International Business Marketing
Internationalisation is the process of planning and implementing products and services so that they can easily be adapted to specific local languages and cultures. The internationalisation process, which is when firms decide to engage in export and Foreign direct investment was carried out by Portugal. Since firms face uncertainty because they are normally unaware of local regulations and legal requirements and also be unaware about the size of foreign demand and the adequacy of their products to local taste. Portugal tried to test their internationalisation by moving into the closest countries first. They followed ...view middle of the document...
They suggested that firms following a more rhythmic internationalisation process tend to establish units in foreign markets at a more regular rate. This prevents the overload of managerial resources by creating room for better absorption of new knowledge of foreign markets. Although itâ€™s not clear which intervals they used, it is safe to say that they followed a particular rhythm since they ended up establishing themselves in places such as Russia Hungary and Poland over time.
Since Portugal clearly followed the interdependent dimensions of the internationalisation process, they were successful at creating various FDIs and go on to becoming one of the 15 countries that invest overseas.
There are various factors that Portugal could use to further enhance their internationalisation. These include fiscal, financial, information and technical assistance, risk minimizing measures, and others.
Fiscal incentives are defined as indirect means of supporting internationalization based on special tax exclusions, exemptions or deductions that might create a preferential tax treatment or deferral of tax liability. Full exemption from taxes and fees, reduced corporate income tax rate, loss carry forwards, tax havens, zero or reduced tariffs, enhanced deduction, accelerated depreciation, tax holidays, customs benefits and tax treaties are some examples of fiscal incentives that confer an advantage on the beneficiary firms.
Financial incentives involve a monetary transfer, either in cash or as a subsidy. This kind of support may take the â€œform of grants, loans or even equity participation for investment projectsâ€ (including contributions, subsidies, feasibility-study loans, management assistance and training loans, funds and grants that might leverage and finance firmsâ€™ internationalization. Financial incentives may be intended for the direct financing of firms or may support the enhancement of firmsâ€™ abilities and knowledge about foreign markets, through the financing of training programs, feasibility studies, market researches, among others.
Information and technical assistance measures concern the publication and dissemination of basic information regarding the (host) countriesâ€™ legal frameworks, macroeconomic circumstances, sectoral conditions and other factors that...