Internationalization Essay

Cheap Custom Writing Service

In the past 20 years, an increasing number  of firms have changed their orientation from domestic to international marketing  and/or  production.  Internationalization  is accordingly when firms extend  their products   or  services  in  overseas  markets,  usually from their home country.

Among the foreign market operation  modes firms can use for their  internationalization are exporting, licensing, franchising, joint ventures, strategic alliances,  or  wholly owned  foreign  direct  investment (FDI), such as greenfield investments and mergers and acquisitions.  Although  in the  literature,  the  foreign market operation  mode has mostly been regarded as a singular entity, in the more complex business reality, firms often use multiple or mixed modes in the same foreign market.

Possible  advantages  of  internationalization  are the extension and expansion of market (e.g., increasing sales in foreign markets),  the diversification of the  risk of overreliance  on  the  home  market,  the exploitation of resources in other countries, the taking advantage of economies  of scale, the acquiring of economies  of scope (i.e., the building and using of foreign market  expertise  in against  your rivals) in  R&D, marketing  and  distribution   systems,  etc. Because  of  these  advantages,  internationalization can  lead to  higher  corporate  performance,  higher profitability and more stable profits.

Several theories and models of internationalization have examined  the timing strategies  of firms. Especially, there  is ample evidence in support  of the so-called stages models of internationalization, such as the Uppsala model. These models view internationalization as a sequential  incremental  process with a varying number of stages. At first, firms develop products and services for domestic markets. After having grown and being well established in their home market, the firms begin venturing abroad by transmission of knowledge and domestic-based  practices to other countries,  usually to  those  that  are  similar  to  the domestic market in terms of culture and language— therefore mostly to nearby countries first. In the initial years of internationalization, foreign market entry is a gradual commitment of resources, often beginning with export,  thereby  gaining first knowledge about and establishing ties (to politics, local business, etc.) in the target. As these ties deepen, more resources are invested abroad, often in form of a marketing subsidiary that is being founded. In a next step, foreign production might be established.

Although  widely empirically supported,  over the last decade,  there  has been  much  debate  over the applicability  of the  stage  models  of internationalization towards certain firms, especially small firms in  the  high-tech   sectors.  Especially with  regards to the so-called born  globals (or international new ventures),  i.e., firms  that  engage  in  international operations  from the first day of their establishment, conventional stage theories with their gradual establishment   of  internationalization  activities  do  not seem to be applicable anymore.

Due to the new economic landscape, internationalization has also accelerated among these small and new enterprises,  because international markets can represent new entrepreneurial opportunities. Mostly because to their  size, these firms display several of the characteristics  that  are advantageous  for internationalization,   such  as  high  flexibility and  short lines of communication. In the process of internationalization,  small and  new firms are  confronted with the notion  that often neither  the development of a subsidiary (greenfield investment)  nor the purchase of a company in the target market (brownfield investment)  represent  an attractive or even possible option.  Recent  literature  therefore  especially suggests cooperation  or joint ventures  with local partners as promising internationalization strategies for small and new firms.


  1. Leo Paul  Dana,  Handbook  of  Research on European  Business and  Entrepreneurship: Towards  a Theory of Internationalization (Edward Elgar, 2008);
  2. Jean Guinet  and  Koen De Backer, The Internationalisation of Business R&D: Evidence, Impact and Implications (OECD, 2008);
  3. Daniel S. Hamilton and Joseph P. Quinlan, Globalization and Europe: Prospering in the New Whirled Order (Center for Transatlantic Relations, Johns Hopkins University, 2008);
  4. W. Lu and P. W. Beamish, “The Internationalization and Performance of SMEs,” Strategic Management Journal (2001);
  5. M. Oviatt and P. P. McDougall, “Toward a Theory of International New Ventures,” Journal of International Business Studies (1994);
  6. Donna L. Paul and Rossitza B. Wooster, “Strategic Investments  by US Firms in Transition  Economies,” Journal of International  Business Studies (v.39/2, 2008);
  7. D. Sharma and A. Blomstermo, “The Internationalization Process of Born Globals: A Network View,” International  Business Review (2003);
  8. Beth A. Simmons, Frank Dobbin, and Geoffrey Garrett, The Global Diffusion of Markets and Democracy (Cambridge University Press, 2008).

This example Internationalization Essay is published for educational and informational purposes only. If you need a custom essay or research paper on this topic please use our writing services. offers reliable custom essay writing services that can help you to receive high grades and impress your professors with the quality of each essay or research paper you hand in.

See also:


Always on-time


100% Confidentiality

Special offer!