exchange of stocks, debts or some other understanding between the two
MNEs. In sum, the costs are higher for the acquisition than for an internal development;
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7
Kale P. and Anand J. (2006), The decline of emerging economy joint ventures: the case of India, California
Management Review #48, 62-76
8
Ghemawat P. and Ghadar F. (2000), The dubious logic of global megamergers, Boston, MA, Harvard Business
Review #78, 65-74
9
Lee G. K. and Lieberman M. B. (2009), Acquisition vs. Internal development as modes of market entry, Los Angeles,
CA, Strategic Management Journal, 140-158
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nevertheless, the relative size of the company helps the decision making as MNEs are
more likely able to enter via acquisition methods than smaller companies.
Another factor that drives MNEs to select the acquisition as an entry mode is the speed of
entry. Compared to an internal development, an acquisition is relatively rapid and
enables the company to be present in its target market within a short period of time10. An
additional fact comes into the game according to Lee and Lieberman: the business
domain of the firm. Undeniably, the authors are explaining in their research that a
company is () more likely to use acquisition when the new product market is distant
from the firms existing products.11 Although, some researches show that a firm can
also acquire a foreign company that is making a product similar to it, in order to expand
or deepen its resources. 12 To conclude this part on the acquisition approach, companies
are more likely to use acquisition when they want to integrate a foreign market in a rapid
way or when they target to expand their resources or sales capacities. Nonetheless, a
company can also use acquisition if it wants to acquire a new product outside its business
domain. In that case, the product it would achieve thanks to the acquisition; will be
closely related to the main business domain of the firm.
This conclude the segment on the entry modes; even though companies are more and
more using M&As when they can afford it, the internal development remains a safer
methods to enter a foreign market, as long as, the balance between the companies and the
local partners is well defined and maintained throughout the development. Likewise, the
selection of the entry mode has an influence on the international strategy development
chosen by the company. For instance, if a company selects an internal development it
would tend to adopt a standardization strategy in order to reduce the production costs. On
the contrary when the company uses the Mergers and Acquisition system it has to adapt
to the existing market and product delivered by the company it acquired.
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11
12
Karim S. and Mitchell W. (2000), Path-dependent and path-breaking change: reconfiguring business resources
following acquisitions in the U.S medical sector, 1978 -1995, Strategic Management Journal #21, 1061-1081
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2.3. RELATIONS BETWEEN THE DESTINATION CHOICE

AND INTERNATIONALIZATION STRATEGY
As it was mentioned in the last part, the destination selection influences a lot, the choice
of the internationalization strategy. Besides, the destination selection process is as
important as the selection of the mode of entry. The entry mode is often related to the
country chosen by the exporting company, but this last element has a lot more
consequences on the strategy that businesses choose to apply to their internationalization
process. Therefore, this study will consider the correlation between the selection of the
country or region as a destination and the selection of the internationalization strategy,
that is to say: adaptation or standardization.
In this subdivision, we decided that companies have to focus, among others, on three
main factors: the geographical localization, the local culture, and the economic situation
of the host country. Along the literary review, these three elements seemed to be the most
reflected points by the internationalizing companies.
2.3.1. Geographical location of the destination

Researches showed that when companies appeal to internationalize, the selection of the
geographical location is a fundamental criterion. The destination market is also an
important factor that pilots the entire internationalization strategy of the company. In this
section we will see how the geographical condition of the destination market related to
the geographical location of the company turns out to be really important concerning the
selection of the strategy.
In his article, Distance Still Maters, (2001) Pankaj Ghemawat, stipulates that the distance
between the domestic market and the overseas market of a company is a very important
topic. He also specifies that the impact of the distance can have more or less effect on the
business development according to the companys industry 13 .
Furthermore it is
important to know that firms often implement their expansion strategy in a slow and
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13
Ghemawat P. (2001), Distance Still Matter: The Hard Reality of Global Expansion, Boston MA, Harvard Business
Review #79, 147
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regular way. In their article, Tsai H-T and Eisingerich A B indicate that companies start
internationalizing by entering markets that are close to the domestic market14. Also
Ghemawat research displayed that In general the farther you are from a country, the
harder it will be to conduct business in that country15.
Another point that companies have to take into account before expanding internationally
is the physical attributes of the destination country. The distance not only matters but the
territory has to be reachable easily by the transport either through maritime way or via
road or flight. The infrastructures provided by the country have to be as good as the
business opportunity. This subject will be seen in the third section of this part, as it is one
of the key factors for a company in full expansion.
Concerning the strategy, a company will tend to choose standardization while entering
market close to its domestic market. Several different points show that when a firm
selects a country having common borders with the companys home country, the
standardization will help the company to keep low costs while globalizing. By
standardizing the production and the distribution along the marketing strategy, the
exporting company will be reducing costs and risks as the distance between the countries
are low. However this assumption is made only regarding certain industry as P.
Ghemawat shows it in his article16. Nevertheless, the author also confirms that the
distance matters and it is not only geographical. Ghemawat illustrates this by taking the
case of STAR TV in Asia. In appearance the Asian countries located in the same area,
have shown a demand for new TV channels. Hence, the American company presumed
that, there was a demand for English program and chooses to not differentiate its offer
between the countries. So in short, the entire zone had the same TV programs whether it
was a Chinese country or Indian or even Malaysian. At the end of the day, the company
recorded an unexpected loss of $500 million between 1996 and 1999. In this situation,
the choice of standardization, even though the distances between the countries were low,
was a real disappointment for the company.
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14
Tsai H-T. and Eisingerich A. B. (2010), Internationalization Strategies of Emerging Markets, California, Californian
Management Review Vol. 53 #1.
15
Review #79, 147
16
Review #79, 147
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This STAR TV case brings us straight to the second section of this part, which is the
Cultural aspect as a criterion in an expansion strategy. Indeed, the distance between a
companys home market and the destinations market is not only about the geographical
distance. It also concerns the Political, Economical and predominantly the Cultural factor.
2.3.2. The local cultural aspect

