ITEC going international

Abstract

By 2005, ITec had 51 employees and was on track to make 2$ million in sales for the year with a firm projected forecast for the coming years. ITec margin were on average, 30 percent of sales. The company was well established in Lebanon and had some customers in the Gulf region. ITec main business was ERP Implementation, business consultancy, process reengineering and project management. This type of business is Human capital intensive; resources and experience were the main assets. The company's yearlong development effort has been extremely successful and growth was more than expected. By the end of 2005, everything has changed; a series of assassinations invaded the country followed by a devastating war with Israel and daily demonstrations to overthrow the government. This crisis had direct impact on the Lebanese economy, already burdened by a gigantic public debt amounting to180 per cent of gross domestic product. This situation slowed our pace and forced the company to expand to a new geographic location. This case poses a set of questions that needs to be prepared and answered before deciding to go abroad. Questions include Model to adapt, company Readiness, market and channel issues, Intellectual property, product and localization. In the study it was concluded that ITec should expand to a nearby geographic location adapting the Uppsala-model during the expansion and following a number of steps in the Establishment Chain. The choice of the country to enter was based on the Market potential and the rate of psychic distance. The main findings and the observed patterns were identified during the study based on real case scenarios. Mode of entry, Resources committed, Network and Channel and the risk factors faced during the Internationalization process.