Internationalization Models Overview

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Questions and Answers

What does the systematic literature review by Morais and Ferreira (2020) suggest about the internationalization models of SMEs?

It suggests that SMEs follow different internationalization models depending on the context, and no single model can be deemed superior.

Why is it recognized that scholars should not base assumptions on just one internationalization model for SMEs?

Because combining ideas from different frameworks is essential to accurately understand the diverse approaches SMEs take to internationalize.

What similarities do MNEs and SMEs face in the process of internationalization according to García-Álvarez de Perea et al. (2019)?

Both face similar internal and external barriers during their internationalization processes.

How is the Uppsala model viewed in terms of its applicability to SMEs, according to the provided content?

The Uppsala model is seen as generally valid for internationalization, making it applicable to SMEs despite being both a strength and weakness. Signup and view all the answers

What role does the networking approach play in the internationalization of SMEs?

The networking approach acts as a tool to help SMEs overcome size-related disadvantages when entering foreign markets. Signup and view all the answers

What are the critical factors that influence the internationalization of SMEs according to the internationalization models?

Experience and knowledge are critical factors influencing an SME's internationalization. Signup and view all the answers

Explain the relationship between resource commitment and internationalization in SMEs.

Greater resource commitment leads to a higher degree of internationalization and complexity, which enhances knowledge accumulation. Signup and view all the answers

How do networking approaches contribute to the internationalization process of SMEs?

Networking approaches enable SMEs to create resources through interactions, emphasizing the interdependence of resources crucial for internationalization. Signup and view all the answers

What is the significance of timing in the internationalization of 'born globals'?

Timing is crucial for 'born globals' as it impacts their ability to quickly introduce innovations in the international market. Signup and view all the answers

Identify and briefly describe one of the liabilities faced by SMEs during internationalization.

One liability is the 'liability of smallness', which refers to SMEs having fewer resources and lower reputational reach than larger firms. Signup and view all the answers

What role does innovation play in the internationalization process of SMEs?

Innovation facilitates the feasibility of entering international markets, driving the internationalization process for SMEs. Signup and view all the answers

Discuss how the resource-based internationalization approach compares to the networking approach.

Both the resource-based and networking approaches evolve together, emphasizing the creation of resources through networks and the importance of resource commitment. Signup and view all the answers

Why might existing internationalization models developed for MNEs be less applicable to SMEs?

These models may not fully account for the unique challenges faced by SMEs, such as their limited resources and knowledge of international markets. Signup and view all the answers

What criticism is leveled against the Uppsala model of internationalization?

It is criticized for its deterministic nature, suggesting companies have no real strategic choices in the internationalization process. Signup and view all the answers

How does the business network internationalization process model differ from the traditional Uppsala model?

It views market entry as a position-building process within a foreign market network rather than just a decision of entry modes. Signup and view all the answers

What factors influence the internal network relations in the context of internationalization?

Knowledge, trust, and commitment levels among network members significantly influence internal network relations. Signup and view all the answers

In the context of international business networks, how should a firm be perceived?

A firm should be perceived as an exchange unit rather than merely a production unit. Signup and view all the answers

What encourages a business network to pursue internationalization according to the text?

Environmental push factors that aim to increase the competitiveness of the entities involved drive the network towards internationalization. Signup and view all the answers

What is the significance of intangible, knowledge-based resources in the resource-based view of internationalization?

Intangible, knowledge-based resources are crucial for a company’s competitive advantage in international markets. Signup and view all the answers

What limitations do scholars identify regarding SMEs in the context of resource-based view?

Some scholars suggest that the resource-based view lacks explanatory power when applied to SMEs. Signup and view all the answers

What evidence suggests that the Uppsala model may be losing relevance in contemporary business practices?

The emergence and success of born-global companies indicate that the Uppsala model may not adequately explain current internationalization trends. Signup and view all the answers

What is the difference between active and passive internationalization?

Active internationalization involves expanding a company's geographical range, while passive internationalization refers to sourcing goods and services from abroad. Signup and view all the answers

What role did the Uppsala model play in understanding internationalization?

The Uppsala model explains how firms learn and expand internationally in a stepwise manner, starting from nearby markets and gradually increasing their commitment. Signup and view all the answers

What is meant by 'psychic distance' in the context of the Uppsala model?

Psychic distance refers to the perceived differences between the home market and foreign markets, influencing a firm's choice of where to expand first. Signup and view all the answers

How do companies typically begin their international operations according to the dynamic model?

Companies typically start international operations with low-investment, non-equity modes before transitioning to more substantial commitments. Signup and view all the answers

What types of business functions do firms deepen their dependence on during international expansion?

Firms deepen their dependence on marketing, production, finance, personnel, and administration in international markets. Signup and view all the answers

What was one of the key motivations for the acceleration of internationalization in the 1920s?

The acceleration of internationalization in the 1920s was driven by globalization, which increased the reach and impact of international trade. Signup and view all the answers

What impact does active internationalization have on economic growth and unemployment?

Active internationalization is said to boost growth and reduce unemployment by enhancing a company's competitiveness. Signup and view all the answers

In what sequence do companies typically expand their operations according to the Uppsala model?

Companies typically expand their operations sequentially, starting with sales and marketing and later moving to production, R&D, and finance. Signup and view all the answers

Study Notes