When companies choose to go international, a choice has to be made on which country to
enter. We saw in the last part (2.3.1) that the geographical location, or geographic
distance, is important to consider for taking a decision between adaptation and
standardization. But this component also deals with the local culture. As we can observe
it in some cases, some regions or areas of the planet contain similar cultures or same
philosophy foundation. In other words, as an example, countries being part of the
European continent share a lot more similarities between each other than with any other
Asian country. Before going further, we should define that we consider culture not only
as the set of values, norms and traditions, but also as business customs and practices.
Now, it is even clearer that the cultural behavior of the host country is an important
variable of the strategy determination.
Companies should take the cultural variable in serious consideration. Levitt (1960,
p.56)17 states: It is clear that a company should take actions that stimulate the demand. It
should adapt itself according to market requirements and this should be done sooner or
later. The fact is that markets influence businesses and not the opposite. In other words,
it is essential to be aware of a society needs and consider them when entering a market to
do business; because business is shaped and applied by societies. Standardization is not
bendable enough to adjust to policies of different markets like requirements for
environmental defense, standards on merchandise safety, and other local rules.
Adaptation, according to some authors such as Levitt (1983)18, is expensive. We can
observe nowadays, entire industries becoming international, differences in cultures,
national tastes and standards becoming concepts of the past. That is to say, global
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18
Levitt, T. (1960) Marketing Myopia, Boston, Harvard Business Review Vol. 38, 45-56
Levitt, T. (1983) The globalization of markets, Boston, Harvard Business Review Vol. 61, #3, 92-101
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preferences are emerging and consequently, standardization becomes mandatory, or more
reasonable. Standardization is very useful when economies of scale are possible, because
it allows decreasing design, production, distribution, and advertising costs As a result,
standardized products are more successful and competitive as prices can be reduced
comparing to competitors. But, on the other side, standardization and quality of products
have a negative relationship whereas adaptation has positive one. The interest is that
products with a higher quality are more likely to compete against foreign products: it
allows the company to gain market shares. From the moment in which the company
becomes more profitable and gets a stable position within the market, standardization
becomes the best solution. In fact, these two strategies can be opposite but also
complementary in the way that one comes after the other. Indeed, as an effective
standardization strategy comes with economies of scale, financial / economic means are
needed.
When entering a market, adaptation is the most realistic: if the company has the
necessary financial resources: the company learns from the local culture, creates products
that will penetrate the market with a high quality. Also, the company chooses to deal
with local actors as the market keeps being unknown, they share knowledge and
capacities. Then, the company becomes more powerful against competitors. Moreover, it
earned enough money to be able to invest seriously in the host country. Investments will
be done in production capacities, human resources, marketing and distribution
Companies will take advantage of its dominant position, its power towards competitors
and actors of the industry. This is when standardization becomes a serious alternative:
companies are now able to start produce the same products as in the other countries of
the region assuming that they are already settled in those states, or even the country of
origin. Costs reduction can be done in marketing, production, and human resources
The company becomes a serious rival with huge production capacity. We will discuss
deeper this evolution in strategy stages in the following part on the company specificities.
Culture may also impact the choice between standardization and adaptation from a
different point of view. Different cultures can have distinct approach of the
internationalization strategies. Indeed, companies, according to their own nationality or
the one of the country they are entering, can be used to standardize some areas of the
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firm. For example, American managers are more likely to standardize planning and
control. On the other side, German managers usually standardize production and quality
systems. In these examples, Germans and Americans have a different approach to their
competitive advantage; they consider it from a different point of view. To be more
precise, Americans concentrate their efforts on share or stock value and the progress
whereas Germans prioritize manufacture and technology.
In short, the Cultural aspect in an internationalization process is a must for companies. It

allows them to choose either adaptation or standardization strategy. Furthermore, authors
showed that not only those factors are important but also the economical situation of the
host country represents a high determinant for the global expansion of a firm.
2.3.3. Economical situation of the host country

The economic situation of the host country is a very important determinant of the
internationalization strategy. Indeed, it allows companies to have a snapshot of what the
host country is capable of in terms of investments, development, infrastructures,
competition, market demand and offer, etc.
The fact is, that according to the stage of development of the country, possibilities
change and consequently, the strategy of internationalization changes: adaptation or
standardization. Standardization usually needs economies of scale. To be effective;
infrastructures, equipment and qualified workforce are needed. The necessary
infrastructures are mainly an issue as, if they do not exist, the company will have to
invest a lot more money on its expansion project.
This is an important point to consider. The host country can have restrictive rules
concerning investments. In some countries such as China, Argentina, India or Brazil, a
joint venture, or substantial amounts of money are demanded by the government to
deliver an authorization to a company to settle down in their market. These policies can
be qualified as protectionists, however these emerging countries tend to catch up their
backwardness compared to the developed countries. This is one of the reasons why they
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try to protect their own economies. The goal here is to privilege the domestic companies
first.
Actually, the degree of openness of the host country companies is an important variable
to take in consideration. Undeniably, the company entering a country needs to know if a
partnership is possible with a local firm. By finding if the enterprise is globalized, which
kind of experience it has and in which sector These questions are even more important
for the entering company. It is primordial for the strategy of the firm. Indeed, it will have
to choose between several partnerships possibilities, or a local development. It has a lot
to deal with the mode of entry of the firm. And as we saw earlier, the mode of entry is
mandatory for the internationalization strategy. The number of global companies in the
host country is a good indicator of its openness, as the number of foreign companies
already implanted. The more open the country is; the more it is willing to accept Foreign
Direct Investments (FDIs) entering in its territory. This would mean that investments on
infrastructures, as well as training and development have been made in the host country.
Consequently, the country is able to welcome companies with high-technological
requirements, which produce goods with important value-added.
Another point the company going international has to consider is the politico-economic
situation of the host country. We mean here its adhesion to international organizations
such as the World Trade Organization (WTO), the International Monetary Fund (IMF),
and the Organization for Economic Co-operation and Development (OECD). The
membership to one or to all of these organizations is a good index to openness towards
the international environment, but it also gives an idea of the rules and regulation
applicable within the country and its honesty. In other words, it allows companies to
understand if the country respects international business regulations. A country, which is
closed to these organizations, is more likely to deny global procedures and local
investments by being very protectionist.
Also, to connect this part of the research concerning the Geographical Location (2.3.1),
companies going international have to look at the relationships of the host country with
its neighbors. To go deeper, the firm also has to look at the business connections like
free-trade agreements. This kind of variable will determine which kind of
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internationalization strategy is preferred. Indeed, a standardized strategy is easier to settle
down if connections exist across neighbors, as it would grant an access to the market and
thus make the distribution easier for example. For instance, assuming that a company is
willing to develop its business to China, among all opportunities that China can give the
company, its connection with the Asia-Pacific Economic Cooperation (APEC) allows the
company to produce in the Popular Republic of China and then export to California,
USA for example. This kind of correlation can be very helpful and smoothen the
progress of the internationalization.
This analysis on the host country capabilities and economical situation closes the
segment on the destination selection. Proving that accordingly to the selection of the
destination, a company will be influenced for the validation of its internationalization
strategy, between Adaptation and Standardization.
So far we did analyze two main factors that a company has to take into account while
getting global. Nonetheless a third factor is as much if not much more important for a
company before going abroad. We are here mentioning about the firm specifies.
Obviously before entering a new market a company has to evaluate its internal asset so it
can decide which internationalization strategy will be the most appropriate.
2.4. COMPANY SPECIFITIES

This part deals with the last variable that has been considered for this study, the
specificities or capabilities of the company. In other words, we will mention the structure
or development stage and the organization of the company. Moreover, we will see that
the sector in which the company is operating is relevant for the choice of the
internationalization strategy.
One of the most important points that a company has to do before going abroad is to
assess its own structure and capabilities. Indeed, companies have to ensure that they can
grow internationally and therefore be able to compete with local companies in the host
country market. According to several researches on the internationalization process, the
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planning part and the commitment to the project are key factors for a company that wants
to go on an international market.
2.4.1. Internal assessment

