Why Internationalize a Brand? What Are the Strategy Approaches for Brands in the International Arena? What Does This Mean for FinTech Startups?
The motives for internationalization can broadly be categorized into two types: economic and non-economic motives. Within the economic motives, there are defensive and offensive motives.
"Defensive motives arise when a company aims to stabilize its position in the domestic market or follows a competitor who has already entered a foreign market. Offensive motives, on the other hand, are justified by competitive advantages."
Reasons for the Internationalization of a Brand
Internationalization is an increasingly popular strategy for companies looking to expand their business activities beyond their domestic markets. However, the motives for such a decision can vary significantly. In this blog post, we will delve deeper into the various motives for internationalization and their impacts on companies.
- The motives for internationalization can broadly be categorized into two types: economic and non-economic motives.
- Economic motives are typically driven by the desire for growth and security, while non-economic motives aim at image, power, and influence.
- Within economic motives, there are defensive and offensive motives. Defensive motives arise when a company seeks to stabilize its position in the domestic market or follows a competitor who has already entered a foreign market. Offensive motives, on the other hand, are justified by competitive advantages.
- Resource-oriented, production-oriented, and sales-oriented motives also play a significant role in internationalization. Resource-oriented motives are driven by the need to secure raw materials at lower costs, while production-oriented motives aim to leverage a comparative advantage in other countries. Sales-oriented motives aim to achieve specific quantities or values through sales in foreign markets.
- From an organizational perspective, the motives for internationalization can also be classified as proactive or passively reactive. Proactive motives focus on internal goals and strategies of a company, while passively reactive motives are influenced by external events.
In practice, however, the motives for internationalization may deviate from the above, and companies may also have a combination of motives driving their decision to internationalize.
Overall, internationalization projects are driven by a variety of motives that determine the market entry process, timing, and subsequent actions in foreign markets. It is crucial for companies to carefully examine their motives and goals before pursuing an internationalization strategy. This way, they can ensure that their internationalization efforts are aligned with their overall business strategy and objectives.
Implications for Fintech Start-ups
When it comes to the impact on fintech startups looking to internationalize, there are several factors to consider. One of the most important is the nature of the product being offered. Financial products are often complex and can be difficult to explain to customers who are not familiar with the industry. This can make it challenging to generate interest and build a customer base in new markets.
Another challenge that fintech startups face is limited budget. Additionally, compliance with regulations in new markets can be a significant hurdle. Publisher guidelines will also require particular attention. Moreover, the requirements for KYC (Know Your Customer), KYB (Know Your Business), and AML (Anti-Money Laundering) processes may change when entering new markets. Therefore, fintech startups need to carefully consider these factors and develop strategies to address them effectively as they expand internationally.
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