The Internationalization of Services
Internationalization describes designing a product in a way that it may be readily consumed across multiple countries. This process is used by companies looking to expand their global footprint beyond their own domestic market understanding consumers abroad may have different tastes or habits.
Internationalization describes the process of designing products to
meet the needs of users in many countries or designing them so they can be easily
modified, to achieve this goal.
Internationalization might mean designing a website so that when
it's translated from English to Spanish, the aesthetic layout still works
properly. This may be difficult to achieve because many words in Spanish have
more characters than their English counterparts. They may thus take up more
space on the page in Spanish than in English.
In the context of economics,
internationalization can refer to a company that takes steps to increase its
footprint or capture greater market share outside of its country of domicile by
branching out into international markets.
The global corporate trend toward internationalization has helped
push the world economy into a state of globalization,
in which economies throughout the world become highly interconnected due to
cross-border commerce and finance.
As such, they are greatly impacted by each other’s national
activities and economic well-being.
1. Internationalization
describes designing a product in a way that it may be readily consumed across
multiple countries.
2. This
process is used by companies looking to expand their global footprint beyond
their own domestic market understanding consumers abroad may have different
tastes or habits.
3. Internationalization
often requires modifying products to conform to the technical or cultural needs
of a given country, such as creating plugs suitable for different types of
electrical outlets.
Examples of
Internationalization
When a company
produces goods for a wide range of customers in different countries, the
products that are internationalized often must be localized to fit the needs of
a given country's consumers.
For example,
an internationalized software program must be localized so that it displays the
date convention as "November 14" in the United States, but as
"14 November" in England. Likewise, units in America are measured in
feet or miles, while in Europe and Canada they use the metric system. This
means that cars sold across these markets must be able to quickly interchange
between miles and kilometres.
Types of
International Services with Example:
1. Contract-based
services represent firms, for example, consultancy services where
consumers and producers from different countries come close for transactions
2. Vehicle-based
services in this type of firms’ communications between domestic and
international market is directed through, vehicles such as satellites and wires
or TV.
3. Asset-based
services, this type of firms requires platforms, such as banks, where services
cross borders with FDI.
4. Object-based
services manifest integrated services with physical objects (like DVD,
information/manuals for machinery services etc.).
Examples
As mentioned, McDonald's
operates over 30,000 restaurants in 100 countries. Its worldwide
expansion is an example of globalization. By design, the
corporation creates a menu adaptable to various local tastes and customs. This
policy is an example of internationalization.
Emerging markets
Rapid development in
emerging economies has also provided new opportunities for internationalization
in the service sector. While the percentage of the population employed in the
service sector tends to be lower than in developed economies, much of the
economic liberalization in emerging markets during the last few decades has
been achieved through the sale of state-owned service-sector assets, which has
resulted in increased inward FDI. The ongoing opening of these markets offers
opportunities for service firms to internationalize, using their experience and
knowledge to serve new groups of consumers. However, these opportunities are
also accompanied by a number of challenges for service providers.
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