1. Outline
• Different types of businesses
• Importance of international entrepreneurship,
• Strategic issues in international entrepreneurship,
• Challenges & Opportunities in international
entrepreneurship
• Dragon Den Episodes

2. International Entrepreneurship
International Entrepreneurship is the process of an
entrepreneur conducting business activities across
national boundaries.

3. Another Definition of IE
The process of creatively discovering and exploiting
opportunities that lie outside a firm’s domestic market in
the pursuit of competitive advantage.

4. Traditional Motivations
 Sales to other Markets
 Avoid Changing Domestic Conditions
 Access to Lower Cost Structures

5. Importance of International Entrepreneurship
International business has become increasingly important
to firms of all sizes
Successful entrepreneur is someone who fully understand
International entrepreneurship and differs from purely
domestic business and is able to respond accordingly

6. International Vs Domestic Entrepreneurship
International entrepreneurial decisions are more complex due to uncontrollable
factors such as the following;
Economics
 A domestic business strategy is designed under a single economic system
 Creating a business strategy for multiple countries means dealing with
different levels of economic development and different distribution systems
Political-Legal Environment
 Multiple political and legal environments are opening some opportunities
while eliminating others
 Differences in Value added-tax
 Differences in Advertising campaign
 Differences in labeling, ingredients, packaging
 Laws governing business arrangements also vary greatly in the 150 different
legal systems and sets of national laws

7. International Vs Domestic Entrepreneurship
Cultural Environment
 Understanding the local culture is necessary when developing worldwide plans
 Language barrier
 Bribes and corruption culture
Technological Environment
 Technology varies significantly across countries
 New products in a country are created based on the conditions and
infrastructure of that country
 Example of cars based on roads and price of gasoline

8. Four Strategic Issues to Consider;
1. The allocation of responsibility between the U.S (host country) and
the foreign operation
1. Stage 1. Internationally Centralized business
2. Stage 2. Internationally Decentralized business when its expanding
3. Stage 3. Conflicts because of decentralization leads to pulling back certain
level of authority to US head quarter
2. The nature of the planning, reporting, and control system should be
used through out international operations
3. The appropriate organizational structure for conducting
international operations
4. The degree of standardization possible

9. Entrepreneurial Entry into International
Business
The modes of entering an international business in divided
into three categories;
1. Exporting
2. Non-equity arrangements
3. Direct foreign investment

10. Entrepreneurial Entry into
International Business
1. Exporting: selling goods made in one country to
another
Indirect exporting involves using a foreign purchaser( or
export management firm) in a local market or selling goods to
another country through a person in the entrepreneur’s home
market
Direct exporting uses independent distributors or selling
goods to another country by taking care of the transaction
 Opening their own overseas office for sales

11. Entrepreneurial Entry into International
Business
2. Nonequity arrangement: Doing international business through an
arrangement that does not involve any investment
 Licensing: Allowing someone else to use something of the Company’s
 Entrepreneur who is a manufacturer(Licensee) giving a foreign manufacturer (licensor)
the right to use a patent, trademark, technology, production process or product in
return for the payment of royalty
 Turn-Key Projects: Developing and operationalizing something in a
foreign country
 Management Contracts: A method for doing a specific international task
 Management techniques & skills
 Acquiring foreign expertise without giving ownership of resources to foreigner

12. Entrepreneurial Entry into International
Business
3. Direct Foreign Investment: the percentage of ownership is
related to the amount of money invested, the nature of the
industry, and the rules of the host government
4. Minority interests: Having less than 50% ownership position
5. Majority Interest: having more than 50% ownership position
6. Joint Venture: Two companies forming a third company

13. The joint venture should have
synergy!
 Synergy means that the whole
is greater than the sum of its
1+1= 3
parts or
 The two parties having things
in common

14. Entrepreneurial Entry into International
Business
4. Mergers: An entrepreneur can obtain 100% ownership
 Horizontal Merger: combination of at least two firms doing similar
business at the same market level (e.g.; 7 Eleven Stores)
 Vertical Merger: Combination of at least two firms at different market
level (stabilizes supply & production e.g. walls & polka)
 Product Extension Merger: Combination of two firms with
noncompeting products (related production/distribution activities e.g. Western
publishing (kids books) by Mattel (toys))
 Market extension Merger: Combination of at least two firms with
similar products in different geographical markets (e.g. Diamond chain: west
coast retailer by Dayton Hudson a Minneapolis retailer)
 Diversified Activity Merger: Combination of at least two totally
unrelated firms (e.g. Hillenbrand (hospital furniture manufacturer by American
tourists (a luggage manufacturer))

15. Organizations overcoming Barriers to
International Trade
 Trade barriers: Hindrances to doing
international business
 Some countries (Japan) allegedly present barriers
due to their complicated distribution system
 GATT (the General Agreement on Tariffs and
Trade) seeks to help overcome barriers
 FTA’s (free trade agreements) such as NAFTA
reduce barriers and encourage investment between
countries (in this case the U.S., Canada and
Mexico)

16. Entrepreneurial Partnering is one
good strategy of entering
international market!!