On the very beginning a company that wants to internationalize its market has to assess
in a first part, its financial capacity to go abroad. It is obvious that in the aim to settle
markets in foreign countries, a company has first to be well set on its own domestic
market. Therefore it has to obtain the adequate amount of cash flow in order to run the
internationalization process, whether it is through an internal development (that is to say
exportation) with foreign distributors or with alliances or even acquisitions, in these three
ways the company has to develop enough financial resources to get to the target market.
Following the financial resources, the company must have an internal organizational
development that would allow the company to face the external market. For instance, in
Human resources, exporting companies have to ensure that the personnel can deal with
international business. Consequently it may be essential that the companies change their
organization structure in order to have a department specific to the international
development. Therefore, human resource adaptation is a key point for the companies.
The subjects mentioned just above are key elements for the selection of the
internationalization strategy. A company that has a lower financial resource will tend to
develop its business in neighbor countries and will therefore tend to standardize in order
to reduce a maximum the costs and risks, whether it is in communication and
advertisement part or in the production processes. On the contrary, a larger company
with higher financial resources will tend more toward an adaptation strategy as it can
afford it. The structural organization will therefore enable a change and the creation of an
international business department.
Linked with the organizational changes, the recruitment of human resources with specific
skills will be considered by companies and especially for the International Business
department. The employees will have to be fluent in English and may be with other
languages spoken on the targeted country. For instance, if a company decides to
internationalize in China a part of its business, either the production part of the selling
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part, it has to call for a human resource that can deal in English but also in Chinese. Here
again the financial resources is linked to this and allow a flexibility for the company.
Finally, as we exposed it earlier in this study, the knowledge on the host country is an
indispensable element for the exporting company, through this knowledge the company
will thus be deciding either to select an adaptation strategy or a standardization strategy.
2.4.2. Companies industry and international strategy

selection
Another important aspect for a company that we have to take into consideration before it
goes international, is the sector or industry in which the company is present in its home
country and wants to develop internationally. The relation between the industry of the
company and the selection of the internationalization strategy is a very important element
to consider.
Some industries involve standardization in the international process of companies for

instance; some companies in the Information Technology industry are international from
the beginning. They are called Born Global. Those companies have a worldwide offer
and therefore are much more in standardization than any other industry company. The
globalization made the international business easier for the world and especially for those
companies that face the exact same demand from a country to another, facilitating the
standardization of the services. We can state some generalities on the relation between
the IT industry and the standardization. Indeed, we can affirm that companies coming
from this sector are more lead up to be born global. The best example comes from
companies acting on the web. This is the most globalized tool ever created. As the web is
accessible from the entire world it allows a wide targetable window. Therefore
companies are more likely to reach a wider audience through the Internet and they
standardize their offer in order to cut cost but also as it is recommended for this platform.
Also these companies coming from the Information Technology (IT) sector do not need
big structures: indeed, as a software developer, they do not need to have local structures
to respond to its demand. It can act from the country of origin and be fully able to answer
correctly the demand. Here the product, marketing, distribution are standardized.
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Nonetheless, sometimes IT companies faces also a cultural gap between the countries
and therefore they do adapt a minimum in order to reach their target. This adaptation part
is frequently concerning the language and the timing.
If we consider another sector such as the retail, it seems obvious that the standardization
strategy is slightly different. Indeed, in this sector, there are no such standards considered
like Internet for the IT sector. The retail sector, can be developed with the standardization
strategy, however an considerable adaptation part is recommended to companies in order
to acclimate with the host country market in terms of language, habits and opening time
that could greatly vary from a country to another. It is a fact that each country has its
own standards in terms of quality, security, warranties, legal rights, etc. The main point
of this segment is to argue that according to its sector of activity, the company is more or
less led to standardize or adapt its international strategy.
To finish our illustration the catering industry requires more adaptation from the
company in order to reach the international target as the cultural impact is greater in this
sector than in the two sectors we mentioned above. When developing, they will first
attain a regional dimension (country scale) and then the national dimension. When the
market of origin is conquered, the company will want to extend its market and will start
to invest in foreign countries.
At the beginning of the internationalization, the companies tend to standardize since they
record a lack of experience, or a lack of cash flow, etc. Also, these companies will, at
first, start finding local partners or advisors in order to better know the market. The first
step of any internationalization strategy is to conquer the market. There is no other way
to conquer a market than by acquiring market shares. From the moment in which the
company consolidates its position in the host country market, the company is able to start
adapting its strategy. Indeed, from this point, the company should have enough cash and
experience to start this strategy.
We have seen in this part that not only the external factors of the company are important
to take into consideration before going international; but also an internal assessment of
the company capacities is essential and will drive the strategy selection. The structural
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organization, financial capacities and the industry in which the company is present are
therefore most important factors that motivate the selection between adaptation and
standardization.
This concludes our literary review on the criteria that drives a company to select its
international strategy (adaptation or standardization). In short, a companys financial
resource and mode of entry, adding the destination selection and the organizational
capabilities are essential elements determining the selection of the international strategy.
Nonetheless, the industry in which the company is developing its business is also a key
factor in the choice of standardization or adaptation.
In our next section, we will be dealing with different enterprises cases in different
industries and try to explain their international strategy selection.
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3. CASE STUDIES IN THREE DIFFERENT INDUSTRIES

3.1. FAST-FOOD INDUSTRY ANALYSIS
In this section, we focus on the catering industry. By choosing two different
establishments existing globally, we will be able to analyze the selection of their
internationalization strategy and by this way to compare them. In order to proceed, we
choose two big restaurant chains as McDonalds and Starbucks Coffee Company. The
two of them are positioned on the Fast-Food market. These restaurants are known for
their international openness, as they are present in the five continents. They particularly
have different strategies, facilitating the comparison.
3.1.1. McDonalds: Think global, act local

