Internationalization Processes Of Romanian Wine Producer Motivations And Entry Mode Selections

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SUMMARY

International management represents an extension of general management functions in international companies with global businesses.

By definition, decision is choosing a variant of a multitude of possible variations.

Decisions (involving choice, rationale and fulfilment) are more complicated in international management, due to several factors:

rapid and continuous changing business environment

bodies are more complicated in international management

distance reduces reaction speed

The reason I chose to do this work is the growing importance that internationalization has nowadays for big companies, the need to attract a greater number of customers (the main aim is obviously profit maximization) engaging increasingly international business, as well as expanding economic operations in several markets in particular external.

To demonstrate superiority, the superiority of those offered products or services, a company can not be limited to the domestic market.

Underlying internationalization of market forces stand expansionism, the tendency to invade an un-marketed environment and to include it in an economic system based on market mechanism. In this respect, internationalization is objective.

Under the strategic approach, the internationalization of companies is the result of the adoption of a series of strategies that consider both the resources and capacities of the company as well as the opportunities and threats of the environment. The internationalization of companies consists of the process by which a company participates in the reality of globalization, that is, the way in which the company projects its activities, totally or partially, to an international environment and generates flows of various types (commercial , Financial and knowledge) between different countries.

Given the above, the process of business internationalization must answer the following questions: Why is the company internationalized? What is the process to carry it out? How is it internationalized? And where can you locate your activities abroad? Based on these questions, the present bibliographic research has as main objective to show the process that companies must follow in order to internationalize.

There is no one way for a company to start having international activity. What we do find is a possible path that sets us different options depending on the control that the company has in its external activity, the risk that it assumes and the resources that it uses in its international expansion.

Before designing the plan to internationalize the company, the objectives of such internationalization must be written and very clear. The first important factor in any internationalization process is to have a product of sufficient quality to be offered in international markets. The decision on the combination "product to be offered and market to serve" is the first to be taken in an internationalization process.

Other factors must therefore be taken into account: the similarity of international markets to the local market, the existence of similar distribution channels, physical closeness, the potential size of the market, the degree of rivalry between international markets, the risk of change, political-economic stability and the company's familiarity with these markets.

For many companies, the similarity in marketing processes and the size of the market are critical factors in deciding where to enter. Once the decision on the product-market combination is made, it is essential to entrust the responsibility of the internationalization process to a person who knows in depth the peculiarities of the clients of the country of destination, as well as the patterns in advertising and distribution. With the collaboration and guidance of an expert on a particular local market, the company has to decide the most appropriate mode of entry. So that this final decision has been made, a business plan must be drawn up by the company in that country, in which the resources necessary to achieve the objectives are estimated. Then, it is the decision to centralize or decentralize the different activities of the company to achieve the objectives of internationalization. Once the centralization or decentralization of certain activities or functions has been decided, it is necessary to establish the types of mechanisms for coordination and control. It is necessary to define how this unit will be coordinated with the parent company and, at the same time, what control mechanisms have to be established to evaluate its results. With regard to control mechanisms, care must be taken to allow them to evaluate the results without stifling the initiative of the responsible in each country.

The research methodology used in the present paper implies methods and techniques of qualitative and quantitative research, while data collection was conducted through literature review, field research and discussions with Recaș winery. Steps performed for this research are based on questionnaires, literature studies, achieving proper questions for the interview, checking the degree of understanding questions among the potential respondent, distribution, information processing, information analysis and interpretation, drawing conclusions. The questions of the interview were assigned representative for Recas winery in order to obtain relevant conclusions.

The project presents internationalization of Recas Winery. With a 30% share of the leading Romanian wine market, the company produces and distributes various types of wines is the. Highly prestigious vineyard of Romania is the beneficiary of a generous climate offers the chance of achieving natural sweet wines, outstanding, professional certificates and countless medals at international competitions. Once it was won and strengthened its leading position on the domestic market and the company has the potential to expand the foreign market.

I conducted a study on the Belgian market to see if this country would be advantageous for export. In this regard, I have witnessed a number of important factors that could influence the success of product marketing and exports: the country's economic perception of foreign products, physical distance, infrastructure, trade policy of the state, competition in the market and some elements related to culture and religion.

Country analysis and consequently, the commodity market, led me to choose Belgium as the country's main export. The fact that it has no vineyards of vines and is still consuming great wine led me to do a more detailed study on demographic, political, economic and cultural environment of the country.

Belgium meets our requirements of being a economically developed country, with an infrastructure that allows facilitating the transport of goods, but also with a local competition. The form of transaction that I have chosen is the export, sales of our products being made through retail companies. This form of Belgium market penetration was elected as it stays inexperienced. Given that Belgium is one of the largest consumers of imported wine, Recas company's products could be successful.

Historical reality shows that with advances in his company tends to encroach on local, national and regional businesses, to expand global economic activity in space, whose training is possible even in an outward movement of the company. Underlying this process of market forces stands imminent expansionism, the tendency to invade the „un-marketed” environment and include it in an economic system based on market’s mechanism.

CHAPTER I.

INTRODUCTION

In an increasingly difficult and competitive context, it is vital to consider marketing and specific sales techniques related to market the products. In the wine sector, although quality is indispensable, it is not enough. So, it is essential to use all the tools at our disposal in order to adapt the product to the expectations of wine consumers, using a consistent marketing mix. One can not forget that the work is about one of the star products of Romanian agriculture, with a huge international projection.

Nowadays, wine production represents a whole ritual and as every ritual follows a pattern, it is an aesthetic. This aesthetic is related to the presentation of wine to the senses, is what motivated me to carry out this work. So one will discuss aspects related to it. As mentioned before, companies need to motivate their clients and for this, they must know their tastes and preferences, their influences and everything that creates value for them. Once this information is gathered, it is when companies can enter into the marketing experience, carrying out the marketing mix. Since the present paper concerns a sector in constant renewal, it is fundamental to dedicate a space to the development of new ways of getting internationalizing wine products.

Marketing is one of the basic aspects of a company. Through it, the company tries to discover and analyze the needs of a population in order to adapt the product to the expectations of considered consumers’ segments. If one adapts this same definition to the subject that concerns this work, it is the set of means and tools that allows a company to sell wine in a profitable and lasting way to a client so that he can prescribe it to others. One of the main objectives of this work is to know the enormous importance that marketing has on the wine sector. To do this, there is a need of locating the position of the main wine producers in our country, briefly investigating both our domestic market and the demanding and emerging foreign markets. The wine sector is the appropriate sector to carry out a work of these characteristics, since, although a great marketing strategy does not turn a mediocre wine into a great one, which attracts a consumer who is not very expert when buying the product as a physical aspect of both the bottle and the label.

Other objectives intended to be achieved through this work are:

to know aspects about wine’s production and commercialization.

to investigate possible markets within the wine sector, selecting market segments.

to identify the expectations of consumers in order to propose a homogeneous and structured offer.

to propose programs of commercial actions adapted to the different sectors detected after the analysis of markets.

to define strategies regarding the characteristics of product, price, promotion and distribution.

to use communication tools adapted to the commercial policy of a wine company.

to identify the new ways of getting the product

In this respect, the main research question of the present paper is related to the Internationalization Processes of Romanian Wine Producer: Motivations and Entry Mode Selections, applied to Recas Winery study Case . As secondary research questions, this scientific work will analyze the main motivation of internationalization processes for the company , the manner the company goes on international markets considering difference between cultures and geographical distance, but also it will emphasize Belgium as a location, explaining the reasons of choosing this country.

This study is structured into six chapters, each of them presenting important aspects of general or particular nature related to the internationalization processes of wine producers. In this respect, the introduction, as a first chapter contains a short description of the study, but it also focuses on the research question, presenting the main and the secondary ones. The transition to the second chapter is marked by the theoretical framework of the thesis, respectively: Internationalization theories, internationalization process studies, operation modes or entry modes, network theories, RBV and so on. In chapter III, one will observe a presentation of the study’s methodology, especially data collection, data precessing, as well as the data source represented by an interview taken with a representative of Recas Winery.
The fourth chapter is represented by an empirical analysis concerning aspects about the country where the wine company will develop the internationalization process, the reasons of choosing Belgium as a location in this respect, the internationalization method that will be used and conclusions regarding these actions. Chapter five will highlight discussions and conclusions that will expose the need to apply the tools that marketing provides when marketing a wine regardless of its category, while at the last section’s level, one will observe the implications regarding the present study.

Humanity, in its modern history, has witnessed the birth of various models of socio-economic integration; the last of them occurred at the dawn of the new millennium and it is driven by the engine of globalization, which, despite its innumerable criticisms of the unquestionable global impacts, shows strength by the growing of nations’ commercial exchange and evident transformation of the lifestyle and consumption of the world population.

The different processes of economic, social and cultural integration that have been developing in countless countries since the 1980s have become the most important vehicle to travel along the path of global union. The phenomenon of markets’ globalization and therefore the companies’ internationalization turn out to be an event from which one can not escape neither as organizations nor as consumers, leaving only the alternative route of reflection, that in terms of country invites individuals to think about the tempting possibility of having a greater number of companies with products abroad, becoming increasingly productive and competitive organizations that contribute to the economic and social benefit of the nation. Although internationalizing a company is not an easy process, it can be too risky and complex; this type of effort is often highly rewarded especially when organizations first focus on finding information and prior knowledge of buyers’ needs and expectations according to the new target markets.

Benjamin Franklin said: "Investing in knowledge always produces the best interests", which interpreted from the field of business could be translated into the fact that there are the research and market intelligence, the best investments that can be made by a company, since information is the raw material of ideas and business, and the only tool that helps to clearly define which goals are achievable when designing internationalization processes.

Nowadays, companies that have already started and developed internationalization processes convey valuable lessons in terms of leadership, quality and innovation, thus demonstrating that success does not depend on the size of the company or on the amount of available financial resources, but on a selection of suitable strategies at the right time.

CHAPTER II. THEORETICAL FRAMEWORK

INTERNATIONALIZATION FROM THE ECONOMIC PERSPECTIVE

Historically, internationalization has its origins in the classical theory of international trade which indicates that countries tend to specialize in producing goods and services in which they have lower production costs, so that international trade occurs as a consequence of specialization and Of the division of labor (internationally); Which allows directing resources to the most productive uses in each country involved in commercial activities. In this way, a country would produce and export those products in which it would be more efficient, and import the products in which it had no production efficiency.

Adam Smith brought to the development of this classical conception a first explanation based on the theory of absolute advantage, emphasizing this; On the importance of recognizing the scarcity of resources, and consequently suggesting the need to establish a distribution system. In this way, countries would tend to produce and export products that require abundant resources locally, and import those that demand a scarce resource. This explains why countries with cheap labor export, labor-intensive goods to more capital-intensive countries and vice versa.

David Ricardo brought to this classical conception an explanation in which he incorporated the theory of international trade based on the principle of comparative advantage, showing that the absolute advantages in costs are not a necessary condition for achieving profits in trade, since Trade would produce benefits for both parties in an exchange, as long as their relative costs differed for two or more items. However, Ricardo did not analyze the forces that determine the terms of trade or trade between two goods in the international market. This task was carried out by John Stuart Mill, who observed that exports vary with the terms of trade (price of exports relative to the price of their imports), and also found that the disposition of each nation to export depended on the Quantity of imports that it would obtain as a counterpart. He also pointed out that the international equilibrium exchange rate is that which equals "reciprocal demand" for each good in each country.

These conceptual contributions allow us to affirm that Smith, Ricardo and Mill laid the foundations of the classical theory of international trade . However, the basis of the homogeneous production factors of this theory can not explain the difference in the different export performance of countries with similar resources. In this sense, modern industry is characterized by the existence of increasing returns to scale. Thus, producing large quantities to achieve scale economies would lead companies to have large volumes of production that were larger than the needs of the domestic market. So, companies would seek outlets abroad for these surplus production. In this way, international trade between countries would be explained, where large firms (with economies of scale) would have advantages over small firms, and would break the perfectly competitive assumption of the classical theory of international trade.

A more contemporary view of the economic perspective groups theories describing the internationalization process from a purely cost-based perspective and the economic advantages of internationalization (Hymer, 19765 ; Vernon, 1966 ; Dunning, 1981 , 1988 , 1988 , 1992). In general, these models attempt to explain the reasons why a company can have international expansion and the conditions under which the optimal localization decisions of production operations could be determined. In general, these models attempt to explain the reasons why a company can have international expansion and the conditions under which the optimal localization decisions of production operations could be determined.

Such approaches that emerged in the 1970s and 1980s are characterized by trying to explain the existence of the multinational company, being their common feature, to consider that decision making and business behavior are rational processes. (Buckley y Casson, 1976; Rialp y Rialp, 2001). Within these models the following are considered:

Internationalization Theory

This theory studies the internal processes of information transfer in companies, turning this approach into the dominant one for the study of the multinational company from the work published by Buckley and Casson (1976). At the end of the 1970s, internationalization was established as a new line of research, constituting the most important contribution of micro economists to the knowledge of the multinational enterprise.

This theory seeks to explain why transactions of intermediate products (tangible or intangible such as know-how) between countries are organized by hierarchies rather than by market forces (whose conceptual bases are derived from The theory of transaction costs). Its central approach is that multinational organizations are an alternative mechanism for the market to manage value activities across national borders and that, in order for firms to engage in direct investment abroad, two conditions must be met:

1. Existence of advantages when locating activities abroad.

2. Organizing these activities within the company is more efficient than selling them or transferring them to companies in the foreign country in question. The first condition is related to the comparison of the unit costs associated with producing in the domestic market and to export the product to the foreign country in relation to the costs of producing in that foreign country, in which factors such as the cost of factors Transport costs and tariffs (Teece,1986), Government intervention (Teece, 1986; Buckley y Casson, 1979) and factors such as the possibility of obtaining economies of scale in certain activities, their complexity and the degree of integration of them, as well as the type of market structure.

The second condition is based on the concept of transaction costs, which, when associated with the market, are classified by Buckley and Casson (1976, 1979) as:

to.

a)Delays caused by having different activities linked by the market.

b). Conflicts arisen by the bilateral concentration of power.

c) Difficult to put a price on a transfer of technology.

d). Specific aspects related to international markets such as tariffs and restrictions on the movement of capital.

Thus, the central idea of internationalization theory could be presented as: The benefits of internationalization arise from the circumvention of the costs associated with the imperfections of external markets, and will imply the creation of a multinational enterprise insofar as beyond national boundaries.

Dunning's Eclectic Paradigm

Dunning proposed a theory that tries to reconcile the theoretical explanations of economical cut referring to the existence of the multinational company, when assembling within a system the contributions of the theorists of the industrial organization, the theory of the transaction costs and the theories of localization and international trade.

