Ics Case Study

2. Does management at ABD possess the appropriate knowledge, skills, and capabilities for internationalization? Justify your answer. What steps should management take to better prepare the firm, managers, and employees to internationalize?

Yes.

ABD has a skillful management team whose members have worked extensively in the European market, the Pacific RIM and Latin America. The international orientation and diversity of the team and their apparent success in the United States demonstrates robust knowledge, skills and capabilities appropriate for internationalization.

The international mindset, cosmopolitan values and strategic vision were also illustrated in the layout of their strategic intent and identified structure and research requirements necessary to prepare the firm for globalization. Furthermore, ABD had received unsolicited orders from abroad and had learned a great deal about handling international transactions, including foreign exchange, letters of credit, and logistics. While ABD’s plan to internationalize was in its early stages, management intended to expand beyond occasional export sales. The long-term motivation was to target key world markets.

One expected benefit of internationalization was the opportunity for ABD to learn from global competitors and markets. Management knew that critical self-assessment was vital to the long-term success of the firm. Management had much to learn about the costs ABD would incur in getting into specific foreign markets. There would be costs for legal help, freight forwarding, international transportation, and customs duties. There would also be costs for bank charges, rental costs for establishing foreign offices, and expenses for getting approvals for certain regulatory issues. ABD’s management was not completely clear on the amount of these costs, but they were willing to learn. Competitive intelligence was another concern. In fact, another incentive for internationalization was to learn more about...