McDonalds is one of the most well known brands in the world. With their thirty-three
thousands locations in a hundred and nineteen countries, they serve sixty-eight million
customers every day. Their international strategy starts with franchises: historically
because their first franchise opened in 1955 (the company has been created in 1940) from
a proposition of Ray Kroc, and kept being franchised until nowadays; conceptually
because franchising is part of their internationalization strategy, it is actually the basis of
their going international strategy. McDonalds had net revenue of $8,529 million in
2011 for the USA and $18,477 million from its foreign stores. The company encounters
an increase of 15.8% in their international market. Then, McDonalds strategy uses a
strong foundation of standardization, which allows the firm to conquer foreign countries
with confidence; this standardization is then mixed with elements of adaptation to the
local cultures.
The adaptation strategy started in the mid-90s when the company thought about the
regionalization of its restaurants. The idea was to propose culinary specialties according
to the different habits of the local population. But lets talk first about the standardization
part of McDonalds. The core activities, departments of the firm have been standardized.
The main goal of this standardization was to reduce the number of suppliers and weight
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of costs. Consequently, the buying costs diminish, as the time spent on production,
distribution, etc.
The advertising is also standardized. Indeed, the priority in advertising is the television,
spending around two million dollars per day on this promotion channel. In 1963, Ronald
appears for first time on an advertising spot in the USA. At this time, the main targets
were families and especially children. That is around this time again, that the Golden
Arches becomes the most know logo worldwide. The advertising is not hard to spread
globally as the products, slogan, image, packaging are all the same. Indeed, it is part of
McDonalds rules: some of the products sold in these restaurants keep being the same:
burgers and mainly menus can be found in any franchise of the firm.
Employment is also standardized. Obviously, in this case we are not focusing on the
people but their processes. McDonalds counts about five hundred thousand employees
worldwide who have been taught the same procedures and methods. They reproduce the
same movements, which are minute and controlled. They repeat the same sentences and
look at the eyes at the same moment (when they give customers change back for
example). Employees have to be homogeneous, such as the products and brand; that is
also why they all wear the same uniform. They actually are trained with the same
textbook which transcribes all the rules about preservation of food, the cooking time,
the cleanliness, but also the partition and distribution of strictly defined tasks. For
instance, only the cooks are authorized to touch the food. These textbooks and strict
rules are what enable McDonalds to perform their objective of same products and same
services and finally, the ultimate goal to reduce costs and attain economies of scale.
Now we defined all the solid bases of the company, which have been standardized, what
follows will explicit the adapted aspects of McDonalds Corporation. The marketing and
products offered are the main points that suffered from adaptation. Here, the almost only
variable is the local culture, which shows its importance for MC Donalds but also for the
catering industry.
First, the architectures and atmospheres have been modified throughout countries and
cultures. The goal was to not get people bored too, and diversify its offer. The websites
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are translated, designed differently according to regions. But the main adaptations have
been made on the products part of the Marketing Mix. The firms specialties have been
adapted to the local tastes. For example, in India, most of the burgers are made from
lamb or chicken. And they created the Chicken Maharaja Mac in New Delhi (see
Appendix 1), just like the Kebab Burger in the Middle East and the McSpaghetti Noddes
for the Philippines. Actually, the franchises helped a lot on the adaptation processes, and
made their contribution to the apparition of beer in the European franchises, but also the
McArabia in the Middle East (see Appendix 2).
Also, they looked deeper in the socio-economic factors and discovered that French
people were more dietetics centered, especially women. Consequently, they created the
Salad Plus. Since then, their target focus changed a bit to the adults. At the opposite,
about the same period, McDonalds released the menu Best Of XXL for the American
people. Another excellent example would be the soup: it is a very interesting example of
adaptation because they kept the same product for different uses according to the habits.
In France, soups were soups; but in the US, the soups were used as sauces. Here the
communication on the offer becomes different.
Adaptation is also performed regarding the accessibility of the restaurants. Thanks to the
Big Mac Index (REFERENCE SUR LINDEX), studies have been able to determine that
you do not need the same number of hours to get a Big Mac, but mainly that prices are
different across countries. The famous burger will attain its top in terms of price in
Switzerland (USD$ 6.81) and Norway (USD$ 6.79) but the cheaper in Ukraine
(USD$ 2.11), and India (USD$ 1.62) (see Appendix 3).
To finish, an example of a very adapted strategy will be explained briefly. The adaptation
here compares two sites in the same country and same town. We talk here about La Paz,
in Bolivia. In 1998, McDonalds opened two restaurants: one in Downtown and the other
one in the Southern part of the city. The places were the same, displaying the same
products, offering the same recreation spaces for children, same service, etc. The
difference remained in the target. Indeed, each restaurant had its own target: the one in
downtown was meant to middle-class people whereas the Southern one was intended to
the upper class. Consequently, the physical aspect of the waitresses was different: long
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black braided hair for the middle-class; blond, blue eyes, Germanic style for the upper
class. The goal for the company was to make these businesses profitable taking
advantage of the local socio-ethnic division already existing in the city to drive them for
economic aims.
3.1.2. Starbucks Coffee a unique experience all over the

world
The subject of this paper drives us to select a company in the catering market, developing
in a global market and well known as well. Starbucks, our second choice, is the world
leader in Coffee retail. With a worldwide presence, Starbucks counts around seventeen
thousand shops, with a pace of three new stores opening every day. The company was
founded in 1971, in Seattle and since then, it opened in more than fifty countries around
the world. Starbucks recorded in 2011 net revenue of $8,038.0 million in its home
country USA and net revenue of $2,626.1 million for its international stores, which are
increasing by 13% compared to 2010. Conducting such a significant international
expansion made the company realizes the importance of the strategy choice.
The company uses mainly acquisitions or joint venture to enter international market. For
instance it bought out sixty-five Seattle Coffee Company Stores to enter the UK market
in 1998. We can see in this section that the entry mode of the company depends on the
configuration of the host country. Still in 1998, when Starbucks entered the New Zealand
market, it did it through a kind of joint venture; by opening its first store under the
Restaurant Brands New Zealand Ltd. The company used thus a licensing process. In
2001, while entering the Spanish market, Starbucks decided to go through joint venture
in order to share the financial risk and joint hands with VIPS; a local leading company
specialized in full service dining. The company now shares the control at fifty percent in
Spain with its local partner. Each time, the choice of the destination allowed Starbucks to
expand a bit more within the region. After opening numerous amounts of stores in New
Zealand the chain started its growth all over the Pacific-Asian market. New Zealand
benefiting from special free trade agreements with the APAC and a free trade agreement
with China since 2001. It helped greatly the openness to the Asian market. Also right
after entering Spain, the company started to develop all the Western Europe market and
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in particular Spain, France, Switzerland and Austria. Using partners in the new
international markets will allow Starbucks to have an entity that knows very well the
local market and thus will help for the recruitment and for the understanding of the
market condition.
Before going further on the strategy selection of Starbucks, we must remind the
companys general strategy. The Seattle based company does not consider itself as a
company that serves coffee to people but as a company that serves people with coffee.
That is to say, that, Starbucks puts a huge focus on the consumer and the consumption
experience instead of focusing on the products. The core competency of Starbucks is to
offer a great experience to the customers within its coffee shops. Howard Schultz, CEO
of the chain even declared that the company wanted to create a Third Place. It would
be a place where the consumer can have a unique experience and in a long-term the
Starbucks Coffee Shops would be the third place between Home and Work.
Having said that, we can express that the international expansion of Starbucks reveals a
part of standardization strategy. Indeed the Starbucks Culture often confused with
American culture outside the USA is the main product (service) that Starbucks exports.
In a research from the Journal of International Business Studies (2008), Starbucks is
designated as a Window to American culture. Wherever it develops its business,
Starbucks permanently sticks to its main competency: unique experience of the consumer
in its stores. People can travel to the USA, the UK, Japan or Spain; when they enter in a
Starbucks they will instantly recognize the value of the company and its high level of
quality service. That creates an identity for the store and therefore Starbucks can benefit
from it. Starbucks do not only standardize concerning the selling service but it also
develops a certain standardization regarding the selection of the location and the store
configuration. All of its stores are located in place where there is a high pedestrian traffic,
sometime based in the center of clusters with numerous coffee shops and other fast food
and commercial centers.
The coffee shop chain has some interesting benefit from standardizing. Indeed, by
creating the same value in each and every one of its stores the company is able to have a
unique training process for all its employees and convey the company cultures through
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different steps of training. Also it does not have to adapt the arrangement of its stores
differently according to the country and thus profits from a certain cost reduction through
it. We saw in our first part, a notion called distance, as we saw it, not only the
geographical distance is important but also the cultural distance is one of the most
important points for internationally developing company. There are enormous cultural
differences between the countries where Starbucks is present. For instance, the Asian
culture advantages the Tea consumption instead of the Coffee. Also, there are differences
in the consumptions according to the country that differentiates the product ranges
present in the stores. In order to not loose customers because of these cultural gaps,
Starbucks decided to adapt its product ranges in both food and beverage according to the
country and the regional culture.
As an example, the consuming process of people differs also from a country to another
(figure 1).
Figure 1: Difference between American and European Starbucks Coffee customers
The figure 1 above clearly shows us that the American customers rather want to take
away the coffee instead of spending time in the coffee house like Europeans do.
This case study about Starbucks distinctly shows us that even though a company chooses
to focus on a standardization strategy it will be pushed to adapt even a little because of
the cultural gap present between the different markets. We have seen with the
McDonalds case that local culture is an important factor to take into account for the
international company. Here again, there is a part of standardization in the recruitment
process and training with the Hamburger University and the training programs.
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Standardization will therefore help the big company to reduce some of its cost and
adaptation will enable it to target a better customers.
However, there is another kind of restaurant chains that do not always call for adaptation.
If we take the example of the ethnical restaurant, targeting a particular kind of people
coming from the exact same country of the company. In this case we mentioned two big
American companies, but there are also several small restaurant chains that expands
internationally which are targeting the people of its diaspora. For example, Anjappar,
which is an Indian food restaurant. Anjappar is well-known in the South of India, in the
Tamil Nadu state where it has its beginning in 1964, since then, it opened around thirty
branches in India but also across the world in the UK, the USA, Singapore and Sri Lanka,
mainly targeting the Indian consumers residing in those overseas countries. The targeting
of these company do not really need an adaptation, on the contrary it has to be the same
tasty food that people could have degusted in their country of origin.
This little segment on the ethnical food closes our section concerning the
internationalization of companies from the catering industry, showing that companies in
this field of activity have to accurately balance the level of standardization and the
adaptation part in their international strategy in order to successfully settle down in a
foreign country.
3.2. RETAILING INDUSTRY