In this manner, the theory explains how the size, form and pattern of international production of a company are based on the overlapping of the specific advantages of the company, the propensity to internationalize foreign markets and the attractiveness of those markets to produce there, So that the decision to enter international markets is made in a rational manner, based on the analysis of the costs and advantages of producing abroad.

According to this author, there are four conditions that must be given for a company to choose to exploit its competitive advantages abroad through direct investment; Becoming a multinational. First, the company must have its own advantages when it comes to participating in external markets, compared to local companies. These advantages may arise because the company has property rights or intangible assets such as structural, organizational capacity, teamwork, or know-how, among others; Or by advantages derived, among others; Or by the advantages derived from the common government of a network of assets, which can be divided into:

Advantages of already established companies versus new ones (such as their size, diversification, experience, advantages economies of scope and ease of access to resources).

Specific advantages associated with the characteristics of the idiosyncrasy of being multinational (such as operational flexibility, changes in production, global supply of inputs, ability to exploit, ability to exploit geographical differences in factor endowments or Governments and ability to reduce or diversify risks)

Second, the company that possesses such advantages may be more likely to exploit them by itself than to sell or rent them to other companies in other countries. In other words, it should be more profitable to internationalize these advantages through the expansion of its value chain or through the execution of new activities, the factors that determine this internationalization are those related to the reduction of transaction costs such as the need for Seller to protect the quality of products, avoid the costs of search, negotiation and breach of contracts, compensate for the absence of markets, avoid and exploit government interventions, among others.

Third, the company must find it profitable to locate some of its production plants abroad, depending on the attractiveness of those locations in terms of its specific endowment of non-transferable factors along its borders, identifying between the spatial distribution Of resource endowments, price, quality, factor productivity, transport costs, international communications, artificial barriers to trade, infrastructures of destination countries, and ideological and cultural differences, among others.

Fourth, for a company to make a direct investment abroad, it must be in accordance with the long-term strategy established for the organization.

Model of competitive advantage of nations (systemic competitiveness)

Porter indicates that the ability to compete in international markets depends not only on the costs of productive factors but also on their cost-effectiveness. For this, the productive factors can be divided into basic and advanced. The basics refer to those naturally found and to a greater or lesser degree in all countries, such as natural resources, capital and unskilled labor. The advanced ones are those that are not naturally found, such as the specialized labor force, the educational system, communication systems and scientific infrastructure can be classified as general and specialized.

General ones are useful for all companies in all sectors (e.g education system), while specialized ones are useful only for certain sectors (e.g a research center), arguing that only advanced and specialized factors contribute to the creation of a country's competitive advantage, since they are the most difficult to copy and imitate by other nations.

Porter also indicates in its theory, that other elements must be considered for the development of the competitiveness being these:

The conditions of domestic demand. The greater the demand of the domestic customers, the greater the effort of the companies to satisfy them through quality products, and the anticipation of the needs of the customers, which directly affects the international competitiveness of companies.

Related industries. The existence of multinational companies provides international competitiveness to the country. For example, a supplier may have relevant information from several countries, and close relationships between supplier and customer may lead the customer to acquire business information about other countries. In this way, these close relationships can lead companies to improve their quality and benefit the country's international competitiveness.

The degree of rivalry of the sector. Increased rivalry or a high degree of competition from companies in the same industry drives innovation. The presence of strong competitors in the domestic market makes weaker companies seek new markets. So that a strong rivalry can diminish the attractiveness of the sector, but at the same time, to stimulate the international competitiveness of the country.

The role of government in the international competitiveness of the company. Government intervention to increase competitiveness is another determining factor for a country's export success, since each government selects which companies and which sectors will receive support. However, it warns against the risk of creating an unsustainable artificial situation with the aim of protecting certain sectors or companies that are not competitive internationally. In this context, governments can help or inhibit the country's international competitiveness through the creation of advanced and specialized productive factors and their intervention in the degree of concentration of the sector. The advanced and specialized productive factors depend on the resources that a country can invest in promoting research. Likewise, the control exercised by the administration in the degree of concentration of a sector is very important, since the competition tends to increase the degree of innovation in the same.

This model is known as "Competitiveness Diamond", which presents a series of variables that had not previously been considered and explain how companies can develop competitive advantages in competitive markets and not only in imperfect markets, which was the approach Of previous theories. Thus, this model provides a system of analysis of combination of factors that serve to make rational decisions about why, how and where to internationalize the operations of a company.

INTERNATIONALIZATION FROM THE PROCESS PERSPECTIVE

Under this category are grouped theories that consider the process of internationalization as an incremental learning mechanism based on the accumulation of knowledge (experience-experimentation) and the increase of resources committed in foreign markets . One describes how and why strictly national companies become international companies. Also indicating when they are prepared to take the different steps that will lead to a higher degree of internationalization.

The Uppsala model – Nordic School

This model indicates that the company gradually increases the resources committed in a country as it gains experience of the activities carried out in that market; and that activity abroad will take place over a series of successive stages that would represent an increasing degree of involvement in its international operations (Rialp, 1999). Depending on the author, the model describes a greater or lesser number of stages of development, but in general can be summarized in four, which constitute the so-called establishment chain:

1. Sporadic or non-regular export activities;

2. exports through independent representatives;

3. establishment of a commercial branch in the foreign country;

4. establishment of productive units in the foreign country.

At each stage there is a greater degree of international involvement (resources commitment) of the company in that market; It also gradually increases the experience and information that the company has on the foreign market, implying also the adoption of a different mode of entry.

Johanson and Vahlne (1990) indicate that the knowledge of the market that is developed gradually through the experience in the same, and the commitment in that market understood by the allocation of resources, are elements (indicators) characteristic of a greater participation in foreign markets, assuming that By increasing their experience in these markets will appear new market opportunities. Another concept introduced by the authors of the model is that of "psychological distance" according to which, the external entrance would tend to be produced by the country market psychologically closer to the country of origin; Defining psychological distance as the set of factors that prevent or hinder the flow of information between the company and the market, such as linguistic, cultural, political, educational or industrial development.

With regard to this general approach, the authors contemplate three situations of exception to this phenomenon. The first, when the company has a large amount of resources where the consequences of the new commitments will be smaller, so that large companies or those with excess resources are expected to make more significant advances in their internationalization processes. Second, when market conditions are stable and homogeneous, since knowledge of markets is easier to acquire and there are simpler means of acquiring knowledge than experience. Third, when the company has acquired significant experience in other markets with similar characteristics, since the experience gained in those markets will serve the same to replicate this experience in a new market with similar characteristics.

The innovation model

Parallel to the Scandinavian approach, the authors of this model that emerges in the United States, expose the thesis that internationalization is a process of business innovation, basic for the internationalization of small and medium enterprises. (Bilkey and Tesar, 1977; Cavusgil, 1980; Reid, 1981; Czinkota, 1982).

The model indicates that the relationship between internationalization and innovation is to assimilate a company's decision to increase the international commitment to innovations in a broad sense; Being the decisions of internationalization and innovation determined creative and deliberate, developed within the limits imposed by the market and by the internal capacities of the company, that are taken under conditions of uncertainty reason why the managers in charge of taking those decisions are them Assigns the central role in promoting the process.

This model highlights the cumulative nature of decisions taken both in the process of internationalization and innovation, provided that these are conditioned by the decisions that have been made in the past and, in turn, will condition those that Have to be taken in the future.

The model generally proposes the following stages of development of the international activity of a company:

1. Domestic market

2. Precarrier

3. Experimental Export

4. Active Exporter

5. Committed Exporter

Model of systemic planning

These models are based on the assumption of perfect rationality on the part of the entrepreneurs. There are proposals such as Miller (1993) cited by Li, Li and Dalgic (2004) which suggests that companies follow ten steps in their internationalization process and selection of various plans of operation abroad. Root (1994), cited in Li, Li and Dalgic (2004), sees the process as a five-step sequence:

1. Measuring market opportunities

2. Goal setting

3. Selecting the input mode

4. Formulation of the marketing plan

5. Execution

This model seems to be supported by several case studies and some anecdotal evidence.

THEORIES FOR THE SMEs’ INTERNATIONALIZATION

Network Theory

Under this denomination are grouped theories that explain the process of internationalization as a logical development of organizational and social networks of companies.

As a result of the expanded network theory, entry into foreign markets is understood as a function of the continuous inter-organizational interactions between local firms and their international networks, meaning that the opportunities of foreign markets reach local firms Through members of its international network is Johanson and Mattson (1998).

In other words, the social relations that the decision-maker maintains with other individuals in the network will influence it in the search for information on particular markets in which it can act.

Other work has highlighted foreign travel and migratory movements as factors that stimulate the perception of foreign market opportunities, indicating, for example, that a businessman who has emigrated or has work experience abroad will use his contacts in the markets Exterior to make it easier for the company to export.

Generally, it is expected that those who start exchanges tend to approach those partners who show a greater commitment in the promotion of their products, in the case that the seller initiates the relationship, or those suppliers with better reputation, if It is the buyer who initiates it. In this sense, it is understood that in the first place it will be preferred to use an intermediary trader before an agent in commission, since the former assume a risk that ensures a greater commitment when promoting the product in the foreign country.

Being able to take advantage of business opportunities depends on the size of the network and the diversity of the network . It is clear that large diversified companies have more opportunities to exploit the benefits thanks to the links established through their networks. For many industrial and high-tech companies, the road to internationalization reflects their position in the network in relation to several customers and suppliers by creating bridges to other markets .

According to the network approach, entry into foreign markets arises from the interaction between the company and the external network, and the propensity to exploit business opportunities will be limited by the benefits (quality) of the information provided by each of the Members of the network. Individual social networks need time to develop, so that the benefits of information increase with personal experience.

Based on the network approach, an emerging area of internationalization of small and medium-sized enterprises focuses on non-hierarchical systems where firms invest to strengthen and control their position in international networks. This contemporary approach is based on theories of social exchange and resource dependence, and focuses on the behavior of the company in the context of an inter-organizational network and interpersonal relationships.

The network approach advocated by Johanson and Mattson (1988) with regard to the internationalization of enterprises, includes a dynamic element when focusing on network relationships. This model uses social network theory to explain how companies are internationalized through networks. More specifically, these authors consider business networks to those that maintain the companies with their clients, distributors, competitors and government. They argue that as companies become internationalized, the number of actors with which they have to interact through the network increases and their relationships become more intimate. When they are internationalized, companies create and develop business relationships with their counterparts in foreign countries. This phenomenon evolves in different ways:

Relationships are formed with partners in countries that are new to internationalized companies (international extension).

Increased commitment in established networks (penetration).

Integrate the positions that are in the networks between different countries. In any form, internationalization involves exploiting the advantage of networks.

As one can interpret from the above, the activities in the network allow the company to maintain relations that will help him to have access to resources and markets. A basic assumption of this model is that firms need resources controlled by other companies, which can be obtained because of their position within the network. Johanson and Mattson (1988) use the term net to refer to a specific part of the total network. For example, the national net national net refers to the network of a particular country, and the production net production net net is related to the relations between) To relations between companies that revolve around a specific product area. In addition, depending on the degree of internationalization of the market and the company itself, these authors identify four categories of international companies: the start-up company, the lagging company, the solitary company and the international company.

The theory of global born

Global companies are understood to be international companies of recent creation, where the factors that determine their activity obey a global approach since its inception, or that are internationalized in the first two years of life. This approach is a new emerging perspective of the internationalization process, due to the abundant bibliography that has tried to explain this phenomenon and that is very useful to understand the internationalization of the company in the 21st century.

Several studies on this phenomenon, which are beginning to be considered by different researchers as a further theory on internationalization, have focused on specific sectors such as high technology and craft activities. Based on the revised literature, Madsen and Servais (1997) relate the emergence of companies born global born global with three important factors:

1. The new market conditions.

2. Technological developments in areas of production, transportation and communication.

3. The most developed capacities of people, including in this last point, the entrepreneur who founded the company born global.

The consequences of the previous numbers are the reduction of communication and transportation costs, as well as easy access to new information technologies and greater integration of the different regional economies, causing a series of circumstances that facilitate the That a company can carry out international activities from the moment of its creation.

With regard to "change in market conditions", the increase in specialization and hence in market niches is noteworthy. As a consequence, there are more companies producing specific parts or components of a product, which would have to be sold in international markets simply because domestic markets do not have sufficient demand to absorb the minimum effective size. Entrepreneurs in high technology markets must sell their innovative products worldwide. In addition, there are also industries that develop global supply activities and develop networks outside their borders. As a result, innovative products are rapidly distributed across markets around the world, because consumer tastes have been homogenized. This means that the new market conditions force companies to establish themselves in different markets quickly.

The second factor that promotes the emergence of born global born is the so-called "changes in processes" called "changes in technological processes". These changes have meant that small-scale operations can be attractive from an economic perspective.

Therefore, specialization, customer adaptation and niche production are viable alternatives in today's markets. The transportation of people and goods is cheaper, reliable and frequent, so that the cost barriers of international business have disappeared. This is also a result of the development of communications; Markets have become more accessible and "day by day" business can be developed in different countries) can be developed in different countries from the desktop. In the same vein, information on international markets can be collected, analyzed and interpreted from a place without the need to move.

Finally, the factor related to the increase of the human resources' abilities and capacities to exploit the possibilities of the technological changes in the international markets, also helps to describe why the emergence of companies born globally. A large number of people have gained international experience in recent decades. This experience, which is related to mobility between nations, creates a potential number of employees with the ability to communicate, understand and do business with companies from other cultures. These capabilities are a basic requirement to exploit opportunities offered by new production, communication and transport technologies. Another consequence of such increased mobility and cross-cultural education is that markets become more homogenous, and consumer preferences are no longer local. For this reason, human resources are one of the forces promoting the emergence of born global. In particular, the past experiences and current ambitions of the founder-manager of the company should be taken into consideration.

Knight and Cavusgil (2004) refer to a series of empirical studies that emerged contradicting the gradualist theory of internationalization, since small, technology-oriented firms operate in international markets from the earliest days of their creation and tend to be directed by visionary entrepreneurs which conceive the world as a single market without frontiers.

Based on the research results presented in their paper , Madsen and Servais (1997) propose a model as a research framework for future work on born global born global. The proposed model is.

The proposed model is a theoretical framework that serves as a reference for the development of empirical work on born global. The experience of the founder-manager, his level of ambition and the general motivation of the same influence significant in the creation and development of a company of these characteristics.

In studying the history of the founders and the company, it is also necessary to investigate possible interconnections with other companies, the corporate governance structure, as well as the history of the members of the executive committee and their networks. With regard to the environment, it would be important to define the nature of the product and its competencies, in order to determine whether the company's supply can be demanded internationally. Finally, these characteristics must be in connection with the technological level of the company, its specialization and the degree of internationalization of the market.

