Listened to the example of the production of bottles.

At this time, a student stood up and asked; Professor Zhao, should all enterprises with idle productivity be internationalized?"

Of course not, the first question is why companies are stuck with idle production capacity, even if local companies with only small production capacity in a global industry can succeed.

They just need a different strategy and market approach, not to become a bigger international player, and often be able to make money, not all industries are like the aircraft industry, only a few big international players can survive.

Speaking of cost advantages, in the early years, companies often internationalized to get better or cheaper factors of production, and this is still important in today's oil and gas companies, just if we look at the Western oil companies, they flocked to the whole world, the wars in Iraq, the wars in Kuwait, the wars in the Middle East to get contracts for oil and gas.

Cheap labor is another factor of production, and the inability of cheap labor to move is another reason for internationalization.

Because Western companies ship their fish and shrimp to Asia for cleaning and then shipping them back to the West for sale.

Over time, costs are decreasing, and when the company's output increases and it becomes more experienced in the operation of technology and systems, the company can reduce costs more effectively, because the purpose of internationalization is to increase the output of the enterprise, because it will move the cost down the learning curve.

By internationalizing, a company can easily promote its skills and resources.

If a company succeeds in replicating an off-the-shelf system abroad, it means that the investment invested in the system can be offset by setting up multiple points, think of McDonald's and KFC, both of which have successfully promoted their business systems.

"Professor, you gave the example of McDonald's and KFC, do you think that unlike other cost system advantages, the promotion of corporate know-how is more typical in the service industry than in the manufacturing industry?"

Actually, this is exactly what happened. ”

Hearing this, the brains of the students who do catering began to be active.

At this time, Professor Zhao said: "The above is about cost advantage, so let's ask Professor Kafuya to talk about the second motivation for enterprise internationalization, enterprise internationalization in order to obtain network benefits." ”

"Okay, students, we know that a business must work where it has customers, and unlike cost advantages, network benefits mainly affect the profitability of enterprises. ”

"Let's think about what some slogans say, customers are internationalizing, we have to follow them, there is no choice, in some industries, internationalization is indeed the essence of enterprise value, taking the American express company as an example, the key factor in its success is its international network, for a traveler, it is very important to know that an American Express credit card can be used all over the world, another example is an international hotel chain, business people like to find a well-known hotel in different destinations, they know what the well-known hotel represents, as a result of which the cost of customer search for hotels in different countries is reduced。 ”

"Okay, Professor Kafua, thank you for explaining to us the benefits of national networks, and then let's move on to the third benefit of internationalization. I know that this third type of internationalization is the most difficult to quantify. ”

"Yes, internationalization forces companies to compete with more companies in different countries and business environments, and companies may learn a lot from this and apply it to all business activities, and they may become stronger because they have learned to compete in different bad environments, and they have managed successfully, rather than avoiding diversity.

Therefore, it is often said that where the market goes, we will go there.

That will make you stronger, because you have learned to compete hard, and you have the courage to compete with other companies, rather than avoiding them, and you have a great man in China who said, "A hundred people compete for the current, and those who strive are the first", which is to describe this situation.

Customer feedback forces you to react quickly and coordinate with that, think of Silicon Valley or London, where industry clusters have developed and those clusters have grown into the center of the world, and it makes sense to establish a company there as a foothold.

In other words, you want to stay with your competitors.

"Professor Kafuya briefly shared with us a lot of cases, whether it is a Japanese company, KFC, McDonald's or many international famous hotel chains, from those cases, I see that in order to obtain cost and network advantages, the key is to achieve as much standardization as possible, and in order for learning to become a benefit, it is necessary to make full use of the diversity faced in internationalization. That's all for today, but we're going to focus on the Belgian Dynamics Group.

Let's go back to the case.

First of all, let's analyze the products of the Belgian Power Group, such as its production or power generation, as well as transmission and distribution, which refers to the production of electricity. From the power plant to the individual transformers or substations or we have a proper term, it is called high-voltage transmission.

Distribution refers to the transmission of electricity to the end consumer through a local transformer.

"Mr. Steve, as the former CEO of the Belgian Group, can you share with us the three points of view of the Belgian Power Group in accordance with the three points of view that Professor Kafoa said?"

"Yes, I know the past power management reports of the Belgian Power Group. I first analyze from the production point of view, the Belgian power group has its international cost advantage, Belgium has reached the peak of domestic demand, for them, it is not difficult to make plans, arrange production capacity, and achieve economies of scale, the fluctuation of electricity demand, mainly due to the fluctuations of the overall economic cycle and changes in the weather, in that case, the power producer is happy to have the opportunity to sell the excess product, especially because the characteristics of electricity are not stored for later use.

In order to transmit and distribute electricity, you only need to use some local facilities and access to the power supply system, without infrastructure, so in transmission and distribution, cost advantages can also be obtained, through the network more distribution, the cost of one kilowatt is quite low.

There is a historical point in time that before Margaret Thatcher, you had a couple of big businesses, there were many different power supply points across the whole of Europe, and we could buy electricity and gas in the heartland, but that was not possible because each country organized its electricity and gas sector in their own way.

With Margaret Thatcher starting the process of liberalization in Britain, and later the whole of Europe, the former impossible became possible.

It was also at this time that Belgian Dynamics really started to move internationally, when my predecessor, Bodson, was opportunistic, he didn't have a detailed internationalization plan, but he was jumping between opportunities left and right.

It is a typical gesture of local champions who strive to make their way to the international arena, exposing themselves to open markets and competition in the electricity markets of countries that have liberalized such as Chile and Argentina, in the process of developing Belgium from a traditional monopoly to one of the most competitive power companies in the world.

I think learning was the main benefit that Belgian Dynamics gained in internationalization at that time.

Because they didn't initially set up evaluation criteria for their internationalization projects. They also had to increase their profitability and produce more electricity than they did when they were operating domestically, but they did not immediately see much effect at the time, but they gained expertise in managing a diversified market structure, and as a result, they transformed themselves into a stronger, more competitive group.

"So, Professor Kafua, do you think that from the successful case of the Belgian Power Group, can our company be internationalized?"

"No, I think wishful thinking for international development, this is very dangerous, we have to think about why our domestic market is narrow, is it because of the company's own market or its own market restrictions, or is it a pretext for the inability to enhance competitiveness in the country, if you can't improve your position in a place that you are already familiar with, then why do you think you can do it in a new international market. ”

"So, can I think so, Professor Kafuya, what you mean is that to be international, you have to have a prerequisite, your company has to have a strong competitive advantage. ”

"Yes. ”