The retailing industry is our second part of the case study segment. It illustrates well the
idea presented all along our thesis. To process to these case studies we selected two
important multinational enterprises. The first one is a Swedish retailer specialized in
Home style and furniture IKEA whereas the second one is a French multinational
retailer. By analyzing the international strategy of both of these MNEs we will be able to
more locate the factors that contribute to the selection of the international approach.
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3.2.1. IKEA, global retailer faces the Chinese market

Our first case study in the retail industry will focus on the Swedish Home furnishing
retailer IKEA. For most of the authors, IKEA is often a great example when they
mention about globalization and global retail. Created in 1943 in a small Swedish
village by a Swedish of seventeen years old, IKEA is now one of the most recognized
retailers in the world. Present in forty-one countries all over the world. The group owns
three hundred and thirty-three shops and as an annual result in 2011 of twenty three
billion euros of sales. Before going further in the international strategic analysis of the
company, let us quickly review the company culture and its aim.
The IKEA vision is to create a better everyday life for the many people. We make this
possible by offering a wide range of well-designed, functional home furnishing products
at prices so low that as many people as possible can afford them.19 This statement
clearly announces that the company focuses on a low price product with an important
consideration to the design and the functionality. This drives us to the marketing strategy
that the company uses. IKEA has its own culture, the stores are located in city periphery
with large parking lot and near highways hub. The most important point communicated
by the company is that they sell products at low price but people have, not only to select
the product but also to carry it from the warehouse (usually in the ground floor of the
store) to their car then once at home, the customers have to assemble the furniture
themselves. It is in fact the democratization of the DIY (Do It Yourself). This system
enables the company to lower it costs and to create a sort of cult for the company by its
customers whom seems to enjoy manual work and get a certain pride from the
accomplished work.
One of the most important point also is that likely to Starbucks Coffee Company that we
analyzed earlier, IKEA, implement a strong company culture and tradition and therefore
creates buzz and movement around each of its opening. Its strategy is to implement
smoothly the company in a market before an opening by letting people test and write
about the products facilitating the word of mouth. Also in markets like in Europe or USA
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
19
IKEAs corporate website.
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and Australia, the DIY method has been redirected into a communication strategy by
enhancing the result that assembling a product procures in a customer.
Concerning the production and the sourcing, IKEA decided to not only sale the product
but also to source the raw material, to produce it and to sell it to the consumer. Part of
their international business is the sourcing and production parts of their business, which
are located in the three main continents where the company has huge markets i.e. Europe
(Poland), USA and Asia (China).
This transition brings us to the internationalization strategy of the firm. IKEA developed
its global retailer designation in few decades. The standardization approach selected by
the company leads it to the international markets and brought the company founder in
one of the top wealthier man of the planet. Concerning the internationalization, the
company took at first a regional development strategy by settling down into the
neighboring markets with the same cultures and languages and in a second time the
Swedish firm entered farther markets such as the USA and then China. IKEAs approach
has always been the same; it launches the stores in a new market without establishing any
prior analysis of the market and then it allows itself to adjust the offer according to the
local market if really necessary. Standardization helps IKEA to set up the same offer in
each of its markets. It has a large range of products, displayed in the same way in all the
stores of the world and with low prices. The communication part is done with the catalog
which, according to IKEA takes up around 70% of their marketing budget. This catalog
is the same for every country; it is however translated in 27 languages and published in
200 million copies annually.
Very few adjustments are made in the catalog according to the location, and sometimes
the only thing that changes from a country to another is the cover. Undoubtedly this
standardization strategy benefits the firm to reduce its production and marketing costs
allowing some economies of scale. Also in all the country, IKEA tends to set its stores in
the suburb of the cities with large parking facilities and near highways. The location of
the store has been an important point for the company, as it has to offer the possibility to
the customer to carry the products to its car and transport it till the house. Even though,
there are more and more home delivery facilities offered by the company.
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Nonetheless, the company that tends to fully standardize its concept has also some
trouble to succeed in it without adaptation. Indeed, IKEA delivers products that are
slightly different according to the country culture in order to please the local consumers.
That happens in USA where the products are resized considering the local market. Also
the European markets products are heavier and larger than in the Asian market. Moreover,
the display of the furniture and the rooms in the stores differs also from a country to
another in order to accommodate with the local tradition, for instance in China, the room
are smaller whereas in USA they are larger and in Sweden they have a bigger part for the
clothing section. Another aspect on which the giant retailer chooses adaptation is
concerning the service: for instance in USA, people are more used to shop 24/7 and
therefore they look for an after sale service that runs 24 hours.
Although, those adaptations are relatively small and do not incur important cost to IKEA,
there are an entire adaptation strategy that IKEA had to takeover in one of its country.
Indeed while setting-up its stores in China, the Swedish company entered into a
significant change for the first time in its international development strategy. The level of
competition that succeeds in copying the IKEA products made the company to choose a
different aspect of its core competition as a key success factor. Indeed, according to a
case study, people came to the IKEA and were drawing the furniture without aiming to
buy it. Therefore the firm decided to concentrate not only on the product sales but also on
the interior design and started to help Chinese to modify their interior with IKEA
products. It went till having TV shows in order to give interior design class to the
consumers. Another important factor that the company registered in China was the price.
Indeed, the Chinese market is abundant of cheap product made by small manufacturer
that copied IKEAs main goods. The company had to completely change its image in
China, with the aim to succeed in such a different market. By changing its image from
low cost but quality product, the company went to high cost product with quality and
taste. It targeted young and wealthy customers that could afford the products but also that
were more impulsive from the other segments. Also, IKEA changed its standardization
strategy towards an adaptation strategy concerning the location of the shops. The primary
target of IKEA was to drive traffic, which would drive more sales, and therefore it sets
up its shop nearer to the city center and instead of highways it has centered the store
between the local public transportation in order to drive more traffic and to adapt to
Spring, 2012
35
Chinese tradition. Even the parking lot was no more in an open space but in the
underground of the store. Finally, on the services aspect, the Chinese being unfamiliar
with the DIY methods, the company started to offer delivery and assembling of the
furniture. Thus, it created a new kind of deliveryman that also assembled the product at
home. This was driven by the change of the image from low cost product to high-class
product. People, which were paying more for a product, did not want to assemble it
themselves. However, smoothly IKEA recruited hostesses for the store that helped
people to understand the IKEA cult and made them change their mind.
This case on IKEA showed us that the standardization approach in an internationalization

strategy may help for several countries thanks to the strong companies culture,
nevertheless, it is not possible to standardize everywhere, especially in farther countries,
which have a complete different culture from the home country. Therefore, adaptation is
a solution to enter the country and as IKEA is doing it, it also comforts to implement the
company culture in order to go back to standardization in a long-term process.
3.2.2. Carrefour entering the Japanese market