Phase, process and life cycle approach

Chen H. and Y. Huang (2004) propose four ways in which a company can carry out a coherent internationalization process:

1. Alliances of services after the sale

2. Partnerships for the distribution of their products

3. Alliances to develop products

4. Alliances to build retail distribution channels in global and local markets.

Other authors argue that the growth models and the speed of change of successful new firms vary according to the initial conditions of the company, with the entrepreneurial skills of managers and according to the degree of technological effort of the company.

On the other hand, it is noted that large firms tend to grow faster than medium-sized firms by "proportion effect law". While some companies go through four phases, other companies skip one or more phases. Most companies, according to Prasad S., (1999), became global in a second phase.

Strategic approach

This approach comprises several activities or strategic options, namely:

Exports

The results of the research indicate that micro-enterprises have had a reactive export strategy, unlike medium-sized enterprises. Possibly because they use competitive models different from those employed by the exporting companies and because the small companies are conditioned by the option of the competitive model that they follow to internationalize. In Spain, for example, companies prefer to outsource their export activity using independent channels. In this country, some differences in the selection of modes of export channels were identified based on the specific characteristics of the company, internal marketing strategies and the context in which they operate.

The scope of this proposal goes even to the suggestion of public policies of management, and advise the politicians to focus on the personal characteristics of the main founders of the businesses that seek to internationalize; Including support and assistance as part of a comprehensive country strategy.

Joint ventures

Joint ventures and strategic alliances

Joint Ventures can be an investment strategy, can be an entry strategy for SMEs with limited resources and knowledge of the market.

Because small firms can adopt a more flexible approach than medium-sized companies, in terms of the number of internationalization dimensions .

In family businesses, the expansion strategy is found to be more secure when the decision to involve the family is active. This also happens in companies where institutional factors such as ownership and internationalization, organizational factors such as size and age of the firm, and the strategic factor of customer orientation are significantly important for corporate entrepreneurship .

The Process of Companies’ Internationalization

The internationalization of companies: definition and objective

Under the strategic approach, the internationalization of companies is the result of the adoption of a series of strategies that consider both the resources and capacities of the company as well as the opportunities and threats of the environment. The internationalization of companies consists of the process by which a company participates in the reality of globalization, that is, the way in which the company projects its activities, totally or partially, to an international environment and generates flows of various types (commercial , Financial and knowledge) between different countries.

Given the above, the process of business internationalization must answer the following questions: Why is the company internationalized? What is the process to carry it out? How is it internationalized? And where can you locate your activities abroad? Based on these questions, the present bibliographic research has as main objective to show the process that companies must follow in order to internationalize.

There is no one way for a company to start having international activity. What we do find is a possible path that sets us different options depending on the control that the company has in its external activity, the risk that it assumes and the resources that it uses in its international expansion.

Another definition of enterprise internationalization is "the process of adapting exchange transaction modalities to international markets". This definition expresses the idea of ​​internationalization as a very dynamic activity and includes the strategy of way of entry of dimensions and selection of the international market. These two dimensions represent the fundamental strategic decisions in relation to the internationalization of a firm (Buckley, 1995).

The objectives of internationalizing a company are (Canals, 1994):

• Opening of new markets.

• Lower production costs.

• A more efficient production and distribution structure of the company.

Although there is a succession of explanatory proposals on the international behavior of the company, known as Theory of internationalization or Eclectic theory, at the beginning of the seventies there was no theoretical body capable of giving answers to heterogeneity Of the situations observed in the internationalization of the company.

From a microeconomic point of view, starting with the company, the Paradigm of the Stages of International Development, proposed by several authors state that the process of internationalization of a company is a gradual commitment of the same to the international markets.

As a main hypothesis, the model postulates that firms start their international operations when their size is still small, but expand following the guidelines of a business growth strategy to the nearest "psychologically" markets. Accordingly, one can point to five steps for internationalization:

1. the company is developed in its domestic market,

2. begins to carry out irregular exports,

3. independent agents are employed,

 4. Commercial subsidiaries are established,

5. the productive subsidiaries are put into operation.

At the time, this set of contributions was a break with the premises in force until then. These premises implied the description of the phases that take place in the processes of internationalization based on the experience gained on the operation of international markets and the availability of resources to be introduced in them. In addition, the gradualness and the contemplation of the time factor try to give the Scandinavian approach a certain dynamism. However, the excessive specificity with which the different stages through which business is to be traversed in its international expansion are listed, led to one of the model's endless criticisms of its determinism.

This is not the only weakness noted by the literature. Indeed, authors such as Andersen (1993) question certain explanatory facets of the contributions of the Scandinavian School due to their evident inability to reveal the reasons that push the international business area to make certain decisions. While others, such as Fletcher (2001), add the predominant cross profile among studies.

 In addition to the above, there are multiple theories that address the process of internationalization and its determinants. Each focuses on one or several partial aspects of the phenomenon, with the exception, perhaps, of Dunning's eclectic approach, which has a more general view from the integration of previous inputs. This set of theories can be grouped around seven blocks of doctrinal currents:

The classical theory;

The product life cycle theory;

The Uppsala model;

Porter's paradigm;

Strategic theory;

The theory of internationalization

The Dunning paradigm.

On the other hand, in terms of the type of companies, according to Canals (1997) one can distinguish four large types of international companies that, in turn, reflect the same stages of internationalization. These guidelines of the internationalization process are:

Export company.

Multinational company.

Global Enterprise.

Transnational company

Exporting company

Normally, companies start their internationalization process when exporting. In the first stage, internationalization is passive and consists of specific exports to international markets. This export has two characteristics: the export from the country of origin to some foreign markets and the concentration of activities of the company in the country of origin.

Multinational company

This type of company arises in century XIX in some industrial countries like Great Britain and Germany. The multinational company intends to exploit internally some important competitive advantage, a technology or a special product, for example, by diversifying activities in many countries. The objective of a multinational company is the almost exact reproduction of the parent company in each of the subsidiaries abroad. This model has been adopted by a variety of sectors: food companies such as Nestlé or Coca Cola; Consumer companies like Procter and Gamble or Unilever; Auto companies like General Motor or Volkswagen. In all these cases, the attraction of the locational force has led to an almost complete decentralization of the activities of each country.

Global Company

In the 1980s, global companies appeared, characterized by their heavy weight in international operations within the company and by the high concentration of activities, mainly purchases, production, as well as research and development, in the country of origin or in Few countries.

This type of company differs from the exporting company by the greater weight of its international operations and differs from the multinational company by the high concentration of critical activities in the country of origin.

Porter (1986), in one of the works with the greatest impact in the eighties on international strategy of the company, distinguishes the typology of strategies: export strategy, multinational strategy, global strategy and decentralized export strategy. This author argues that the purest international strategy is the global strategy, with a strong concentration of activities.

However, it is not enough to concentrate activities, but it is necessary to develop a capacity to adapt to each country and market. One can not sell the same type of food in Costa Rica as in Germany.

Transnational corporation

The challenge of companies with international activities is great: it is about combining economic efficiency with the ability to adapt to local markets. Bartlett and Ghoshal (1989) describe the emergence of this new type of organization that they call transnational enterprise.

The transnational company adequately combines maximum efficiency, responsiveness to local markets and the flexibility to convey experiences and innovations that arise in any of the countries to the entire organization.

Main characteristics of international companies

These types of companies can be characterized as follows:

The concentration of activities.

The degree of adaptation to local needs.

The way to disseminate learning in the organization

The design of an internationalization plan

Before designing the plan to internationalize the company, the objectives of such internationalization must be written and very clear. The first important factor in any internationalization process is to have a product of sufficient quality to be offered in international markets. The decision on the combination "product to be offered and market to serve" is the first to be taken in an internationalization process.

Other factors must therefore be taken into account: the similarity of international markets to the local market, the existence of similar distribution channels, physical closeness, the potential size of the market, the degree of rivalry between international markets, The risk of change, political-economic stability and the company's familiarity with these markets.

For many companies, the similarity in marketing processes and the size of the market are critical factors in deciding where to enter. Once the decision on the product-market combination is made, it is essential to entrust the responsibility of the internationalization process to a person who knows in depth the peculiarities of the clients of the country of destination, as well as the patterns in advertising and distribution. With the collaboration and guidance of an expert on a particular local market, the company has to decide the most appropriate mode of entry. So that this final decision has been made, a business plan must be drawn up by the company in that country, in which the resources necessary to achieve the objectives are estimated. Then, it is the decision to centralize or decentralize the different activities of the company to achieve the objectives of internationalization. Once the centralization or decentralization of certain activities or functions has been decided, it is necessary to establish the types of mechanisms for coordination and control. It is necessary to define how this unit will be coordinated with the parent company and, at the same time, what control mechanisms have to be established to evaluate its results. With regard to control mechanisms, care must be taken to allow them to evaluate the results without stifling the initiative of the responsible in each country.

Input modes and factors influencing input mode selection

The choice of the form of entry into an external market is one of the most critical strategic decisions facing the company, since it will exert a relevant influence on its future business success. In principle, there are three generic ways of serving international markets: exporting, licensing or directly own investments. Both export and direct investment can be carried out by the company itself or in alliance with another; Each of these forms of entry into international markets implies a commitment of different resources and, consequently, a different intensity of internationalization.

You must prepare a business plan with the criteria to be able to evaluate one or another input mode option. At the time of making this decision it is useful to consider internal factors and factors external to the company.

According to Canals (1997), among the most relevant internal factors are:

The characteristics of the product, the complexity of its production and transportation.

The ability of the people of the parent company to properly manage the process.

The financial resources available to address the internationalization plan.

The degree of internationalization of the company

The ability to service foreign customers.

The importance of coordination between research and development, production and commercial departments.

On the other hand, the external factors include:

The importance of this foreign market for the company, as well as the conditions of this market to enter other international markets.

The potential of the market, so that its volume may or may not justify the decentralization of the productive activities of the company.

The real possibility of hiring qualified personnel for the management and technical tasks of the company.

The country's economic attractiveness: financial stability, inflation, taxes, etc.

The political stability of the country.

The climate that exists in the country facing direct investment from abroad.

The degree of protectionism of the country against imports from abroad.

The supply of key raw materials in the production process in the country.

The above comments are not intended to be conclusive or clear about the ideal decision regarding the mode of entry, rather they are intended as reflections on how to approach this decision; In addition, a number of criteria should be taken into account to assess the various modes of entry to international markets, including the following:

Cost effectiveness.

Advantages of acting quickly.

Market share.

Degree of control.

Risk.

Necessary resources.

Flexibility.

Degree of learning in the organization.

The new international environment requires companies to develop dynamic capabilities that enable them to compete in current and future markets. The advantages that are obtained of the internationalization of the company derive from its capacity to coordinate activities of the value-added chain.

In order to survive globalization and high competition, internationalization has become a necessity for the survival of the company. It distinguishes the formulation of various strategies that companies can follow in their internationalization process, which, in turn, reflect different degrees of intensity: exporting company, multinational company, global company and transnational company.

Problems of an organizational nature usually generate abundant internal conflicts during an internationalization process. The decision on the degree of centralization or decentralization of certain activities is linked to the establishment of two types of mechanisms: coordination and control. Entry procedures in international markets can be very varied: export, direct investment or licensing.

When evaluating a decision to enter international markets, it may be useful to distinguish between internal factors and external factors.

The internationalization of companies follows a sequential process that depends on the gradual accumulation of knowledge on external markets. From this point of view, the investment of the company in a particular market is carried out by means of a sequence of different stages and in each of them, as experience is acquired in said market, the level of committed resources is higher; Secondly, firms prefer to acquire knowledge about foreign markets before competing in them, and therefore markets similar to the one of origin are preferable.

Lack of knowledge and resources is the main obstacle to internationalization. These obstacles are reduced through incremental decisions that allow learning about international markets and how to operate abroad.

Competitiveness in a Globalized Economy

The current international economic environment is becoming more dynamic and global. Trends such as growing interdependence among countries, the formation of regional blocs, the emergence of emerging economies in Asia and Latin America, as well as the surprising technological advances in different sectors, constitute an increasingly competitive and changing international environment. As a consequence of these trends, the phenomena of globalization of markets and the internationalization of firms have become more pronounced, making it more necessary to have a cosmopolitan and international view of economic activity and to rethink economic concepts and strategies within an open economy model.

In recent years, additional facts have appeared that in turn accentuate the globalization process, such as:

High indebtedness in international markets by governments and companies, due to internal credit restrictions and the abundance of resources abroad.

Financial flows arising from the growth of short-term and long-term portfolio investments by institutional investors such as pension funds, insurance companies, mutual funds, etc.

Financial flows related to the development of new financial instruments and hedging of foreign currency risks.

The internationalization of technology due to the accelerated process of technological innovation and its costs, through: franchises, licenses, patents, etc.

The importance of managing human talent, as companies have been forced to seek and train managers with international mentality and leadership skills.

Globalization: a new order to act.

At some point crossed a dividing line, most economists say that occurred in 1973 with the first oil crisis, others refer to the revolution experienced by the media and information technology, the truth is that In recent years there has been a momentous change that has meant a profound conceptual remodelling. That is to say, in a relatively short period of time the perception of the world from the point of view of the economy is centered on the relationship and interdependence.

As a phenomenon, globalization has its basic impetus in technical progress, and particularly in its ability to reduce the cost of moving goods, services, money, people and information. This phenomenon of "reduced economic distance" has made it possible to take advantage of opportunities in the markets for goods, services and factors, reducing, but not eliminating, the importance of trade barriers.

Although globalization factors are multiple, four broad groups of explanatory elements can be distinguished:

Social and governance factors

Factors derived from cost pressure

Factors related to the market and demand

Factors derived from competition.

Within the social and government factors are most notable aspects:

Free trade policies, since globalization assumes that international trade is first and foremost possible (more open borders), more feasible (international free trade agreements) and less expensive (tariffs increasingly lower)

The logical and reasonable technical harmonization that is slow but inexorably taking place in almost all sectors of the world economy.

The economic integration of large areas such as the European Union, MERCOSUR and NAFTA, which represent a process of creating internal markets free of customs barriers, but also of unifying the technical, regulatory, social, fiscal and monetary conditions of activities Of the member countries.

The role of information and communication technologies that have approximated human and commercial relations unthinkably a few years ago.

In relation to the factors of cost pressure, it refers to the need for firms to increase market shares in order to reduce total average costs (economies of scale) and at the same time to achieve lower direct costs through The experience effect (curves of experience) and the greater ease to arrive at any point by reduction of the logistical and transport costs.

On the other hand, research and development is another element that pushes for globalization, since the technological advance, capable of changing the competitive configuration of whole sectors, demands to be at the center of the innovations since no country is self-sufficient since A technological point of view. Also the difference in costs between different countries causes some industries to settle in different countries or companies from countries with lower costs try to address desirable markets and with more attractive margins.

