Theories of Internationalization Essay Example | Topics and Well Written Essays - 3000 words

Theories of Internationalization - Essay ExampleThis paper takes a comprehensive look at three of these theories The Uppsala Model, The Eclectic Theory of International Production and Michael Porter infield Model. The definitions, assumptions, strengths and weaknesses relating to the above mentioned theories ar discussed in this paper. The Uppsala Model The Uppsala Model was developed by Johanson and Vahlne in 1977 from their studies which focused on manufacturing firms of Sweden (Buckley & Ghauri, 1998 p.63). The empirical observations from their studies made them formulate the Uppsala Model. This model is based on the behavioural theory which uses behavioural actions to develop the nature of firms. Internationalization has been described as a process of experiential learning and incremental inscriptions which leads to an evolutionary development in a foreign foodstuff. The model has focused more on acquisition of cognition and learning. In this regard, the lack of knowledge is seen as a barrier to the development of foreign operations. Four event concepts can be extracted from the Uppsala Model. These are market knowledge, market commitment, current activities and commitment decisions (Buckley & Ghauri, 1998 p.66). ... Both kinds of knowledge are required for international initiatives. The objective or general knowledge is easily learnt through teaching and marketing researches while the experiential or market -specific knowledge is only learnt through personal carry out and is non transferrable of separable from the source. The model places much emphasis on experiential knowledge because it generates business opportunities and lays the ground upon which internationalization process takes place. Market commitment concept is built from two factors. They are the amount of resources and the spot of commitment. The amount of resources refers to the size or the scale of investment in terms of marketing, personnel, research and others. The degree of comm itment varies depending on the level of consolidation between the resources and other parts of the firm. The degree is higher if the level of integration is higher. Current activities constitute the main source of experience for a firm. Experience is important because it generates opportunities that lead to market commitments. Other sources of experience would include hiring people with experience, getting advice from other firms and taking everyplace other firms with experience. These options turn out their limitations. First, the experienced force to be hired may not be available and second, the firms to take over or get advice from may not also be available. The best available option of gaining experience is through current activities which is a slow process (Michael, 2011 p. 39). The current business activities have to be continual over time in order to realize want consequences. Therefore, if the lag between the current activities and desired