A Sequential Strategic Search Model for Identifying Internationalisation Opportunities for Indian Business

This paper is presented in two parts. In Part I, the term “internationalisation” is explained, Indian efforts and experiences during the decade of ‘70s are examined, and the basic issues are identified. Of the several dimensions of internationalisation, India had been primarily concentrating on just one – exports! Overseas joint ventures, project contracts, and overseas banking are three new dimensions which had come under its tentative exploration. Based on the past record, the following questions are raised: • What are the typical barriers faced by LDC’s in adding to their international dimension? • Which competitive advantages can be exploited by LDC’s and their firms independently? • Which are the competitive advantages, where exploitation of opportunities can be achieved only through collaboration with MNC’s or advanced countries? • What are the opportunities for third-world cooperation, particularly for inter LDC technology transfers and joint ventures? • What are the necessary conditions to facilitate direct export of manufactures from LDC’s? • Which are the areas where very little can be done by LDC’s? In Part II, an attempt is made to develop a sequential strategic search model for analysing the international business opportunities for LDCs in general, and India in particular. The model uses four sets of barriers to entry (technology, marketing, economies of large scale, and tariff walls) and four sets of comparative advantages (largeness of the market, cheaper cost of production, cheaper inputs, and appropriate technology) to generate 10 strategic situations faced by a typical LDC. Each of the 10 situations demand a different strategic thrust on the part of the policy makers in the government and the decision makers of the Indian firms. These are indicated using examples from the Indian situation.