In the group of factors of market and demand highlights the pressure to grow, it is to increase the volume of business through access to a wider market, with the aim of meeting new needs of consumers each Time with more similar tastes although with different requirements of personalization. Other elements are the existence of a new global demand and the use of new global distribution systems.

Finally, in the group of factors derived from competition is the increase in world trade, which motivates companies to participate in a greater internationalization in their activities. On the other hand, the interdependence of the nations mobilizes the natural increase of the flows of goods and services. Also the existence of multinational competitors and the globalization of competition themselves require responding on all possible fronts.

The increasing globalization of markets is reflected in the strong increase in world trade in the last three decades, which has comfortably outpaced the increase in world output and the rise of direct foreign investment that has grown since 1970 at unsuspected rates. It is also reflected in the integration of the markets themselves, the development of cooperation agreements between countries and the lifting of some types of controls.

On the other hand, the strong need to gain competitiveness encourages companies to operate in larger markets, cooperating and competing in a game that is perceived as mutually beneficial. The concept of globalization therefore relies on a number of fundamental aspects such as: economic interdependence and the physical integration of markets, standardization of products, homogenization of national demands and the view that competitive advantages do not Are achieved by the sum of countries but by the integration of coordinated activities at the global level.

This phenomenon of the globalization of economic life affects all social partners. In the first place, companies are presented with new opportunities to introduce their products into foreign markets; But at the same time, they also face significant challenges, as they will have to face foreign companies in their local markets, resulting in increased domestic competition and greater pressure to improve quality and price. Business managers also pose significant challenges as they have to operate in different geographic markets and with different clients. Globalization increases difficulties and makes management tasks more difficult. The government imposes restrictions on the design of its economic policy, reducing its room for manoeuvre.

The process that presupposes the internationalization associated with economic globalization and competitiveness in the international context are considered to be of the first order when conducting an in-depth study on this subject. Under this internationalizing pressure, competitors, suppliers or customers are increasingly difficult to access markets from abroad. Economic globalization is forcing companies to compete in world markets and hence their interest in international competitiveness.

As the economy becomes globalized, companies have the need to operate in foreign markets since they are supporting the action of competitors from third countries. In this way they need to expand their markets, either exporting, establishing agreements or manufacturing products abroad.

  To the extent that the boundaries between the domestic and foreign markets are dissolving at a high speed, companies in a given area or country find the possibility of operating in another area or country, bringing this with them that the intensity of the Competition grows and with it the demand for competitive improvement and the search for new markets. Therefore, the economic health of a country depends on its own strengths, capabilities, advantages and level to compete. In an open global economy like today, competitiveness is therefore a key variable to ensure business success.

The globalization of international economic life directly affects companies by creating challenges, mainly due to the complexity it imposes on the management of the entities, the restrictions it imposes on national economic policies, as well as the growing presence of foreign companies in the national market.

In an environment of these characteristics, internationalization appears as a pressing need for companies. However, it should be noted that this is a difficult, complex and costly process that can even harm the company that undertakes it if it does not previously carry out a serious and rigorous strategic analysis before making such a decision. Both the process and the problems that derive from it are issues that deserve the attention of government, businessmen, academics and the media.

The company's vision based on competitive advantages generating resources (RBV)

The use of the diverse resources applied in the companies provokes to generate competitive advantages in the organization. In this way, it is necessary to understand that organizations must be conceived as tangible and intangible resources that, over time, grow, making them stronger or weaker than their competition.

Resources of any kind are the elements that companies use to carry out their activities and thus achieve their objectives. Skills, skills, capacities and resources are factors that are part of a company and that undoubtedly become an important and fundamental part in the daily operation that the company performs to generate profit and, in turn, positioning itself in the market.

Nowadays a fundamental part for the company to be able to generate profit or as it is said in the world of business to be successful, it will depend on the administration of all the types of resources that it applies.

The vision of the company based on resources

In recent years a new perspective on the development of the strategy has been gaining strength. It is called the resource-based vision of the company and has its origin in the work of the first theorists of strategic management.

Harrison and Caron (2002) from this point of view, describe that the organization is a set of resources that is divided into the general categories as follows:

1. Financial resources

2. Physical resources

3. Human resources

4. General resources of the organization

The first covers all the monetary resources available to the company. The second as the plants, the equipment. The location and access to raw materials. The third is focused on skills, education and training of the individuals who are part of the company and the fourth that include a great variety of factors particular to each organization, such as the structure of formal information, management techniques, systems Internal planning and control, culture, reputation and relationships both within the company and with external stakeholders. But for Dess and Lumpkin (2003) the resource-based business vision combines two perspectives:

1. Internal analysis of phenomena within a company

2. External analysis of the sector and its competitive environment

This goes beyond traditional SWOT (Strengths, Opportunities, Weaknesses, Threats) analysis by integrating the internal and external perspective. It is a very useful reference framework for gaining insight into why some competitors are more profitable than others.

The resource-based enterprise vision is useful in developing strategic for single-company, but also diversified, companies because it reveals how core competencies rooted in a company can help them exploit new product and market opportunities .

Company resources and sustainable competitive advantages

From this perspective based on resources, the strengths are the resources and capabilities of the company that can give it some competitive advantage. Weaknesses are the necessary resources and capabilities that the company lacks, resulting in a competitive disadvantage. Opportunities are conditions in the broad and active environments that allow the company to take advantage of its strengths and / or neutralize the threats of the environment. Threats are conditions in broader and more active environments, which can undermine the competitiveness of the organization or hamper stakeholder satisfaction .

If a company has a resource that allows it to seize opportunities or neutralize threats; If this resource is a privilege of a few companies and if, in addition, it is impossible or very expensive to imitate, it is possible to achieve a sustainable competitive advantage.

For Harrison and Caron (2002), sustainable competitive advantage is an advantage difficult to imitate by competitors, resulting in above average results over a long period of time for the company in question. For example, Marriott's success is attributed to advantages created through resources that are very difficult to replicate for other companies in the hotel industry. The first of these resources is financial control. Marriott can determine and anticipate construction and operating costs with astounding accuracy. The second is that Marriott has developed distinctive competence in customer service, or "it has become the provider of choice." With the future in mind, Marriott is investing heavily in creating a third organizational capacity as the "employer of choice". The executives of this company think that as there are fewer incorporations of young people between 18 and 25 years into the labor market, good workers will be increasingly difficult to get. It should not be forgotten that in a service activity such as hospitality, good employees are vital as they deal directly with customers.

One may consider that several strategy experts believe that the effective development of organizational resources is one of the fundamental reasons why some companies are more successful than others. Most of the resources that a company can acquire or develop are directly related to the stakeholders of the organization. For example, financial resources are closely linked to good working relationships with financial intermediaries. In addition, the development of human resources is linked with the management of internal stakeholders. Finally, organizational resources reflect the organization's conception of the expectations of society and the links it has established with its internal and external stakeholders. In this way, one points out that any company or part of it is a competitive system where there are only three things to think about in principle:

sign

clients

competitors

However, it is clear that within this system, it is possible to describe who has competitive advantage and the scope of this. There are only three possible answers to the question: who has the competitive advantage? The answers are: we (our signature), a competitor or none. The competitive advantage can come only from two sources: economic cost advantage and / or differentiation. Differentiation means that a firm has differentiated its product or service in a way that a large group of customers prefers. There are many ways to differentiate the product or service, in fact the important part of the strategy is to invent new forms and differentiation is limited only by human ingenuity.

Resources generators of competitive advantage

From this point of view, Porter points out that a company will create value insofar as it is oriented to one of the two generic types of Competitive Advantage: Competitive Advantage in Costs and Competitive Advantage in Differentiation, which depending on the panorama, the firm's competitive edge can have broad or focused reach.

As its name indicates, the Competitive Advantage in Costs seeks to order the activities of a company in such a way that it allows it to obtain a lower cost than other firms participating in an industry in the production of a particular good or service.

In the former sense, the Competitive Advantage in Differentiation seeks to provide the customer with a unique product and service with a performance superior to the competition, through which it can charge a price higher than its competitors.

Although Porter indicates that the sources of competitive advantage lie in the activities, he also notes the presence of aspects underlying the activities of a "structural" nature that would support the behavior of costs. To these structural aspects Porter called them Guides or Guidelines of Cost or Differentiation.

For the resources of the company and sustainable competitive advantages are not the basis for achieving competitive advantages or sustainable advantages over time. In some cases, a resource or capability helps a company increase its revenue or lower its costs, but the company gets only a temporary advantage because the competitors quickly imitate or find a substitute for it.

In order for a resource to provide a company with the potential to achieve a sustainable competitive advantage, it must possess four attributes according to Dess and Lumpkin (2003): First, the resource must be valuable in the sense that it exploits opportunities and / Or neutralize threats in the company environment. Second, it should be somewhat rare among current or potential competitors of the company. Thirdly, the resource must be difficult to imitate by the competitors and fourth, the resource should not have equivalent strategic substitutes.

Determining factors

Obviously, competitiveness, in the context of an economic environment, a culture and a business philosophy is related to four determining factors. Productivity, the capacity of the rational allocation of resources; Organizational capacity, processes and adequate management; The capacity for adaptation, understood by the flexibility and the speed to adapt from the internal capacities of the organization; And the strategic capacity to execute decisions at the political level. Looking for efficiency in the product-market vector and in the application of the appropriate technologies .

There are some authors who consider the competitiveness, as the capacity of strategic response to the changes of the environment and that is conditioned by diverse external and internal factors. The internal factors are associated to the scope of the company: technological policy, quality management, organizational change and the same strategic direction. Among the external factors is the degree of propensity to compete in the sector. In this business context, competitiveness means rationalizing the production process, increasing value and reducing the costs of the resources employed. The following are some statements of competitiveness:

A competitiveness is an internal characteristic of the company. A market, or environment, determines the temporal level of intrinsic competitive capacity. A company has continuity only if it is able to constantly adapt to the new conditions of the environment.

The competitiveness of a company is proportional to the benefits it offers and to its internal characteristics. A company is competitive when its capacity to adapt to market variables is greater than or equal to the speed of mutation of the same. When this capacity is lower, there is a lag that leads to crises: it forces prices to fall, market share loses, profits decrease, and there is an excess of personnel.

The crisis means the need to modify the competitive parameters of the company, and at the same time, represents an opportunity for improvement. In this way points out that the competitive advantage is of all the strategies, being numerous the factors that can give a competitive advantage. Example of the above is:

The human factor

Community

Businessman

The workforce

The capital

It also refers to how one should behave to be competitive in your industry. The function of the competitive advantage is to generate profits, and therefore to raise the economic profitability, above the average of its sector obtaining the maximum participation in the market, since it is key to respond to the necessities of the clients.

It also refers to how you should behave to be competitive in your industry. The function of the competitive advantage is to generate profits, and therefore to raise the economic profitability, above the average of its sector obtaining the maximum participation in the market, since it is key to respond to the necessities of the clients.

CHAPTER III.

METHODOLOGY

The research methodology implies methods and techniques of qualitative and quantitative research, while data collection was conducted through literature review, field research and discussions with Recaș winery. Steps performed for this research are based on questionnaires, literature studies, achieving proper questions for the interview, checking the degree of understanding questions among the potential respondent, distribution, information processing, information analysis and interpretation, drawing conclusions. The questions of the interview were assigned representative for Recas winery in order to obtain relevant conclusions.

To treat coherent studied issues and to ensure an adequate scientific work, support methods were used both common and specific research methods. For scientific examination of the issues and goals proposed in this paper were used the following research methods:

analytical method through which one may reach the essence of phenomena and processes of research, analyzing the theoretical approaches regarding the categories of small and medium enterprises, entrepreneurship, internationalization and their role in the economic mechanism;

qualitative and quantitative analysis, which analyzed qualitatively the social-economic content of the surrounding reality and the manner the business will be quantified during internationalization process Recaș winery;

dynamic analysis, through which one may surprise highlighted changes in the analyzed economic phenomena;

induction method through which one reasoned from specific to general, from the generalization of scientific facts, formulating a number of conclusions;

deduction method through which one reasoned from general to specific and concrete, explained and private phenomena, especially those related to internationalization of Recaș winery;

descriptive method through which one described phenomena and facts on internationalization process of Recaș winery;

synthesis method through which one settles connections between phenomena of previously analyzed in the paper, along with a synthesis of theoretical approaches on the concepts of entrepreneurship, internationalization trends of the existing research in this area and the basics in respect of the improvement of Recas winery business performance in the national economy.

The research results allow the formulation of the following issues with innovative character:

systematization of conceptual approaches regarding the definition of enterprises

systematizing and synthesizing classical and contemporary economic thought on entrepreneurship

importance of argument, determining role in the contemporary economy of Recaș winery

systematization of EU policies

an analysis was performed regarding the current situation of Recaș winery in Romania

systematization of conceptual approaches on internationalization of Recaș winery

analyzed the internationalization of business stage of Recaș winery

analyzed issues concerning the internationalization of Romania Recaș winery business by applying the "problem tree"

Correct and consistent presentation of research results imposed following objectives:

Objective I: Collaboration with the macro-environment

Objective II: Elements on the business impact of internationalization on competitiveness

Objective III: Support for internationalization of Recaș winery’s business

Objective IV: The issue on the internationalization of Recaș winery’s business

Objective V: Synthesizing the internationalization of Recaș winery’s business issues in Romania by applying the "problem tree"

Definitive aspects of the main research tool – the interview

"The interview, as a research method is universal in the social sciences" – Herbert H. Hyman said in a reference work designed to identify factors responsible for empirical errors, the usage of this method concerning data collection and assessing the possibilities to minimize the effects of these factors. Not only in the social sciences (sociology, law, history), but also in the Humanities (psychology, social and cultural anthropology, demography) and Economy, as in the practice of various professions (journalists, educators etc.), thr interview proved to be irreplaceable. The shock of surveys done very methodological concerning the current discussion about the value and limitations of the interview, the more a long period in our literature, specialists wrongly classified the interview as a "second-class method".

The term "interview" was globally imposed, and one may say, therefore, that the interview and conversation have the same meaning. Etymologically, the term "interview" means meeting and developing a conversation between two or more people. That is, in fact, the defining notes: the interview is a face to face conversation during which a person obtains information from another one.

