Discuss the rationale for the strategic changes that Fike Europe went through as the company progressed through various stages of internationalization.

Question

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Answer 1

The Fike Europe case provides a classic example of how business firms go through various stages of internationalization as portrayed in international marketing literature. As reported in the case, Fike initially started exporting to European countries in the 1960s through an export management company in Philadelphia, which had import agents in various European countries. From such indirect export marketing, the company progressed through various stages of internationalization, culminating in direct investment in European manufacturing and marketing by the company. Given the highly technical nature of the company’s industrial product line, which would require both pre-sale advice and post-sale services, indirect distribution methods involving dependence on import agents and country distributors proved to be inadequate for expanding into the overseas markets. This is especially so if the company offered better-quality products and service to the target customers. The attention given to the company’s product lines by the import agents and distributors, as experienced by Fike in Europe, is neither adequate nor satisfactory in highly competitive markets. This progressively led to greater involvement by Fike, first in marketing its product lines and second in directly manufacturing its products in Europe so that the company could better serve its customers.