Understanding and critically Evaluating Entry Modes of Businesses in International Market

enables these industries to internationalize (Johanson and Mattsson 1988). Additionally, there is no recent research focusing on these industries after the globalization of services and the enhanced importance of services in the World and in Sweden. Finally, a case study approach has not been conducted yet in this matter. The Dissertation

When thinking about internationalization, a lot of people instantly associate it with multinational companies. It cannot be said that they are wrong; however, internationalization is a far more complex phenomena as it does not only consist of companies setting their headquarters outside the borderlines of the countries of origin. If an entity simply decides to import or export commodities or services, their action can also be described as ‘going international’; producing effects both domestically and internationally. In recent years, the number of companies that chose to get involved in international business operations and transactions increased substantially to the point where becoming visible in

This is beneficial to the company as it gives the business a stronger reputation around the world. The more international a company is, the more recognition it accrues. For example take Nike and Hyba, which are both athletic apparel companies. Instantly, Nike stands out because of the hype it gives off and the fact that almost everyone knows that brand since it is located all around the world. On the other hand, Hyba is only located in Canada. Thus, when given an American for example the opportunity to choose from the two brands, they are more likely to choose Nike as they would probably have heard of it, been to their stores and/or never heard of Hyba before. After Bean There, Drunk That expands to Finland and continues to grow, it becomes easier for them to expand to other countries. Thus, their chances of expanding to the rest of the world is higher once success is obtained one country at a time as progress does take

Stages of company Internationalization (Uppsala Model) 1. International Marketing – Ethnocentric Orientation 2. Multinational Marketing – Poly centric Orientation 3. Global marketing – Geocentric Orientation 4. Transnational Marketing – Glocal

Consequently, these organizations are trying to reach new consumers to increase their customer base. The second most common motive is the opportunity of producing or offering a service cheaper in another company. This leads to a cost advantage. In addition, the companies can gain advantage in economy of scale and scope. Therefore, they safe production costs by producing a higher amount of their products, which is the third frequently used motive regarding to Nelly and Wach (2014, p.12). All motives are aiming to reduce the cost of production or finding new customers.

Internationalization of the business nowadays apparently became a trend for the organizations to expand their market position and gain the competitive advantage among their contemporaries. The extent and nature of business activities are almost as diverse and comprehensive as the totality of the social and economic interest of a man. Various business activities acknowledged the opportunities that the internationalization may deliver. Through their ability and capacity to expand their business operations, internationalization is highly possible. For most of the time, the high degree of the competition under the umbrella of an industry and the number of competitors that are engaged in the

Many companies today want to expand their business to the international business, which can bring cost down and profits up. Taking a business internationally means knowing the rules and regulations of the countries you are entering. There can be many issues with going global which include cultural barriers, diversity issues, multicultural issues, political issues, and economical issues. It is very important to know how important expansion is to the company and what implications will come from going global.

An international entry mode is an institutional agreement necessary for the entry of a company’s products, technology and human capital into a foreign country or market.

Global business is defined as the buying and selling of goods and services by people from different countries (McWilliams & Williams 2010). It also has to do with international trade and trade agreements. Corporations that own businesses in two or more countries are called multinational corporations (McWilliams & Williams 2010). Most of these global businesses main headquarters are found in the United States or the United Kingdom. Expanding to a global market is quite a complex process and businesses have to take many different aspects into account such as: social/cultural, legal, political, economic, environmental and technological factors. These components help create an attractive business climate. Different businesses operate differently to assess these relevant factors. Strict Import & export rules and regulations also need to be followed. Entering the global market also allows for larger competition between other similar businesses and to create trade agreements.

The rapid pace of Globalization has led to a change in the global economy during the past several decades; it is believe that factors such as trade liberalisation, access to cheaper labour and resources, similarity of consumer demand around the world, and advances in technology and communication has widened the market of consumption, investment as well as production on a global scale. These globalization driven factors created new challenges and global competition for businesses around the world thus as a response many companies decided to expand their operation across national borders in order to be competitive. A company that operates their business in at least one country other than its country is called Multinational

◦ incremental → usually for small companies with fewer resources that wants to lower their risk preclude economies of scale.

In recent decades, internationalization has been more and more common in over the world. This is a great opportunity and challenge that many businesses can earn a lots new experiences and practice themselves when they work in a new environment. Also, internationalization is a good way for companies expand their power and reputation. So these companies or organizations might improve themselves with new knowledge which they learn from foreign countries in order to gain more profits and benefits.

It is vital to understand the internationalization process of small to medium-sized enterprise (SMEs) for them to compete internationally. There are various international approaches that companies can adopt in the process of internationalization. For example, Uppsala Internalization Model (U-Model), The Network Theory, Dunning’s Electric Paradigm and Transaction Cost Theory.

International marketing is an exceedingly difficult and challenging activity for a multinational corporation (MNC) marketer. According to Cateora, Gilly, and Graham (2013), “international marketing is the performance of business activities designed to plan, price, promote, and direct flow of the companies goods and services to consumers of users in more than one nation for profit” (p. 10). International marketing strategies and its efficiency assists in the expansion of an organization. The development of global markets was established by the needs of the consumer. Marketing strategies are extremely important to a firm when they decided to move out of the domestic arena. Accepting and applying

it is the most traditional and well established form of operating in foreign market. it is the marketing and sale of goods or services produced in a country to another country. (Hill,2009)