Advantages and disadvantages of the interview as a research method

Kenneth D. Bailey presents both advantages and disadvantages interview, signalling more advantages than disadvantages . The following advantages are listed below:

flexibility, ability to obtain specific answers to each question;

higher rates of response, and assured of getting answers from people who can not read and write, as well as from people who feel more protected when writing than talking;

one may observe nonverbal behaviors, which increases the amount and quality of information;

it ensures standardization response conditions, which is impossible in the case of postal questionnaires;

ensuring control over questions of succession, which has positive consequences on the accuracy of responses;

it is a collection of spontaneous answers, knowing that the first reactions are more significant than those made under regulatory control;

it provides personal answers, without the intervention of others;

one may responde to all questions and thereby, it provides information for testing all research hypotheses;

it specifies the date and location of the research, which ensures comparability of information;

the more complex is the study of problems through the use of forms, questionnaires or interview guides, more detailed with more questions, the greater is its subtlety

As any research technique, the interview has some inherent disadvantages and limitations. Kenneth D. Bailey considered them as following :

high cost, not only of interviewing hours, but also for other stages and moments of the design and implementation of research-based interview;

necessary time to identify the persons included in the sample to obtain the agreement and progress, sometimes requiring multiple visits to the same address;

errors due to interviewers in terms of asking questions and recording responses accordinf to the "operator effect";

unable consultation documents in order to produce accurate answers;

inconvenience related to the fact that individuals are required to respond, regardless of their disposal, psychical fatigue and so on;

sometimes, there is a lack of anonymity, being known the address and telephone number of persons to be interviewed;

sometimes, there is a lack of standardization in the wording of the questions, which limits the comparability of information;

there may be a difficulty in accessing those that are sampled.

Both advantages and disadvantages are relative, but they must be judged in relation to other research methods and techniques in sciences, especially to the different methods and types of interviews.

Conducting research interview

Depending on the type of interview, the conduct of the conversation between the operator of inquiry and respondent have certain features: somehow, the interview will be a telephone one and with different occasions, it will be face-to-face, but the latter not will perform identically in the case of a non-directive and in the case of an survey – based interview with closed questions. There are some general taken into consideration when conducted the present research:

the interviewer asked questions that followed the order of a questionnaire

the interviewer read each question, allowing the interviewee to pursue another questionnaire asking questions and giving possible response options.

the interview conducted and involves a fruitful research ensuring mutual understanding between the interviewer and the person being surveyed.

Data collection – interview with Mr. Ciprian Roșca, commercial director of Recas Winery. Validity

Regarding the validity of the interview, it shows a high degree of validity, the subject being very cooperative and serious regarding the multitude of details provided, as one may observe as following. There is a possibility that I took into account about exaggerating certain subjects, in particular, the proactive nature of the business or on potential consumers, but the received answers revealed a number of interesting details that the winery representative has drafted without realizing their importance for me or for the research. The interview had a very formal note related to the professional discourse and the strategies by which the director of the commercial department can "convince", bringing an important contribution to my work in terms of how people are attracted and convinced to become clients of the company, consumers of its products, especially the chances of development of the Recas winery in the context of internationalization. So I folded the interview onto the company’s personality, trying to highlight the most important and useful data for the present research. This data collection technique is very productive, but attention needs to be increased when it feels an exaggeration of those registered.

The interview with one respondent was held in the winery, because I consider to be benefic the presence of the space we are talking about at the time of interview, trying to understand this environment, trying to make this interview to seem more like a discussion because I have not respected a classic rule, aiming to relate more with the respondent, thus providing higher validity of collected data.

From the interview that I realized I did understand the main criteria that go into ensuring the success of the company in the context of internationalization. Also, through the interview I managed to channel the discussion towards the part that interested me directly, the data I have obtained helping me to complete the company’s profile and to identify opportunities for its development abroad, respectively in Belgium. Below, one may observe the interview and its answers.

Question 1. Who should handle consumer education in Romania and who does more in our market?

First, manufacturers should deal with education in the wine sector, together with merchants, supermarkets, restaurants, distributors. Then people selling wine to consumers need to be educated and there are several restaurants that make this work and course specialist at wine shops around the country, which unfortunately are few. From producers, it would be more influential if large wineries would increase economic level of quality wines. However the 10 manufacturers control represent over 80% of the market and the wines that are mostly Romanians have contact every day. I believe that any winery that sells million bottles of wine of a fair and good quality level can change the market more than 50 small wineries that have only a niche market, largely unseen and inaccessible to people.

Question 2. What do you think of the wine prices on the market? Why some Romanian wines arrive to cost less in foreign markets than at national level? 

Prices are generally higher at all levels, due to a relatively low level of worldwide competition. We have 4 times less manufacturers as in Hungary, a country with much smaller vineyard area and 8 times less than Greece or Austria. So the offer is relatively small and controlled by fewer companies, which prefer to keep prices high enough. It is absolutely logical that prices out to be smaller. First, there are some countries where the costs involved are significantly lower and I am referring not only to the costs of wine distribution / promotion, but at the level of taxation (VAT, payroll taxes, other taxes). On the other hand, if a winery outside Romania wants to sell wine, it must be produced with the price / quality better as the level of competition in that market. It's not enough just to have good wine and not just be cheap. If it's better and cheaper than direct competition (Chile, Spain, Australia, South Africa, France, Belgium and so on), importers and the public will not buy our products. Producers who sell for the same price level as the one on the Romanian market, they have no chance to sell in countries with strong competition (which mostly are countries with great wine market).

Question 3. How do you quantify the impact of various wine competitions on sales and which competitions you consider to be the most relevant?

For selling in Romania, international competitions results still have an effect, but it is not known as a spectacular facts as it was 3-4 years ago. As there are several manufacturers that participate in such competitions and the best wines are starting to earn their medals, while the effect will be diluted. Romanian competitors participate in Brussels, Paris Vinalies, Chardonnay du Monde. Important competitions in Europe that are relevant and eloquent are IWC London, Decanter, Mundus Vini Germany, plus the results from top wine magazines such as Wine Spectator and Wine- Advocate in US.

Question 4. Wine Bloggers play a role in the market. What do you think it would be?

Yes, bloggers are very active and is good to be a discussion and a debate about our industry. First, bloggers are a source of information for the industry and are useful for any winery to make a picture of the market situation in a given moment, about the wines stand in the market. I think bloggers influence certain segments of consumers, for example the right to purchase online and restaurants sector / sommeliers. I do not think they have an influence on the general public because the general public who consume 85% of bottled wine is not so enthusiastic to read about the wine they consume, nor enthusiastic bloggers are not writing about wine that the majority of people drink. 90% of articles on a blog about Recaș wines and premium wines are writing about average and very little is written about the wine that is largely economic in volume sold.

Question 5. What were the biggest challenges so far in evolution Recas and what are the plans for the future?

At first, for our company it was very difficult to enter the market, finding a vineyard completely unknown. Just as the export markets was very difficult to enter the market and now it is hard to enter new markets. In the last 4-5 years, the biggest challenge was the nature of the workforce and organizational difficulties to hire enough quality people to keep in touch with business development. We wanted to have by now very good oenologists, but we found so far with each level of education sufficient level that we want the wines.

No part of the production and sale is not satisfied with the level of preparedness of young people that we must undertake. As such all shareholders of Recas are very involved in the daily work, which is quite tiring, but I think it's good for our consumers. While we hope we can strengthen our team of youth people to be prepared, in this respect we started this year a new project where we hired David Cowderoy, a British oenologist experimented with the idea to seek and to train young people in Romania .

Question 6. In which manner, the import of wines reconcile with their production? Are you worried about the self competition somehow?

I do not see any competition with imported wines. I mean, if you still need to have a sales force in Romania- with all the logistics that means – Cars, wages, laptop, mobile phone, office – administrative staff, sommeliers, marketing / PR departments, warehouse, business and logistic is better to share commodity at all costs as much as possible.

Customers who buy imported wines will buy them anyway and it is better to buy from us than to buy from someone else. In addition I think is beneficial for our customers to offer a complete solution for wine: a widely range as both Romanian and imported products. Eventually we provide services and not only products.

Companies doing import wine only will have great trouble to make profit – it's hard to generate sales volume level only enough to cover the cost of imported wine. Romania’s imported bottled wine, in volumes, is quite low and this means that transport costs are relatively high and we can not get better prices from suppliers stranger. In addition, means and logistic costs and storage / money stuck quite a lot, so imported wines will never be at the same price level as in countries such as Germany, where there are registered big turnovers. And as such turnover is slowly and low prices means higher than normal, this means that imported wines are not very competitive compared to Recas wines.

Question 7. Can you tell us which are the stages for the internationalization of the company?

Internationalization can be simply defined as a process of increasing involvement in the our company's international operations. In describing the stages of internationalization it is necessary to resort to the concept of product life-cycle management. Every product goes through several phases, along its existence:

 – Introduction (launch);

 – Growing;

– Maturity (saturation);

– Decline.

           The internationalization process of Recas winery appears as a progressive, long-lasting one, which, as an evolution of product, it goes progressively from local market to global market.

The development of Recas winery can described by at least four sequential phases of internationalization:

Phase I: Exports from Romania. The product was launched on the domestic market where the company has a number of advantages that allow for acceptable transaction costs and minimize risks. The successful production domestically determines the decision to sell the wine abroad (the product is in the launch phase and the beginning of growth).

Phase II: Debut production in Belgium as importing country. Belgium as importing country has a market with an increasing demand for wine products. It therefore goes to assimilation into production. Belgium favours local production by economic policy measures (the product is at the end of the growth phase and the beginning of adulthood).

Phase III: Export from importing country: Recas winery continues to increase its production to meet local market an becoming more competitive, the company begins to export towards third countries (the product is mature stage).

Phase IV: Imports into Romania. Production volume in growth abroad and cost advantages allow direct selling in the country of origin (the product will be in the phase of decline), the winery being liable to give up its production, looking up to new products.

Question 8. What would be the motivation of the Recaș company internationalization?

Reactive response motivations of the company are those coming from business.

The pressure of competition. The company may lose market segment it owns in favor of a local competitor, benefiting from scale economy as a result of international activities;

The slump in sales in the domestic market. Some of Recaș products are in phase of the lifecycle. Instead of trying to prolong product life cycle internally, Recas winery can opt concurrently or not to extend the life cycle through market expansion;

Excess capacity. If the production capacities are not fully used, Recas company can look overseas expansion as a way to achieve a wider distribution with fixed costs;

Overproduction. This usually occurs in cases of decline in the domestic market, foreign markets accounting for an outlet for existing stocks. International expansion, due to overproduction, usually represents the involvement of management, but rather a safety valve. Once domestic demand returns to previous levels, international activity of Recas winery may be restricted or even abandoned;

Proximity to customers plays an important role in the international business of the company. Recas company aims to develop an international activity for the simple reason that a major part of its customers are located in geographically closed countries.

Secondly, there is the flexibility of production and advanced commercial technology, on which Recas winery can provide diversification and adaptation to the specific supply on different markets, as well as creating and maintaining strategic and competitive advantages.

One reason for Recas winery internationalization is the so-called managerial involvement or the senior management – directly engaged in international business – tending to widen the company's development, to impose an outward oriented strategy.

Development of information and communications network is both a reason and a condition of Recas wienry international expansion.

Evolutionary theory shows that the internationalization process of assimilation is based on cumulative information, lifelong learning as work progresses on the international involvement ( Learning by doing). This means the acquisition and development of knowledge regarding the specific foreign market, methods / forms operating environment features of international business are personnel component management to potential partners, etc. Also, in order to establish personal contacts and maintaining social interaction with market participants, there are established communication networks that allow permanent and deepening mutual relations.

Question 9. What would be the degree of involvement in terms of business expansion according to the experimental plan of Recas winery?

The degree of involvement from the world market delineates three stages of internationalization:

a) experienced involvement. This stage refers to our company as an exporter who engages passively or experimental and which is characterized by the following aspects:

Reactive attitude in relation to the external market;

Use of specific marketing strategies on the internal market;

Marginal allocation of financial resources management and international operations;

         b) active involvement. In this case, the management of Recas winery intends to develop international operations, marketing mix being ​​ realised on the foreign market. Exports continuously and progressively unfold.

         c) strong involvement. This stage characterizes Recas company as pursuing a business strategy worldwide, promoting not only commercial operations, but also investments abroad, including the establishment of subsidiaries and branches.

          Evolutionary theories show the existence of Recas winery as a local company gradually through several stages, based on corresponding development strategies and specific organizational structures.

Question 10. It is a proactive business?

The domestic market of the wine shares with similar trends over the medium or mature market countries: I have noticed a growing preference for higher dry white and red wines and rosé site in the past three years, being spectacularly exploded. Considering these indices, we focus every day on innovations and improve services offered in accordance with international trends that set the tone of local tendencies, so to offer consumers exactly what they want: quality products, standards above expectations and recognition market for each range, separately.

Substantiates proactive motivations voluntary commitment of the Recas winery in international affairs in order to make use of comparative, strategic or competitive advantages.

Access to resources often substantiates decision internationalization. This is, firstly, the possibility to ensure the business of Recas winery on a basis of stable supply of primary factors of production (raw materials, fuel) or intermediate products (materials, parts, assemblies). Such motivation underlies not only commercial operations (eg. Long-term contracts), but also some forms of strategic alliances and cooperation (subcontracts, joint ventures and so on). Secondly, a great importance is the one of growing international expansion in light of the possibility of access to financial resources by exploiting the opportunities offered by the world market or possibly the governments of countries where businesses are located;

Reducing costs and creating in this way, competitive advantages, is another motivation widely shared by Recas winery with international activities. This can be achieved by exploiting the favorable ratio of labor costs / labor productivity in countries where they are located as assembly factories or production. At the same time, the economies of mass production occurs in the event of large-scale international activities, contributing to lower production costs, on the one hand, and reduce transaction costs, on the other hand. Favorable effect on costs facilities offers of Recas winery by a number of states for production located in foreign investment (reduction in customs duties for imported products within industrial cooperation or to development of production in the host country, reducing or eliminating tax on reinvested earnings and so);

Technological advance available to the company can be better highlighted by involving the global market. This represents the technical innovation capability in the field of production, allowing Recas winery to continuously launch products on the market and high functional quality characteristics, while ensuring their exploitation in various markets throughout the product life-cycle management.

For example, in 2016 the greatest demand was represented by a corporate order worthing about 20,000 Euro.

Bestsellers of Recas Winery are those found in retail volume, value addition being added, and therefore, gaining profit. These include Hunyadi Castle wines (which are sold in retail at prices between 15 and 18 Ron), but gaining increasingly more and festive events and Schwaben Wein wines (which are sold in retail price around 12-13 Ron). Then premium ranges of catering were already depleted since stock harvest, respectively 49.800 units.

Last year, Recas Winery group recorded a consolidated turnover of over 24 million Ron, with a profit of about 4.8 million Ron .

Given the steady increase in recent years, estimates for 2017 are part of a growing trend of double-digit. Since the first 6 months of 2016, this estimate is confirmed: turnover for the first quarter of this year show an increase of over 12% (annual estimate for the full year 2016).