Carrefour is our second enterprise that we will be studying for this thesis. This French
retailer is implanted all around the world, combining around twenty four thousand
markets in approximately 29 countries. Their internationalization strategy worked
worldwide and strongly in Asia except in Japan where they had to make modifications of
the original plan. The firm did not take into consideration that Japan is a very different
country in terms of development, consumerism and way of life. In other words, Japan is
far from being like the rest of Asia can be.
The following part will present the failure of Carrefours entry in Japan within its choices
in terms of adaptation and standardization of their internationalization strategy. The
choice here of Japan is justified by the fact that despite being one of the main failures
from Carrefours intent to entry a market, it is also an excellent example of
internationalization strategies as Carrefour tried both adaptation and standardization, at
different time periods and levels of integration.
Spring, 2012
36
In 2000, when Carrefour arrives in Japan, their first idea is to implement the
internationalization strategy that worked so well for the other countries of Asia, entering
the market, standardizing the Asian strategy. The core element of this strategy is creating
the Japanese style of hypermarket. The company wants to sell local products, becoming
closer to the local suppliers. Indeed, the firm is close to the local actors and being
supplied from local producers, in other words, Carrefour is implementing a localizationoriented merchandise assortment 20 . Carrefour simply used its worldwide successful
strategy of running with local suppliers for suggesting goods common to the local
marketplace. It is clear that we can think here about adaptation of the offer. The fact is
that they did not adapt to the local culture expectancies, they standardized their idea of
how approaching Japan as if it was like another Asian country. Nevertheless, the
Japanese market, as the American one, is not used to buy food products and not food
products at the same place, for instance. However, the organization of the Carrefour
hypermarkets as we actually know them do not suit the idea Japanese customers have on
retailers.
Also, Japan is a country, which has one of the worlds strongest luxury brand markets
represented by a large group of consumers qualified as high-income households. This
point results in a smaller market for low-priced products. As a result to this trend, people
were demanding European products. Carrefour has the French image of luxury goods
that Japanese people want to discover. However, Carrefour is implementing a strategy of
low price, which brings an image of low quality products. The low price strategy is badly
considered in Japan, as Japanese customers are brand conscious, price sensitive and
above all, they are looking for great experiences. They expect from shopping to discover
an entertaining experience consuming products that enhance their lives. On their price
sensitiveness, we here talk about their perception of low cost retailers that does not fit the
Carrefours customer profile that is supposed to be wealthy.
In 2001, Carrefour changes its strategy. The French company realized they made a
mistake dealing with Japan the same way as the rest of Asia. Their internationalization
strategy will change from that moment and they will adapt their strategy to the Japanese
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
20
Baek, J. (2004) How does the Global Retailer Localize its Format?: the Case of Toys R Us and Carrefour in
Japan, The Haworth Press
Spring, 2012
37
consumers expectancies. Consequently, Carrefour changes their food policy. The
problem of Carrefour was to not been differentiated to the local competitors because the
firm was proposing local products. Consequently, Carrefour could not get the results they
were expecting to get. Their new food policy is focusing on imported goods,
emphasizing on French ones and Carrefour products were pointed at in order to be used
as merchandizing focus. Organic food also started to find its own place in the stores
highlighting the freshness and excellence of fresh food.
The modifications were not only on the products offered to the Japanese market, it also
emphasized on the organization of the supermarkets. Introducing these new products
coming from the companys original market, Carrefour created special selling floors
dedicated to these branded imported products. As we can see in our European countries,
Carrefour retail stores are organized in a way that all the food products are systematically
gathered in the same selling space. The idea here was to concentrate in one unique area
all the grocery section: meat, fresh fish, fruits and vegetables, etc. which were separated
one from the others.
The main idea of this whole change was to position Carrefour as being different from its
Japanese competitors in terms of selling format and at the same time being more closed
to the type of hypermarkets being present in Japan. In other words, Carrefour had to
change its offer to differentiate from the competition (emphasizing on imported products),
and applying the same methods of selling (food concentrated at the same place in the
hypermarket, etc.).
Along the years of the establishment of Carrefour in the country, Carrefour changed its
internationalization strategy as it is shown in the Figure 2. This figure shows that the
company entered the market with a standardized approach regarding its strategy in Asia.
Then, the firm adapted its strategy to the host customers expectancies, importing
European products. When the local model was implemented, a new standardization phase
started. Indeed, since their selling methods, the supply chain, the organization of the
stores, and etc were well implemented, it was then possible to gain economies of scale
as it was performed efficiently. Consequently, they standardized their new way of
running the stores and implemented this new organization to all Carrefours markets
around the country.
Spring, 2012
38
The adaptation phase seemed to be crucial and apparently saved Carrefours intent to
enter the Japanese market. As Mukoyama (1996) says: It is generally said that the
adaptation to a local market is indispensable for a retailing company. Obviously, this
assumption has to be carefully considered because it has to take into consideration
among other variables the degree of environmental difference in the targeted country, the
bargaining power of the competition, etc.
Figure 2: Strategy Action Clarified by Stages

Mukoyama, Masao (1996), Take-off on the Pure Globalization, Chikura Shobo.
This case on Carrefour retail in Japan closes the segment on the retailing industry and we
can conclude that both of these important multinational firms have been setting their
internationalization approach based on a standardization strategy. Nonetheless, we could
see that in both cases companies had to adapt in the countries that we can qualify as the
farthest from the home market. Once again, this section on the retail industrys
internationalization strategy shows us that the cultural distance, more than the
geographical distance is one of the most important factors that companies have to take
into consideration before getting in a foreign market.
3.3. INTERNATIONAL STRATEGY OF THE TEXTILE

INDUSTRY
Our third and last industry analysis concerns the Textile sector, some point that will be
examining in the following part may have resemblance with the Retail sector has one of
the big part of those Textile company is retailing. In this section, we will deal with two
global textile companies from Europe; the first is H&M, another Swedish company that
Spring, 2012
39
enjoys a worldwide presence and the second one comes from Spain, it is indeed the
Inditex group.
3.3.1. H&M, a universal model

