The Eclectic Paradigm: What Are The Reasons For Internationalization?

1. High pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy: A. global B. multidomestic C. transnational D. overall cost leadership 2. Foreign direct investment includes the following form of entry strategy: A. licensing B. franchising C. joint ventures D. exporting 3. According to Michael Porter, firms that have experienced intense domestic competition are A. unlikely to have the time or resources to compete abroad. B. most likely to design strategies aimed primarily at the domestic market. C. more likely to design strategies and structures that allow them to successfully compete abroad. D. more likely to demand protection from their governments.

produce products and sold to multi country. The primary purpose of business internationalise is seek a wider range of competitive advantages and integrate resource in order to profits maximization. The Internationalization motives include three

Once a firm determines its corporate level strategy, it must decide on its business level strategy. An international firm must decide on only what business level strategy it wants in one market but also whether it wants to have the same business level strategy for each country in which it competes or whether to give its managers in other countries the responsibility for creating their own business strategies.

For many firms, seeking for new countries’ markets is the mainly attempt to spread their products or services into the foreign markets, and the firms will retain and construct their participation in present markets to increase their worldwide competitive force (Doole and Lowe, 2012, 218; Hollensen, 2007, 5).About market , there is no perfect market entry plan and different market entry methods might be adopted by different firms entering the same market and/or by the same firm in different markets (Bukley, 1985).

When an organisation takes that step to expand from a domestic to an international platform, one of the most important factors to consider is marketing. International development for a company can be challenging, and the two overarching factors to take into account are; technology and globalisation. Technology dictates what the market wants. Globalisation dictates the economic realities of international development. The opportunities of marketing internationally include Market Expansion, Brand Reputation, Global Networking, and access to Future Opportunities . The challenges that marketing internationally creates for a firm are; Global Market Needs, Brand Name Power, Cultural Factors, International Partners, and the Logistical aspect of distance and time . Overall, in modern society with all the aspects of globalisation and technology it is significantly easier to be develop a company to an international level, which can create huge profits.

“The Performance of business activities that direct the flow of goods and services to customers and users in more than one country”

However, while the OLI paradigm centers around a single expansion decision, the Uppsala model views internationalisation as a gradual process with an incremental increase of knowledge of the target region and subsequent commitments in that region. Hence, internationalisation occurs faster in the OLI paradigm. Another difference between the two models is their respective focuses. The OLI paradigm focuses more inward, on the attributes of the expanding company, comprising ownership, location, and internalisation advantages and argues that companies need to combine these to minimise risk and succeed with FDI. On the other hand, the Uppsala model concentrates on the actual process of internationalisation, stating that companies should begin with low risk commitments - such as exports - to acquire knowledge of the target country and then increase their commitment based on the gathered knowledge. With higher commitment, more knowledge can be gained to be used for further commitment (Peng & Meyer

There are internal and external factors that drive companies to approach the global market in a different way as compared to earlier description of traditional stage model. The external factors include globalization, digitalization, outsourcing, virtual economy and development in communication standards while the internal factors include operations, language, culture, local adaptation (Oviatt & McDougall, 1994).

According to Charles W. L. Hill (2016), “International business refers to, any firm that is involved in international trade or investment. With that being said, all a company has to do to be classified as a globally recognised company is export and import products to/or from other countries. Companies decide to go global and enter international markets for various reasons, and these different objectives at the time of entry should produce different strategies, performance goals, and even forms of market participation.

Eclectic paradigm is a theory that provides a three-thiered framework for a company to follow when determining if it is beneficial to pursue direct foreign investment , the eclectic paradigm is assumed that institutions will avoid transactions in the open market when internal transactions carry lower costs in order for a direct investment in a foreign country to be successful.

Global market entry strategies are complex requiring consideration of many factors (Chen & Mujtaba, 2007, p. 322). Many of the complex option decisions are covered in the following two articles. Both articles list numerous factors that influence firms’ decisions for selecting foreign market entry modes. This essay will discuss the findings of two articles and highlight how the two articles relate to one another. The two articles were chosen from the Argosy online Library at ProQuest Central. After careful consideration for the contents and the overall coverage of the subject matter, the following two articles were found to be most suitable: 1) Competitive Market Choice Strategies in Multinational Marketing and 2) The Choice of Entry

The goals of business are to increase or stabilize profits. Success is influenced by foreign sales and foreign resources. International business includes all business transactions that involve two or more countries. In order to pursue any of its international objectives, a company must establish international operational forms, some of which may be significantly different from those used domestically. The choice of forms is influenced not only by the objective being pursued, but also by the environments in which the firm must operate. These environmental conditions also

International market entry is important because it enables an organization to increase its output and attract new customers. By expanding the customer base and the scale of production, the business will be able to achieve economies of scale. That is, the organization can be able to reduce the average cost per unit of production when the level of output is substantially increased (Stephan and Roin 28). After international expansion, cost advantages and higher profit be obtained through bulk purchasing, enjoying high turnover rate and paying lower interest rates on loans.

The company’s choice to internationalize can incorporate both inward and outside motivating forces that impact the firm to participate in global

Global companies like P&G, J&J, IBM, GE, Pfizer, Cisco, Tata & Sons, Mahindra & Mahindra, Haier, Lenovo, HSBC among others, have all adopted M&A strategy. Some authors say that organizations rely on three mechanisms to achieve growth: organic growth, alliances, and mergers and acquisitions (Rosinski, 2011). Other authors have proposed five ways of international expansion, in increasing order of cultural risk: (1) the greenfield start, (2) the international strategic alliance, (3) the joint venture with a foreign partner, (4) the foreign acquisition, and (5) the cross-national merger (Hofstede et al., 2010).