Question 11. How it will be ensured the management of Recas company’s subsidiaries?

Depending on the mentality of the host country. Recas winery recognizes the specific nature of foreign cultures. Operating on more markets and acting through local branches, Recas winery appears to have a high degree of internationalization. However, from the institutional point of view, it is rather a "confederation", including the mother-company and a number of semi-autonomous branches, but with a strong integrated structure. In this respect, the main features are:

products for local consumption are produced in Belgium as a host country;

Personnel management is provided by local subsidiaries, but managers are not treated on a par with those of the center;

Central control is exercised by levers and financial reports;

Also, one should take into account the mentality of the country of origin, respectively Romania. Recas winery concerns foreign markets as extrapolations of the internal market. It starts from the premise that everything in the home is higher than what comes from abroad. In this respect, the main features are:

products are manufactured in the country of origin, export represents an additional source of income;

Recas winery mentality and subsidiaries are identified by country of origin;

key positions in management, both at headquarters and at subsidiaries are owned by people belonging to the country of origin;

Question 12. In what consists of, essentially, the organizational culture of the company?

Recas winery as an internationalized company is characterized by a corporation culture, which is a certain mentality and a certain way of intercultural understanding. Considering the international nature and also intercultural affairs, one can describe the cultural approach to internationalization as dependent of dominant mentality in the company, the manager's attitude concerning the major decisions related to product marketing, finance, human resources and so on.

Question 13. Does Recas winery have some benefits in terms of multiculturalism?

Recent experience shows that multicultural approach offers significant potential benefits for Recas winery with global activities. There is equally true that in international management practice, in each case, combining specific elements of the three types of approach, a mix is designed to provide maximum benefits for the winery, such as:

Reducing costs- low degree of minorities integration (local staff) leads to dissatisfaction in work and absenteeism, which is translated into higher costs. Procurement of interviewers resources gives the company a good reputation in terms of intercultural relationships, more easily it attracts local human resources and itcan have better staff

Marketing- the existence of a multicultural staff allows Recas winery to understand local prices and adopt appropriate strategies for marketing

Creativity- multiculturalism, opposed conformism and favourable diversity of perspectives, stimulator of creativity

Optimum solutions – existence of a diversified base of experience and knowledge enables analysis of problems from different perspectives and facilitates correct decisions

Organizational flexibility in order to habituate- cultural diversity, organizational policies and procedures Recas company adopts more comprehensive and flexible.

The advantages of multiculturalism can increase the competitive strength of Recas winery as an active company on the global market: but this requires a committed management principles of creativity, flexibility and diversity.

Question 14. Usually, small and medium entrepreneurs face difficulties when they want to access foreign markets. What are the factors of production slowing down the penetration of international markets by Recas domestic producers?

There are many problems that Recas, Romanian entrepreneur, have to face when it comes to internationalization. General cause is the lack of experienced human resources, financial and material. Another impendiment is the lack of a variety of services on local market dedicated to internationalization. I do not think there is a general picture of Romanian companies in international markets, but each company is a special case. And Recas winery is highly appreciated abroad because it managed seriousness, hard work, investment, premium products and an open mind combined with a dynamic strategy. Recas winery learned step by step how to work with foreign partners, how to use the information received and especially, to respect agreements.

Question 15. How educated are Romanian manufacturers about the process of internationalization?

In my opinion, Romanian entrepreneurs knowledge about the process that our company proposes varies by industry. Usually though, the tech companies are considered global or most familiar with the use of online marketing based on which develops its business strategy. Classics SMEs are still at the beginning. What these companies have in mind is that in many situations, developing strategies using international services offered by online marketing platforms can help to avoid extinction or be absorbed by large companies.

Question 16. What are the main problems facing entrepreneurs of Recas company?

I'm not going to make a diagnosis of the situation about the authorities' involvement in the encouragement and support of the companies in Romania. For others I can handle. However I think the most important obstacles are the lack of capital, lack of information about a foreign market, the barriers of culture and language, unable to contact potential customers in foreign markets, lack of experience and time. Another example is the lack of entrepreneurial vision. When they grow a business, many entrepreneurs have in mind from the beginning to turn a local business into an international one where the local market is suffocated. Lack of experience or desire to learn how to use other alternatives such as the Internet to sell their products on foreign markets showing reluctance to risk and unavailability entrepreneurs to make use of opportunities.

Question 17. How did appear the idea of this business and in what way it was exploited?

The idea of this business was outlined on a period for many years, but culminated after experiences in Switzerland, France and Belgium as a research assistant at and from studies in the field of development and innovation in business followed in the M.Sc. in business administration from Haute Ecole de Gestion organized. Here every participant had the opportunity to work in various research projects in the internationalization, which allowed me to interact with a large number of entrepreneurs. Thus I was able to probe the reasons for and against internationalization and, in particular, obstacles that this process involves.

Question 18. Did you identify potential target customers?

We believe that those who consume quality products should dispose of effective service tailored to their budget in order to consume products.

In order to identify potential clients, the organization will develop a market research, and among the methods that can be used in this regard, one covers the following: prospecting "cold", "endless chain", participation in fairs and exhibitions, call centers of influence, prospecting by mail, telemarketing, observation and monitoring, networking.

Among the tools that can draw prospects, one may cover the following: free trials of products, guarantees of quality after-sales service; price as an indicator of quality of the product discounts as an incentive to try the product, package offers, public relations.

Question 19. In your opinion, what are the advantages that Recas winery as your company, as a wine producer, can get through internationalization?

The advantages of internationalization are: the possibility of developing an international brand, increase turnover and thus, sales, attracting business partners, well trained workforce and one dedicated to the development of a network of international business, different ways to innovate or improve our products and services.

Question 20. Why did you choose Belgium as a target market?

In Belgium, at the level of fiscal consensus, investors are your friends when you need help. In Belgium, foreign investors are encouraged in their efforts. There is a consensus in Belgium that investors are friends and one must help them. Belgium wants to engage more intensely in the Euro zone. The tax regime with facilities for investors, predictability and financial security and funds are dedicated to innovation were among the international market, advantages listed are Romanian companies' representatives. In Belgium we found a mature market, an ecosystem of investors. Moreover, new innovative business can develop into a safe investment. If you have a start-up in Romania, it is beneficial to invest in Belgium. For this company, Belgium is a mature market, which will develop innovative ideas. Launching wines on Belgian market is a natural step to which we have been guided by the company's customers with perspective and vision.

Belgium has a liberal business climate and a powerful industry that depends largely on international trade. The Belgian Government does not impose restrictive limitations or controls for foreign investors, resulting in a liberal investment climate. One may call, however, certain approvals for the realization of services in the economic and trade industry, subject to certain rules of consumer protection, obtaining construction permits, demolition and so on from local governments, insurance conditions to protect workers in the sense of not working in dangerous conditions or pollution. Recas winery as a foreign company will enjoy national treatment in Belgium, being assimilated to the indigenous. There are no restrictions on repatriation of capital and profits and no requirements regarding the participation of Belgian setting up Recas winery as a company with foreign capital.

Question 21. What are the risks of business internationalization in Belgium?

The company may face trade or investment issues, which are often the result of misunderstandings regarding the division of responsibilities between local, regional and federal authorities and it may be interpreted as an inconsistency of legislation and its application. To prevent distortion of competition in business with other European countries, Belgium has strengthened its legislation which prohibits agreements, decisions or practices that restrict competition, such as the requirement of using fixed prices, limiting or controlling production, markets or developments in the investment market sharing or sources of supply.

Question 22. Where does the support for internationalization and business development in Belgium comes from?

There are structures for bilateral promoting realized with the support of BRUSSELS BPCE, the representative organizations of the Romania-Belgium Business Club (www.caromb.eu), which includes representatives of associative structures BPCE and Belgian and Romanian Brussels, as well as Belgian institutions and companies interested in the development of trade and economic ties.

Also, the support will come from the Government of Flanders through the Cooperation Agreement between the Government of Romania and the Government of Flanders, economically applied, but also from the Romanian Embassy in Brussels, the National Union of County Councils of Romania – European Office in Brussels, the Federal Service of Public Economy, Small and Medium Enterprises, the middle class and Energy Agency Flemish export promotion and foreign investments (FIT), Brussels Export (foreign Trade Department of the Ministry of Community Brussels-Capital), Brussels Enterprises Commerce & Industry and Valona Agency of export promotion and foreign investment (AWEX), the Federation of Chambers of Commerce and Industry of Belgium (Brussels), FEV, Fédération de l'alimentaire industry, especially from customers, consumers of high-quality wines.

Question 23. Are European funds a lifeline for the industry and thus, for Recas company?

European money would be good, but heavy bureaucracy is killing us. Compared to similar cases in other countries, our bureaucracy is 100 times greater.

CHAPTER IV. EMPIRICAL ANALYSIS

4.1 Presenting the country of internationalization

GENERAL FRAMEWORK

Belgium is bordered on the north with the Netherlands and the North Sea, on the east with Germany and on the south with Luxembourg and France, with which it forms the Benelux. It has a land area of 30,528 km², to which are added 3,462 km² of sea surface in the North Sea. The land surface is divided into two distinct parts:

The western and central part of the country consists of low-lying plain lands (with fertile valleys and waterways) which corresponds largely to the Flemish cultural area.

In the southern Walloon territory is the area of the Ardennes, with an altitude that reaches 600 meters.

In the Ardennes is the highest point of the Belgian geography, the "Signal de Botrange", with 694 meters of height.

SITUATION, SURFACE, AGRICULTURAL SURFACE, RELIEVE AND CLIMATE

The climate is cool, humid and cloudy skies throughout the year. The average annual rainfall is 800mm. According to the Royal Meteorological Institute of Belgium, the number of days with precipitations is around 200. December and January show the highest rainfall, although in 2014 and 2015 the summer period has been especially rainy. Thanks to its geographical position, the capacity of its ports and an extensive network of communication routes Belgium has become an important European logistics center, where a large volume of goods travels. At the same time, and despite the fact that the secondary sector has lost weight in recent years Belgium is still a major industrial pole. In the coal basin of the Sambre and the Meuse heavy industry is installed and in Flanders the textile and chemical industry.

DEMOGRAPHY AND SOCIETY

As of January 1, 2016, it is estimated that there are a total of 11,209,044 inhabitants registered in Belgium. Belgium is the fifth smallest country in the European Union; But occupies, with more than 355 inhabitants per km.², the third place in population density, behind the Netherlands and Malta. It consists of three regions: Flanders, Wallonia and Brussels-Capital. Wallonia occupies 55.2% of the total Belgian territory, while Flanders represents 44.3%. However, population density is more than double in the Flemish region (462 inhab./Km.²), than in the Walloon (208 inhab./Km.²). In the south of the country, the population is French-speaking Walloon (32% of the population). In the north, the Flemish population is Dutch-speaking (58%). The region of Brussels Capital is bilingual by law, mainly Francophone, and represents 10% of the population. In a small part of the country, in the Eupen region, German is spoken (0.7%). The foreign population accounts for about 10% of the total population, the majority being of Italian, French, Dutch, Moroccan, Spanish, Turkish and German origin.

Urban population and main cities

The level of urbanization of the population of Belgium reaches 97% of the total. The Region of Flanders has a larger number of inhabitants (6.38 million) and population density than the Walloon Region (3.56 million). Brussels has a little more than one million inhabitants and is undoubtedly the one with the highest population density, since the region covers almost exclusively urbanized areas.

The main cities and their population are: Brussels (region): 1.147.043 inhabitants, Antwerp: 506.091 inhabitants, Ghent: 247.942 inhabitants, Charleroi: 203.072 inhabitants, Liège: 195,302 inhabitants, Bruges: 117,583 inhabitants and Namur: 110,355 hab.

GDP PER CAPITA AND DISTRIBUTION OF INCOME

GDP PER CAPITA

According to Eurostat data, the GDP per capita in Belgium in 2014 amounted to 35,900 euros.

ACTIVE POPULATION AND UNEMPLOYMENT

In 2014, the labor force in Belgium dropped slightly to 4.96 million people. The harmonized unemployment rate has been increasing since the end of 2012, when it was at 8.1%, registering a value of 8.5% in 2014. In any case, it is a below-average rate Of the euro zone (11.6%). For 2015 and 2016 the European Commission foresees a gradual improvement until returning to the 8% level. Eurostat warns that, given the composition of the labor market in Belgium, there is a risk that many of the current unemployed will become long-term unemployed.

DISTRIBUTION CHANNELS. STRUCTURE AND LEGAL FRAMEWORK OF COMMERCIAL DISTRIBUTION

STRUCTURE

In the wholesale trade of the food sector, there are three main groups: Colruyt (27% market share), Carrefour Group (22.6% market share) and Delhaize Group (22.5% market share). According to the consultant AC Nielsen, 51.9% of sales in Belgium are made through large areas, such as Carrefour, Super GB, Colruyt, Delhaize, Cora, Match and Champion. The 27.4% is made in medium-sized stores, around 833m2, such as Proxy Delhaize or Carrefour Express. 5.7% in small stores and the remaining 15% in stores of "Hard Discount" type such as Lidl or Aldi.

At the same time, one in three companies in Belgium work in the distribution sector, with retailing being the most atomized. According to the Belgian Federation of Distribution Enterprises (Commodities) in March 2015 there were in Belgium a total of 83,484 points of sale, of which 19,201 belong to some type of chain of stores.

LEGAL FRAMEWORK

The law of 13 August 2004 on the authorization of commercial establishments in Belgium, also called the "Ikea" law, regulates commercial establishments. In order to establish a commercial establishment in Belgium requires the authorization of the city council, and if the establishment exceeds 2,000 m2, it is also necessary the authorization of the neighboring municipalities. This legislation was amended by law of 22 December 2009 to bring it into line with Directive 2006/123/ EU on services in the internal market, which seeks to simplify procedures and procedures for access to and exercise of a service activity and a system of administrative cooperation between the competent authorities of the Member States.

ECONOMIC IMPORTANCE OF THE COUNTRY IN THE REGION

Belgium forms together with Luxembourg and the Netherlands the Benelux, trio of member countries of the European Union since its inception. At present, most of its trade and institutional relations are developed with neighboring countries: the Netherlands, Germany and France are Belgium's main trading partners. Although it has a smaller economic weight than the countries it is surrounded by, Belgium occupies a fundamental space as a place of entry for many goods to Europe, or as a "test market" for many products that can later be introduced into larger markets. In addition, the political importance of Brussels as EU capital, and home to numerous international companies, reinforces its weight in the continent.

BUSINESS OPPORTUNITIES

In Belgium there is freedom to establish companies and transfer capital. Any foreign investor wishing to establish himself in Belgium can do so without prior authorization, except for certain types of business such as banks, insurance companies and transport companies. There are no restrictions on entry of foreign capital into Belgium, and benefits can be repatriated without limit. The rights and obligations of companies are defined in the Law of 7th of May, 1999.