In 1947, Sweden saw the first store launch by Erling Persson named Hennes. Meaning
Her in Swedish the first H&M store was exclusively targeting women. After a bit the
company opened a second store in Stockholm and then in Norway the first company
outside Sweden. Through these first moves of the company we could see that the textile
giant, who was not so giant at that moment, already had international expansion in 1964.
Quickly the founder bought out a small fishing equipment store called Mauritz Widforss
and hence the company became H&M standing for Hennes & Mauritz. It started selling
men and children clothing and by this occasion starts also its unstoppable expansion
throughout the world. The intention of the company is to offer fashion and quality
clothes for the best price21. Here, it reminds us the motto of IKEA the other big Swedish
retail store that we analyzed previously in this thesis. Today, the firm is the mother of
five independent brands and is present in more than forty-four markets all over the world
and employs around ninety four thousand people. The expansion of the company is not
over yet as it targets every year an opening rate of 10 to 15 percent.
Concerning the expansion strategy, H&M has decided to own every store it opens
(except few ones in the Middle East). Also in order to get the cost reduced, the company
does not buy any real estate for its retail store and always leases the spaces. This strategy
helping not only the cost savings but also it enables the company to move freely along
the market evolution and also it allows the company to invest in its collection what it did
not spend on immobilized capital. On a more strategic substance, we can say that H&M,
just like IKEA, expanded from a regional growth toward international markets. For
instance, it developed its business first in the neighbor countries like Norway and
Denmark and then Western Europe countries like Germany, UK, France and Belgium.
The representation below shows us the international development of H&M throughout
the years (Figure 3).
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
21
H&M corporate website: about.hm.com
Spring, 2012
40
Figure 3: Expansion of H&M in 60 years: from 1947 to 2007
On the production side, the company also decided not to invest its capital on factory and
preferred rather to have long-term association with partners in Asia and Europe where it
produces the most. This is a major comparison point with its direct competitor ZARA,
which has developed its production site inside its home market country. Still in the
production part, we can say that by having around seven hundred suppliers all around the
world is a plus point for the Swedish firm as it can order a large number of goods and
also keeps a close control of the costs by putting repetitively each supplier on the line in
order to obtain the best prices for the best quantity.
Having said that, we now come to the center of this analysis, which is the development
strategy that the Swedish company used in order to expand internationally. The first
reflection we can make concerning the layout of the H&M stores all over the world is
that they are the same. Therefore, H&M decided to standardize its boutiques in order to
give landmark to the customers. Whether you are in H&M New-York, H&M Paris
Champs-Elyses or an H&M in a small town commercial center, the layout will be the
same and the presentation of the products will not much more differ. H&M standardizes
its location also, as we saw it with IKEA, H&M stores all over the world have the exact
same criteria for the store location, and it has to be set down in an important business
area where there is traffic and often facing its direct competitions. This way of
standardization helps the company to settle a cult around the stores in the customers mind
so he or she will be constantly looking for an H&M in these types of area.
Concerning the offers, H&M standardizes its offer and makes its suppliers produce large
quantity of the products in order to reduce cost and therefore keep control of the process.
Spring, 2012
41
The products are designed in one place so it allows the standardization of the products
but also it enables the company to renew the collection as often as possible in order to
attract more customers each time and retain the current customer in order to drive them
back to the store as frequently as possible.
The marketing is also fully standardized and all the campaigns are the same for each and
every store in the world. The specificities of the H&M campaigns are given to all the
stores along the directives in order to simplify the process but also to make it easier for
the customers to find out about the H&M culture of the fashion products. Nonetheless,
there are two different levels of communication implemented by H&M. The first one,
which is global, will be the same for all the countries. It is most of the time the TV
campaign that comes along the opening of new stores or a specific event for the company.
For instance, in February 2012, the company launched its new men underwear designed
by the football player and fashion icon David Beckham. The second level of
communication corresponds to a more adapted method that H&M uses in all its stores, it
concerns the posters and other marketing processes that target only the regions where the
company has a store and therefore these types of campaigns are more local. Another
important factor that helps the company to standardize its campaigns is that H&M
associates with internationally renowned celebrities for its campaigns or its design; for
instance, Karl Lagerfeld or Stella McCartney or even Madonna. This strategy allows the
company to advertise all over the world with only one similar campaign by just
modifying slightly the price and the language.
To conclude we can say that the company is fully global and uses the standardization
strategy in order to reduce costs and risks and also to enable its customer to recognize the
brand all over the world and to identify it wherever the store is. In this section we saw
that unlike the other retailers, H&M maintains an important part of the standardization
and adapts only in few moments regionally or when it enters in countries where the
regulation does not allow it to present the same campaigns that it presents all over the
world. Here we mention the Middle East market where the company, due to the Islamic
law performed in these countries, the company has to slightly change its campaign and
not show nudity on its posters or TV advertisement.
Spring, 2012
42
3.3.2. Inditex, a global textile retailer

This paper will finish its empirical study with the new leader in the textile industry,
Inditex. This last part will explain the internationalization strategies chosen by the
Spanish company (and more precisely Zara) after we analyzed H&M, its direct
competitor acting in the worldwide market.
This segment will start talking about the internationalization strategy of Inditex which
will be explained regarding its products, pricing strategy, store management, and store
formats.
Inditex is a Spanish corporation and the worlds largest fashion group counting around
five thousand stores spread in five continents and seventy-eight countries. It gathers
famous brands such as Zara, Bershka, Pull & Bear, Massimo Dutti, Stradivarius, Zara
Home, etc.
Inditex applies a smart combination of standardization and adaptation of international

strategy. It is sometimes standardized in a global point of view and then adapted to the
host country. It is for example the case for the garments choices. The collections are
forecasted and studied in advance. The store managers or sales team are in charge of
giving feedback and impressions on the fashion trends and expectations of the customers.
They are very close to the customers and so are able to transmit to the centralized fashion
designers the concerns of the customers and all the information they have been able to
gather in order for them to be able to predict what is expected to appear in the following
months. Inditex is then able to provide full collections thanks to its extremely efficient
supply chain. In other words, Inditex is able to respond to the unpredictability of the
demand. So, the product assortments are defined locally thanks to the feedback, this way
the offer is always adapted to the trends.
Nevertheless, there is the fact that the worldwide clothing industry suffers a
homogenization of the consumption patterns; the internationalization can seem to be
easier as a standard fashion is possible. However, the truth is that a complete
standardization of its offer is not possible. Actually, Inditex applies a 60-40% proportion:
60% of its products are permanent or standardized collections, and 40% vary continually.
Indeed, a certain degree of adaptation is necessary because of the different needs in terms
Spring, 2012
43
of sizes, for example in Asia. But also because of the differences in cultures and of
course because of the climate, which is different according to the region, but especially
the differences of seasons changing regarding the hemispheres. But still, thanks to the
trends that are now global, the worldwide core target is approximately the same: young
and educated people that likes fashion and is receptive to it. The fashion shows, which
have an extremely important influence on the trends are now global and affect the fact
that style trends are now globalized and consequently, it makes possible the
standardization of a part of the cloths.
The standardization neither is total concerning the worldwide pricing strategy. In a sense
it is completely standardized but not if we look precisely at it. In fact it is standardized if
we keep on the global image, in other words if keep at the concept stage. Indeed, Inditex
applies the same pricing concept to all its stores and brands. First, there are no discounts
applied to any brand or store from the Inditex group compared to H&M, which applies
different politics regarding the host country (Figure 4).
Figure 4: Comparison between ZARA and its direct competitor: H&M
Spring, 2012
44
Also, the pricing strategy is worldwide based on the concept of market-oriented target
pricing. But it is actually more customized than homogeneous. Indeed, by definition, the
market-oriented target pricing strategy includes specificities of the host market: the
prices of Inditex garments are different regarding the country. Spain is the country where
the prices are the lowest because of one reason: the distribution channel. The longer the
channel is, the higher the price will be. Indeed, as most of the production and
manufacturing activities are located in the Iberian Peninsula and Morocco, it is easy to
set a range of prices according to the geographic position.
Another mix of adaptation/standardization concerns the store management. Corporate

