International Exporter Model
2007/// Filed in: MNEs
The international exporter is used as a model to characterize companies who are strongly dependent on their domestic sales and that export opportunistically. As such, some scholars in the research community do not consider these companies to be MNEs, since their foreign sales are typically very low compared to their percentage of total sales and their international operations are often limited to sales outfits in foreign countries.
International exporter companies have typically a well-developed domestic infrastructure and additional capacity to sell internationally. Consequently, these companies may have aspirations to become MNEs by evolving into multidomestic, global, or transnational companies. This organizational structure is generally considered to be unsophisticated, unsustainable, and transitory in nature. In the short term, this organizational form may be viable in certain situations where the need for localization and local responsiveness is very low (i.e. the home product can be sold internationally with very minor adaptations), and the economies of global standardization are also low. The international exporter model is used to characterize many American companies in the post--war period. Currently, the model may still be useful to characterize domestic companies in the early stages of internationalization (Vernon.66} that sell standardized products internationally where economies of scale and scope do not play a significant role, but it is important to recognize that this organizational form is transitory in nature and consequently can only be used to describe a given company for a limited period of time (Segal-Horn.99). In summary, the international exporter model can be characterized as follows:
-Matrix Position: low global integration / low localization.
-Stage: Early stage of internationalization, transitory.
-Subsidiary Role: minimal, distribution.
-Center Role: corporate and competitive strategy and tactical decisions.
-Management Decisions: top--down (from corporate to subsidiaries).
-Technology & Knowledge Transfer: from corporate center to subsidiaries.
-Percentage of Foreign Sales: low.
-Example: US companies during post-war.
-Model Limitations: transitory organizational form, inability to exploit competitive interdependencies and global efficiencies, inability to exploit local differences.
International exporter companies have typically a well-developed domestic infrastructure and additional capacity to sell internationally. Consequently, these companies may have aspirations to become MNEs by evolving into multidomestic, global, or transnational companies. This organizational structure is generally considered to be unsophisticated, unsustainable, and transitory in nature. In the short term, this organizational form may be viable in certain situations where the need for localization and local responsiveness is very low (i.e. the home product can be sold internationally with very minor adaptations), and the economies of global standardization are also low. The international exporter model is used to characterize many American companies in the post--war period. Currently, the model may still be useful to characterize domestic companies in the early stages of internationalization (Vernon.66} that sell standardized products internationally where economies of scale and scope do not play a significant role, but it is important to recognize that this organizational form is transitory in nature and consequently can only be used to describe a given company for a limited period of time (Segal-Horn.99). In summary, the international exporter model can be characterized as follows:
-Matrix Position: low global integration / low localization.
-Stage: Early stage of internationalization, transitory.
-Subsidiary Role: minimal, distribution.
-Center Role: corporate and competitive strategy and tactical decisions.
-Management Decisions: top--down (from corporate to subsidiaries).
-Technology & Knowledge Transfer: from corporate center to subsidiaries.
-Percentage of Foreign Sales: low.
-Example: US companies during post-war.
-Model Limitations: transitory organizational form, inability to exploit competitive interdependencies and global efficiencies, inability to exploit local differences.