As regards the presentation of financial statements, balance sheet, income statement and report, which was established by the law of July 17, 1975 and the Law of May 7, 1999 on the Company Code, it is mandatory to carry it out before the Central Balance Sheet of the National Bank of Belgium.

The accounting regulations include two exceptions to the presentation:

The minimum content of the accounting plan.

The ability to keep their accounts in currencies other than the euro.

The company regulations contemplate the following exceptions:

The form and content of the financial statements (for example, the statement of turnover in the complete format) and the consolidated accounts;

Preparation and publication of accounts in a currency other than the euro;

Adaptations of the annual and consolidated accounts by line of business or economic sectors

The main reason for not having to comply with the obligations set forth in the Accounting Law is competition. In most cases, these are markets in which the publication of the required data could lead to unsustainable competition situations, mainly because there are companies focused on a single product and others that have diversified productions .

IMPORT (FOREIGN TRADE REGIME)

PROCESSING OF IMPORTS:

Belgium, as an EU member country, has no trade restriction with the rest of the EU countries. In contrast to third countries it applies the common commercial policy, both conventional and autonomous.

CUSTOMS TARIFFS AND ECONOMIC REGIMES:

The introduction of goods originating in other Community countries or in free circulation is exempt from the payment of tariffs. Those from third countries are subject to Common Foreign Tariff duties and to the common customs and trade regime.

STANDARDS AND TECHNICAL REQUIREMENTS:

  There are some difficulties to enter the Belgian market such as:

• Translation in French and Dutch of labeling and packaging.

• Need in most cases of two Belgian distributors, one for the French speaking area, and one for the Flemish.

• In the case of unpaid invoices as a consequence of companies in suspension of payments and in bankruptcies, it is necessary to translate all necessary documentation to communicate with the administration in the language where the company has its headquarters.

Within the EU, the current trend of technical and legal harmonization sets the tone for product entries in Belgium. However, the "Open Line" policy may encounter certain obstacles in sectors such as the automobile industry, especially with regard to the importation of second-hand vehicles.

FOREIGN INVESTMENTS

Belgium proposes various tax measures favorable to companies. In addition, both federal and regional authorities are willing to advise and accompany foreign investors. Within the Federal Public Finance Service, the Foreign Investment Taxation Unit, informs and assists in the tax area, free of charge and confidential, the candidates and foreign investors already installed in Belgium. The Belgian Government has introduced tax incentives and measures with the aim of increasing Belgium's attractiveness as an investment destination. It is worth noting the two main mechanisms employed by Belgium to attract business investment, which has placed it among the main FDI recipient countries.

The first is the system of deduction of notional interest which allows the parent companies to deduct a calculated amount of own funds from their subsidiaries at an interest rate determined each year by the Government on the basis of a ten-year bond rate of interest. The rate applicable for accounting years 2014 and 2015 has been 2.63% for large companies and 3.13% for SMEs. The system of notional interests works as follows: imagine a company that lends 100,000 euros to another company in the same group. The lending company receives a 4% or 4,000 euro operating profit, which is the rate at which it lends money and which in turn represents its tax base. In the absence of the notional interest deduction, the tax would have been 1,360 euros (33,99% x4,000 €). However, by applying the deduction of notional interest (3.13% for fiscal year 2015, ie a deduction of € 3,130), the final amount payable for tax is € 295 (33.99% x4,000 € – 3,130 €). This is equivalent to an effective rate of 8.5%.

The introduction of notional interests as a fiscal measure pursues a threefold objective: to provide incentives to attract foreign firms' headquarters in Belgium, to strengthen the capital base of enterprises by reducing their tax burden and to provide an alternative to the abolition of coordination centers , most transferred to Switzerland, after being banned by the European Commission as of 2010.

Since the entry into operation of the notional interests several international groups have been established in Belgium, establishing their treasury center in the country. These centers act as internal banks of the group, moving large sums of money and benefiting, therefore, of the fiscal advantages derived from the discount of the notional interest.

2. The second measure that Belgium promotes among its foreign investors is the "fiscal ruling". This system allows a potential foreign investor to obtain guarantees from the Belgian tax authorities on the tax regime that will be applied to them. The (potential) investor thus obtains legal certainty of initiation as regards the fiscal treatment of his investment in Belgium. The European Commission has recently challenged this mechanism.

Likewise, the tax system allows the accumulation of fiscal losses from previous fiscal years without a time limit. Deductions are also made for investments in fixed assets that are destined for a commercial purpose in Belgium.

REPATRIATION OF CAPITAL / CONTROL OF CHANGES

Since Belgium belongs to the euro area, there are no obstacles to the repatriation of capital or exchange rate risk provided that the operations are denominated in euros.

INCENTIVES TO INVESTMENT

In Belgium, all companies are subject to corporation tax. The nominal rate for corporation tax is 33.99%. For small and medium-sized enterprises with a taxable profit of less than 322,500 euros, the rate is limited to 24.98%. There are legal mechanisms that could reduce this nominal rate.

The main fiscal incentives, in addition to the deduction of notional interest and the tax ruling, are:

Exemption from the tax on certain dividends: The exemption from the tax on certain dividends may also be of interest to investors. This new exemption extends the European parent-subsidiary directive between Member States of the European Union and Switzerland to all areas with which Belgium has signed a double taxation agreement, such as Hong Kong and the United States. When choosing Belgium as the seat of its holding company in Europe, corporate investors in the countries bound by the agreement can repatriate European profits without paying dividend tax and without profit limits.

Reduced wage costs: The Belgian tax system also offers reduced wage costs for employers hiring middle managers or foreign researchers. The relocation to Belgium of expatriate workers implies a supplement of expenses for the employers, the company or the competent moral person. Thanks to this measure, the employer does not pay taxes on the total remuneration of these foreign professionals. A substantial exemption is also granted in respect of the professional tax payment of investigators.

R & D: There are several fiscal measures for the R & D sector: Partial exemption from the payment of professional tax for researchers, Exoneration of tax on premiums, as well as on capital and interest subsidies, granted by regional authorities to assist Research and development in business, Tax deduction for patent income, Belgium offers a deduction of income from patents that reaches 80% of income. Increase in investment deduction, Tax credit for research and development.

The main body of information is the Federal Public Service of Economy, its role is to encourage foreign investment in Belgium, inform and facilitate the own management of the investment.

BRANCHES OF FOREIGN COMPANIES

Any foreign company can freely open a branch in Belgium. Branches are subject to the same rules as Belgian companies in terms of management. A branch is defined as the opening of a branch in Belgium where a foreign company carries out operations in the country and by means of which a representative is empowered to engage the undertaking with third parties. As regards the opening formalities, branches must register in the Commercial Court: Constitutive act and / or statutes, name and legal form, name, address and activities that the branch will carry out in Belgium, the position and the identity of the persons who May bind the company against third parties in Belgium, the annual accounts and consolidated accounts of the company closed last year. In addition, each year they must be published in the month following their approval and at most 7 months after the end of the year. These documents must be made public before the National Bank of Belgium.

4.2 REASONS FOR CHOOSING BELGIUM AS AN INTEREST COUNTRY

Given the complicated economic situation in Europe, Latin America and China are constantly playing as priority markets for investment. But what if there were more opportunities on the Old Continent than we thought? Countries around Romania were, are and will be the main destination countries of Romania products, we have a related culture and a tradition of commercial and social relations. So, could this approach be considered?

An undisputed reference so far has been Belgium, the geographical and institutional center of Europe and, according to the Managing Director of Recaș Winery, who participated in the ”Develop your business in Belgium, a profitable alternative”. In fact, the Recaș Winery presence in Belgian lands will grows every day, both business and professional, and annual exports will be in continuous growth. "The trade balance is still bending towards imports, but we are evolving very positively."

Belgium is a fundamental market for companies that want to expand in Europe, despite the crisis, its economy continues to grow: in 2017, it will grow with 0.4%, and in 2018, with 1.3%. Also, the average price of square meter office rent in Brussels is 200 euros, compared to 800 Paris and 1,300 London.

According to the World Bank, Belgium is the European Union country where a company can be established more quickly, although it recommends to the Romanian SMEs to analyze which zone of the country is best adapted to their business. "If the company is looking for space, logistics or storage, it is best to go south, to the Walloon region; While if you need to be close to the European institutions or are engineering, you must settle in Brussels. "

Another factor to take into account, also related to the area chosen to carry out the internationalization, is the language. Local companies in Belgium require documentation to be translated into their language. For that reason, it is advisable to take into account that to the south the official language is the French, whereas in the north of the country, the Dutch language is used. The capital, Brussels, is a bilingual area and there are used both languages. Also, Belgium argues for tax cuts to attract foreign investments. 

To convince Romanian businessmen that Belgium is an attractive market for investment, De Decker lists a number of reasons and government aid to promote economic activity and employment within the European country.

1. Tax incentives for small and medium-sized enterprises

To be considered an SME in Belgium and enjoy the most incentives, Recaș Winery met all these criteria:

– Maximum of 50 workers.

– Turnover of 7,300,000 euros per year.

– A total balance lower than 3,650,000 euros

In addition, Recaș Winery have the following advantages:

– Tax exemption of 50% of the profit, up to 18,750 euros, provided the company undertakes to reinvest this amount within a period of three years.

– Deduction of the benefit for 22.5% of investments made in aspects related to protection, such as the installation of alarm.

– Exemption of € 11,000 from the benefit for each new employee hired

 2. Belgium has Double Taxation Agreements (CDIs) with numerous countries, including Romania

Belgium has signed double taxation agreements with more than 70 countries, including Romania.

3. Very attractive holding regime

The Belgian Government provides for exemption from the dividend income tax of a Belgian subsidiary, to its parent company, provided that the parent company has a holding of at least 10% over an uninterrupted period of at least one year.

4. Deductions of notional interests

'Notional interest deductions' is a unique measure in the world that is applied in Belgium and consists of a tax deduction that allows to reduce the tax discrimination between financing with third-party capital and that of own funds.

Thanks to this system, Recaș Winery will be able t deduct 'fictitious interests' from its tax base.

5. Tax Shelter

This is a tax system for companies that (indirectly) invest in the production of an audiovisual work can benefit from a tax exemption on taxable profits, up to 150% of the capital invested.

6. Exemption for the creation of new employment

For Recaș Winery:

– Exemption of 5,260 euros of the benefit per new employee hired

– Exemption of the benefit for 20% of the payrolls paid to young workers who practice in the company and, in addition, the company is entitled to a subsidy.

7. Favorable system for expatriate workers

The Belgian system also offers very attractive conditions for expatriate workers or administrators to Belgium.

– Non-resident status.

– Exoneration of the payment of expenses for change of address.

– Exoneration of foreign remuneration.

Business Internationalization Plan 2016-2018 of Recas Winery

Principles of the Plan

The Business Internationalization Plan 2016-2018 considers a series of principles on which the Recas Winery company actions:

Action and results in the short and medium term: On the one hand, and immediately, to counteract the effects of the economic crisis on Recas Winery company and, on the other hand, to strengthen the competitiveness of its economic fabric in the medium term as a fundamental, permanent and sustainable improvement

Betting on the productive industry: Recas Winery wants to support its evolution towards a more advanced, efficient, sustainable manufacturing that incorporates new technologies and materials, but also innovation in design, commercialization, business models or management systems

Transversal economic perspective: The sector under this plan is conceived from a business perspective, generating wealth, employment and well-being, not forgetting the positive externalities it generates in terms of territorial development, strengthening the identity and so on. Today, the economic activity is not understood without an interaction with the territory and society.

Focusing efforts: The need to increase efficiency in the use of resources and their limitation in the context of the economic situation and company’s own dimension as a country imposes, leads to the conviction of the need to focus policies and actions wherever the impact can permanently generate and evaluate such effects, acting accordingly. This focus is translated for example in the commitment to innovative projects, capable of generating employment and differential offers.

Impulse of complete chains of activity: In line with the above, the Government's policies aim at strengthening complete chains of an economic activity (researching the market), not forgetting the relations between different connections or between different strings. The company wants to move definitively towards a new stage of clustering the interrelated value chains that shape its economic activity, observing the industries in the integrity of their value chains and surpassing the classic sectoral approach.

Policy Segmentation: Recas Winery wants to design policies and ad-hoc solutions, adapted to each company or group of companies with similar characteristics, considering the stage of evolution and maturation, the size, the activity in which it operates. The plan proposes, in collaboration with other agents of the economic promotion system, to advance in the segmentation of both policies and in the attention to companies.

Central participation of people: People are the fundamental asset of the company. The Plan wishes to support processes to reinforce the participation of workers in Recas Winery organization as a mechanism for improving competitiveness, generating long-term shared projects that tend to favor the growth of people and spaces for professional and personal development.

Multi-agent collaboration: Inter-institutional collaboration and public-private collaboration are ways to continue to reach the goals proposed, reinventing some of the traditional formulas that show certain symptoms of exhaustion. Recas Winery wants to lead these lines of cooperation, which allow a better alignment of objectives and a more efficient use of resources.

Territorial balance: Belgium, as well as Romania, are balanced territories, representing one of the greatest strengths of Recas Winery.

Objectives of the Plan

The main objective of the Business Internationalization Plan 2016-2018 is to promote the insertion and international competitiveness of the Recas Winery company, in the global market, establishing a support framework adapted to its capacities and needs in the context of the current crisis, boosting the degree of openness and internationalization of Romanian economy, enhancing and consolidating foreign trade, contributing to the increase of Romanian implementations abroad and attracting foreign investment towards Belgium. In addition, the 2016- 2018 Entrepreneurial Internationalization Plan promotes a combination of smart internationalization reinforcement policies that act as a lever for competitiveness and strengthening of Recas Winery business, diversification of sectors, markets and risks, as well as the reinforcement of value-added employment.

Strategic axes and lines of action

Recas Winery has a limited capacity to influence the processes of its international insertion, it aims to strengthen its competitive position in the international arena. In order to reach the objectives set, the company defined a series of strategic axes of priority action in the Business Internationalization Plan 2014-2016. These axes are represented by:

Consolidation and promotion of the system to support external activity

Differentiated support for its access to international markets

Support in order to reinforce the international positioning of winery’s goods and services abroad

Generation and dynamization of human capital to undertake international markets, especially in Belgium

Capturing and consolidating strategic investments in Belgium

International and multilateral financing and cooperation

Company’s policies

Commercial and marketing policy

Increasing the variety and quality;

Existing customer loyalty;

Attract new customers within existing markets and within new markets;

Rates competitive with competition;

Development of distribution channels (for example Giving discounts to customers (commission) according to the quantities of products purchased by customers recommended by them)

Motivate customers by offering discounts depending on the time of payment.