management, of course, is centralized at the head office. From there, they ensure the
good application of the workers policies. But mainly, they ensure the respect of the store
management practices and a global image from the point of view of the customers.
Inditex usually franchises its stores allowing own-managed stores. These stores have
specificities but all apply the same politics. The fact is that originally, Inditex used to
send Spanish managers to repeat the management practices applied in Spain. However,
some countries such as Mexico and France, due to their strong local culture, made the
company forced to adapt its workforce. They started recruiting local employees in order
to better understand the local preferences. Of course, Inditex makes possible to apply the
centralized kow-how and values and controls the subsidiaries to maintain a unique
concept.
To finish, the core formats will be explained. Actually, it follows the same scheme than
the precedent points: the strategy is standardized because the same idea or concept is
applied globally but some points are adapted to fit the local culture and expectancies.
The business model is the same whatever the country. Most of the time, the shops are
fanchised and apply the same ideas: the products, the store locality, the interior design,
the logistic and the human resources are applied according to the values and head
strategy of Inditex. In other words, the MNCs principles of business beliefs are applied
to the store architecture, the display and inside design are prototyped at the head office
and then replicated in all global shops. But some particular points are customized for
different cultures and environments, the adaptation is authorized due to cultural
differences.
Spring, 2012
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To conclude, the Inditex group, mainly represented by Zara applies a very clever mix of
standardization and adaptation of internationalization strategy. In this case, Inditex
usually applies a standardization strategies that is then applied locally and adapted
regarding the core idea of the strategy. This way, the processes are fast and customized at
the same time which allows the Spanish company to be one of the most important and
renowned clothing brands worldwide.
Spring, 2012
46
4. CONCLUSION
Throughout this thesis, we were able to see that the selection of the international strategy
for a company is a vital point. Indeed, the right choice of the entry mode is directly
linked with the international development strategy. And it is important to mention that
the selection of the entry mode itself depends on the choice of the market destination and
the capacity of the company to expand internationally.
After this study, we realized that none of the adaptation or standardization processes can
be applied alone by the expanding MNEs. We always observed a subtil balance of the
two approaches. Indeed, the different case studies that we analysed revealed that even
though a firm choose to fully standardize its business, it has to conciliate it with some
adaptation according to the country. We could see during the case studies that the
adaptation part is most of the time driven by the cultural distance between the home
country of the MNE and its market destination. In the opposite way, a company that
selected an adaptation strategy has to implement a certain part of standardization in its
expanding strategy in order to reduce costs and risks. This is even more important if the
company is a small firm that starts internationalizing. Also, these case studies showed us
that according to the sector in which a company develops its business, the selection of the
strategy will vary between a major part of adaptation or on the contrary a major part of
standardization. For instance, we were able to understand that there is a large part of
adaptation in the catering industry whereas the standardization primes in the textile
industry.
Nevertheless, our world is currently witnessing a worldwide unprecedent crisis. Several
specialists foretell that this uncommun economical context will make countries to retract
from the globalization. Therefore, the question will be to know what strategies MNEs
can set up in order to preserve their overseas markets?
Spring, 2012
Dclaration sur lhonneur de non-plagiat

( joindre obligatoirement tout travail de recherche)
Je soussign(e),
Nom / Prnom (binme 1),

RAMOS MARCO
!
Nom / Prnom (binme 2),
RATHINAKUMAR JOSEPH
!
Inscrit en 5me anne de lESG Management School en spcialisation :
Achat et Suplly Chain
Gestion de patrimoine
Audit et Expertise Comptable
International Business
Corporate Finance
Management du Luxe
Digital Business
Management du Sport
Entrepreneuriat
Marketing et Stratgies Commerciales
Finance de Marchs
Production Audiovisuelle
Certifie(ont) quil sagit dun travail original et que toutes les sources utilises ont t indiques dans
leur totalit.
De plus, je/nous atteste(ons) avoir pris connaissance du rglement intrieur de lcole et certifie(ons)
que le dossier ou mmoire de recherche appliqu ci-joint ne fait lobjet daucun plagiat. Par ailleurs,
je(nous) mengage(ons) respecter les rgles du dit rglement intrieur et les sanctions disciplinaires
qui en dcoulent.
Fait Paris, le 16 mai 2012.

Signature (des deux membres du binme sil y a)
et mention Lu et approuv :

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ESG Management School, Paris

Master of International Business

2. INTERNATIONALIZATION STRATEGY SELECTION .............................................. 5!

2.1.2. Definition of adaptation .....................................................................6!

2.2. MODES OF ENTRY ........................................................................................7!

2.2.2. Strategic alliances with foreign partners...........................................9!

2.2.3. Mergers and acquisitions ..................................................................12!

2.3. RELATIONS BETWEEN THE DESTINATION CHOICE AND

2.3.2. The local cultural aspect ..................................................................16!

2.3.3. Economical situation of the host country .......................................18!

2.4. COMPANY SPECIFITIES ..............................................................................20!

Marco Ramos - Joseph Rathinakumar !

2.4.2. Companies industry and international strategy selection ............22!

3. CASE STUDIES IN THREE DIFFERENT INDUSTRIES ............................................. 25!

3.1.2. Starbucks Coffee a unique experience all over the world...........28!

3.2. RETAILING INDUSTRY ..................................................................................31!

3.2.2. Carrefour entering the Japanese market.......................................35!

3.3. INTERNATIONAL STRATEGY OF THE TEXTILE INDUSTRY..............................38!

3.3.2. Inditex, a global textile retailer .........................................................42!

4. CONCLUSION ................................................................................................. 46!

5.!REFERENCES .................................................................................................... 47!

Marco Ramos - Joseph Rathinakumar !

Marco Ramos - Joseph Rathinakumar !

Marco Ramos - Joseph Rathinakumar !

2. INTERNATIONALIZATION STRATEGY SELECTION

2.1.1. Definition of standardization

Marco Ramos - Joseph Rathinakumar !

2.1.2. Definition of adaptation

Marco Ramos - Joseph Rathinakumar !

2.2. MODES OF ENTRY

2.2.1. International development with foreign distributors

Marco Ramos - Joseph Rathinakumar !

Marco Ramos - Joseph Rathinakumar !

2.2.2. Strategic alliances with foreign partners

Marco Ramos - Joseph Rathinakumar !

Risks are therefore avoided by using this kind of internationalization strategy.

Marco Ramos - Joseph Rathinakumar !

Marco Ramos - Joseph Rathinakumar !

2.2.3. Mergers and acquisitions

Marco Ramos - Joseph Rathinakumar !

Marco Ramos - Joseph Rathinakumar !

2.3. RELATIONS BETWEEN THE DESTINATION CHOICE

2.3.1. Geographical location of the destination

Marco Ramos - Joseph Rathinakumar !

Marco Ramos - Joseph Rathinakumar !

2.3.2. The local cultural aspect

Marco Ramos - Joseph Rathinakumar !

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In short, the Cultural aspect in an internationalization process is a must for companies. It

2.3.3. Economical situation of the host country

Marco Ramos - Joseph Rathinakumar !

Marco Ramos - Joseph Rathinakumar !

2.4. COMPANY SPECIFITIES

Marco Ramos - Joseph Rathinakumar !

2.4.1. Internal assessment

Marco Ramos - Joseph Rathinakumar !

2.4.2. Companies industry and international strategy

Some industries involve standardization in the international process of companies for

Marco Ramos - Joseph Rathinakumar !

Marco Ramos - Joseph Rathinakumar !

Marco Ramos - Joseph Rathinakumar !

3. CASE STUDIES IN THREE DIFFERENT INDUSTRIES