International Marketing - Part 1 PDF

International Marketing - Part 1 Why internationalize? ⟶ Motivations for firms internationalizing include risk reduction (stabilizing sales across different business cycles and diversifying market risks), and realizing opportunities (developing new sales opportunities, extending sales of seasonal p...

International Marketing - Part 1 Why internationalize? ⟶ Motivations for firms internationalizing include risk reduction (stabilizing sales across different business cycles and diversifying market risks), and realizing opportunities (developing new sales opportunities, extending sales of seasonal products, capitalizing on cost advantages). What are these theories of Internationalization? Key internationalization theories: Uppsala Model: A gradual internationalization process, starting with nearby markets and expanding to more distant ones through successive stages (sporadic exporting, using independent representatives, establishing foreign sales subsidiaries, and finally foreign production). Market commitment increases as a firm expands. Factors like psychic distance (perceived differences between markets) influence decisions. This model highlights an incremental/sequential approach. Criticism: Model is too deterministic, Does not account for country market interdependencies, Leapfrogging tendency (entering more ‘distant’ markets or using other entry modes). Traditional Cost Model: Focuses on using existing transaction or set of transactions to create lower cost of production and/or service to maintain competitive advantage. Born Globals: Businesses that immediately enter international markets with high growth potential, often leveraging technology and entrepreneurial vision, minimizing psychic distance to new markets. Influencing factors include: Growing importance of niche markets, Advances in process/technology production, Flexibility of SMEs, Global networks, Advances in information technology.