Improving market image and communication with customers (advertising, promotion)

B. Financial policy

Securing the necessary funding operating activity of the company and the necessary funds at the peak of its development;

Ensuring all necessary funds from its own resources only, not loans;

Ensuring profitability of operations;

Providing monthly reimbursement rates stipulated in the approvals of rescheduling of outstanding debts to the budget and other funds;

Enhancing equity by making profit during the entire financial year;

Decreasing the recovery period of receivables;

Stringent control of costs;

Initiating a management of budgets – estimations of departmental budgets, their centralization into a budget throughout BU (business unit site) and analyzing expenses and income, finding solutions to increase revenue and decreasing costs

C. Production policy

Efficient use of existing resources;

Ensuring a constant level of quality of services in time;

Increased operating rates for categories of products for which this constitutes a basic criterion in the choice of supplier;

Stringent control of operating expenses through increased mechanization and review of operating rules to maintain tariffs at a competitive level;

Improving the quality of working;

Development of new services (resulting from market investigation).

D. Investment Policy

To reinforce its leading position in the market of wine producers in Romania, Recas Winery develops an investment policy based development of various projects.

E. Human resources policy

Appointment of experienced personnel, with initiative, being able to assume responsibility for work execution;

Reduced average age of attracting new employees, planning annual needs of people, depending on the production plan, and then monthly plans for recruitment and selection for changes.

4.3 Internationalization methods – strategies

Business model

Recas Winery’s business model is characterized by flexibility and adaptability, which has allowed the company to respond faster to the needs of the market, as well as being less sensitive to the lower part of the business cycle than other more rigid models. This flexibility is guaranteed by the strong vertical integration of the company. Recas Winery is one of the few in the beverage sector that, instead of making two collections a year, can constantly renew the designs and tastes of the collection according to the demands of the public. In this way, it could be said that the company produces and distributes what the market demands. The idea is to flee stock accumulation getting a constant supply of beverage with good prices and quality. This process involves qualified employees, managers, buyers of raw materials, manufacturers, logistics specialists, suppliers, all of them being under the conception that the cost budget is prior determined to the launch and marketing of a product, so one can talk about a process determined by prices and not the other way around.

Within this scheme the store has a special relevance: it is the meeting place with the customer, a constant source of information for the whole organization and the main advertising tool.

Different internationalization strategies

One can point out three main strategies with which Recas Winery faces the development of its different commercial formats in a new market: its own implementation, the maintenance of joint ventures and the export.

Own implementation

The vertical model of the company is sufficiently developed to favor the management of the sales. This is the most common model used by Recas Winery in the management of its business formula. This system is used in most cases, so other formulas are only taken in those markets where the legal or other imperatives of the country or its characteristics make it advisable to adopt a different model of management.

Joint ventures

Sustained joint ventures agreements with local partners are only adopted in countries where characteristics from a business point of view – such as the real estate market or the specifics of the distribution activity – recommend counting on the advantages derived from counting with partners who provide prior knowledge.

The joint ventures of Recas Winery has made it possible to take advantage of the experience of the group in the beverage sector, as well as its knowledge of the particular conditions of one of the most important markets in Europe. Thanks to this, the expansion on the Belgian market is expected to be very fast and since the first opening, the company will establish many sales points in the main Belgian cities.

Formation of "joint-ventures".

Sometimes it is in the interests of the foreign investor to establish himself by buying an existing company or merging with it, or to set up a joint venture with a Belgian company. Joint ventures or mergers do not require prior authorization. For a public acquisition or offer to purchase, the person or company making the offer must record the details in the SFMA (Service and Financial Markets Authority) 15 days before the offer. Authorization from the Ministry of Finance is required to make an offer of acquisition or change when they do:

National subjects of a member state of the European Union.

Corporations, public or private, which are not established under the laws of one of the Community countries

Public or private corporations duly established under the laws of one of these countries, but which do not have their administration or principal place of business within the European Union.

As the procurement procedure is carried out by the Banking Commission, it is advisable to inform the Commission, from the outset, of any such project, so that it can indicate the most advisable procedure. In addition, the Corporate Governance, based on the Law in March 2, 1989, requires the Banking Commission (CBFA) to be informed when more than 5% of the shares of a company are acquired or when the number of shares is increased by more than 5% . The law establishes rules for public offers in order to promote the efficiency and transparency of the market. At the same time, according to the current legislation, it is necessary to inform the Ministry of Finance and the national and regional Ministries of Economy, before carrying out any operation whose purpose is to ensure the transfer of more than a third of the capital of any company that operates in national territory and whose participation counts at least 2,500,000 euros.

Franchise concession

In some cases of cultural differences, the risks associated with economic activity in certain countries or the size of the market itself, discourage direct investment by the group. The flexibility with which our chains respond to the imperatives of the different markets means that the adaptation to the franchise model can be assumed. This type of agreement is made with a single partner for the whole country, partner who must be a large national group with a consolidated tradition and experience in fashion distribution. In addition to these aspects, another of the key requirements is the necessary availability of human, technical, financial and infrastructural resources that allow the development of Recas Winery business model by the franchisee in a fast and efficient way. The franchise model assumed by the Recas Winery presents some basic differences with the traditional one as soon as the integration takes place in the system of supply, order and distribution from the logistics centers of the different chains and in the possibility that the franchisees of return merchandise during the season. Under this model, the franchisee is responsible for the investment in fixed assets and for hiring personnel for its management. As compensation, the geographical exclusivity of the franchise is granted, so that there can not be another franchisee in the same area, although Recas Winery reserves the right to open new stores in the same place under its own implementation.

Export

Export is the simplest and most traditional method of starting the internationalization Recas Winery. Production is maintained in the place of origin from where the markets are supplied and the product can undergo some modification if any of the markets requires it. If Recas Winery has no means to manufacture abroad, if the foreign Belgian market is very attractive, the least risky option is export. Thus, the export involves the sale of a product of Recas Winery in a territory other than the national one, with the inherent complication of border crossing, customs procedures and the difference of currencies, languages, legislation and economic and commercial environment.

Export is carried out directly or actively: Recas Winery comes in contact with intermediaries or final buyers abroad and takes care of all the bureaucratic, logistical and financial aspects that an export entails. To implement this strategy, the company's commercial department will hire foreign trade experts with experience in international contacts and when export activities take on a certain volume, export departments will be created.

Strategic alliances, partnerships, acquisitions, expansions were made through Recas Winery as for an influential company in the market. In this respect, it would have competitive advantages to its competitors in terms of distribution, technology, costs and innovation.

4.4 Conclusions

The phenomenon of the globalization of the markets and therefore ,of the internationalization of the companies, turns out to be an event from which we can not escape neither as organizations nor as consumers, which only leaves us the alternative route of reflection, that in terms of country, invites us to think about the tempting possibility of having a greater number of companies that market their products abroad, becoming increasingly productive and competitive organizations that contribute to the economic and social benefit of the nation.

Although internationalizing a company is not an easy process, it can be too risky and complex; this type of effort is often highly rewarded especially when organizations first focus on finding information and prior knowledge of the needs and expectations of buyers in the new target markets.

Benjamin Franklin said: "Investing in knowledge always produces the best interests", which interpreted from the field of business could be translated into the fact that there are the research and market intelligence as the best investments that can be made by a company, since information is the raw material of ideas and business, as well as the only tool that helps to clearly define which goals are achievable when designing internationalization processes.

Companies that have already started and developed internationalization processes today convey valuable lessons in terms of leadership, quality and innovation, thus demonstrating that success does not depend on the size of the company or on the amount of financial available resources, but on a selection of appropriate strategies in a timely manner. Therefore, in order for Romania to begin to expand its trade frontiers, it is necessary for both businessmen and employees to broaden their minds, and work together in order to create a true export culture that benefits the country and all of consumers and companies.

As a conclusion, one may observe the main causes that lead to the internationalization of Recas Winery. From a more strictly business level, the most important causes that motivate Recas Winery to enter and stay in foreign markets are the following ones:

Saturation of the domestic market of the country of origin. In general, in the Western countries, there are markets for certain products that are becoming saturated, some of them already have reached that state. Mainly, the low population growth rate suggests that demand will not grow at the desired rate, so many companies in many industries are looking for new markets for their products.

2. Confronting new markets from abroad.

3. Search for less competitive markets or at a different stage of the product and / or service life cycle. This is the case of a product that in its country of origin has reached the stage of maturity, faces many competitors and the market growth rate is very low, for example a certain product of Recas Winery. In this situation, it is convenient to export to other countries where the product is not yet well known.

4. Appearance of new markets that are very attractive. Belgium has gradually become an area with a strong push both on the supply side and the demand side. However, international traders must be cautious, as some nations are modernizing themselves not by "westernizing", but by buying goods and services from the West, even if they are not buying values ​​and culture.

5. Government incentives and trade deficit. Currently, there are numerous countries with a high trade deficit which forces their governments to encourage exports in order to obtain foreign exchange to buy or that the country needs and that is not inside. This is the case of Belgium whose export rate is more than 80% of what is produced in the interior of the country.

6. Search for broader markets on which to take advantage of scale economies. A significant number of industries, even the wine producing one, are undergoing profound changes in all their structures, as a consequence, above all, of technological advances.

This causes changes in the optimal size dimension of Recas winery, that needs to find more buyers for its products, in order to reach the minimum efficient size and find the possibility of distributing different costs on a larger basis.

7. Diversification of operating risk in the same market. It is possible that Romania, as country of origin, may be exposed to various economic, political, financial, demographic circumstances. That promotes the need of Recas Winery to internationalize. It is a way of not concentrating the success of the company in a single country, whose progress could succumb to it.

8. Follow-up an important client in his international adventure. For Recas Winery, the decision to become international may happen when one of its key clients decides to enter foreign markets.

9. Search for easy access to technological advances and raw materials. When labor is a significant proportion of costs, it seeks to expand operations where the labor force is cheaper. For Recas Winery, this option is of short duration because each time the labor has less importance on the total costs of production.

10. International vocation of company’s managers.

CHPATER V. DISCUSSION AND CONCLUSION

The international structure of the world wine sector, which has been shaped during the last three decades as a consequence of the changes affecting the whole economy and the tensions generated by the existence of different modes of production and regulation, Now subject to the influence of new factors of change that appear associated to the global economic crisis. In this set of factors it is possible to distinguish between those that have to do with the institutional dispositions that determine the mode of regulation of the sector and those derived from its economic operation. Among the first have been identified: the cessation of trade liberalization and market access in WTO negotiations, opposition to the disappearance of planting rights in the EU, exchange rate behavior, Excise taxes on wine consumption and greater regulation of alcohol consumption.

In a market as competitive as expected in the coming years, less regulated in terms of control of productive potential and intervention in the market, but more subject to institutional dispositions that condition and guide consumption, it seems logical to think more than The imposition of some strategies on others, in the coexistence that allows the diversity that has always characterized this sector and which is manifested in: different types of wines (without and with PGI), formats (bulk, bottling, Large, medium and small) and trade orientations (towards the internal market and towards internationalization). And this seems to be what is happening in view of some changes that have been observed in the market since the beginning of the crisis.

In the complex global environment in which companies are currently developing, international business management enables behaviors and actions that, practically, specify each organization, making its characterization more complex and generating a very high degree of heterogeneity among international companies. From this perspective, we have tried to solve certain problems of ambiguity that are generated in the conceptual delimitation of the internationalization of the company as a strategy and of the multinational company as an organizational entity. This problem of indefinition is mainly explained by the high degree of heterogeneity intrinsic to these concepts.

In the case of the company internationalization, the consideration of multiple references and authors that cover practically the whole theoretical framework with its different perspectives and different approaches has allowed us to establish a broad definition, which has as main advantage the multidimensional consideration of the concept, from the main components highlighted by notable authors.

In many cases companies are competing in environments in which differentiating the product is very complicated, as is the case of the agri-food sector. But being complicated does not mean that it is impossible. Much more if we consider that the company can introduce innovative factors in aspects of the external product, such as packaging. And I'm not just referring to designing an attractive container with a breakthrough image, but to think about the use that consumers will make of their product and facilitate it.

This is the case of the Romanian company Recas Winery. It is not that it sells a great wine, but its competitive advantage lies in the way it maintain the loyality of its customers. It is not always possible to innovate in the product (in this case the wine), but to introduce modifications and adaptations in its packaging to adjust its consumption to the habits of use of our customers can mean that we differentiate clearly with respect to the competition and get into those target markets.

CHAPTER VI. IMPLICATIONS

Implications for Theory and Practice

From the results, the implications for the exploitation of social capital in the internationalization process of Wine Businesses is summarized below. The findings contribute to social capital research in several ways. The results show that the structure of the network of the entrepreneur has impact on the internationalization strategy adoption intention. Analysis from the start of the company’s international operations indicates that the knowledge inputs are internal and originate solely from the personality and motivation of the entrepreneur. What are implications on internationalisation of Wine Businesses? This article has demonstrated that the concept of network competence has impact to the internationalization process of the Wine Business. It could be shown that management competence and technology competence are or high impact on the decision to start international activities but also network competence as a personal capability of the small business owner. The focus on the network competence as a personal capability presents a shift in the network research – not the quantity of contacts which the owner has was analysed but the personal ability to get resources from these contacts – with impact to the organisational and international development of the company.

Directions for future research

Given that SMEs account for a large proportion of the total businesses in many countries, including Belgium, the findings provide a staring point for potential public policy framing and targeting of support. This study supports the findings in the literature of family firms that not all family firms are the same. The firm with international activities is a creator of economic growth with further potential. Therefore support should be targeted to product innovations and export financing. The firm without international activities may refuse to accept governmental support as it would infringe the individual decision level of the owner.

This paper indicates that not all wine businesses tend to pursue international activities. Although both the firms exhibited continuous innovation, the in-depth analysis proves that mostly the firms with established strong relations to strategic partners and the staff possess a clearly defined internationalization strategy. The quantitative analysis used in this study highlights that the international marketing activities were not limited to product innovations and they were based on strategic decisions in the pre-export phase to achieve product differentiation. This is in sharp contrast to the firm with no international activities that had non-technological innovations in managerial practices and administration.

The above implications cannot be generalized, as a major limitation of this paper is that it is based on findings from wine businesses located in Belgium. Nevertheless, the small size and geographic position of the country in Europe seems favourable enough for general assumptions about the internationalization process of wine business companies. Therefore, further studies should include other countries, survey a larger population and extend the study to cross-national comparisons to understand the role of social capital in the internationalization process of wine businesses more completely. The integrated and multidimensional perspective of social capital, studied within the context of a wine business firm’s strategic decision to internationalize has provided meaningful conclusions and implications on the structure and support of relations, useful for future theoretical discussions about network exploitation and practical applications.

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