The different forms of internationalisation theories

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The different forms of internationalisation theories

Push and Pull Factors in International Business Push and Pull Factors in International Business Companies decide to go global and enter international markets for a variety of reasons, and these different objectives at the time of entry should produce different strategies, performance goalsand even forms of market participation.

However, companies often follow a standard market entry and development strategy. As business and confidence grows, a switch to a directly controlled subsidiary is often enacted. This internationalization approach results from a desire to build a business in the country-market as quickly as possible and by an initial desire to minimize risk coupled with the need to learn about the country and market from a low base of knowledge.

International markets evolve rapidly and very often companies struggle to keep up in terms of their strategy. This, in turn, suggests that most companies would adopt different entry modes for different markets.

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More commonly, however, is for companies to evolve a template that is followed in almost all The different forms of internationalisation theories. This usually starts with market entry via an indirect distribution channelusually a local independent distributor or agent.

The factors leading to the wide acceptability of international business are: The policy of liberalization was adopted which led to the globalization of various economics including the former communist countries and socialist pattern of the society.

The globalization of economics has been instrumental in the growth of international business. Many firms have emerged up with innovated products or with improved process technology.

With the demand for such products and technology being price-inelastic, these firms have moved abroad in order to reap large profits. The development of information technology has bought different countries closer and has encouraged firms to move abroad with the minimum of difficulties.

With increasing competitionfirms have preferred not only to source raw material and intermediate goods from the least-cost country but also to set up their units in different countries, which minimizes the cost of operation and reduces financial risk.

The growing concept of cost minimization and risk reduction, with a view to surviving in a competitive environmenthas led to rapid growth of the internationalization process. Higher growth rate of GDP in developing countries: Higher growth rate of GDP of China, India, South Korea, Singapore, Malaysia, Thailand, Brazil and Mexico and other developing countries has also been one of the significant factors for changing scenario of international business.

Increase in business alliance In degree and variety: During last 15 years international business alliances, joint ventures, mergers, amalgamations and takeovers have occurred in the world by the companies of different countries.

This has further led to widening of international business. Increase in educational and career orientation opportunities: These factors resulted in enhancement of opportunities for higher value addition in developing countries.

The different forms of internationalisation theories

The developing countries started attracting multinational companies to establish their businesses in their countries. Why Companies Engage in International Business?

There are several drivers of international business. The driving forces that motivate companies to go global can be classified into pull forces and push forces. The pull forces are proactive which pull the business to foreign markets.

The push forces on the other hand are reactive forces which promote the companies to go international. Profit advantage due to increase in volume: For companies, mostly in the developed countries, which have been operating below their capacities, the developing markets offer immense opportunities to increase their sales and profits.

Many multinational companies MNCs are locating their subsidiaries in low wage and low cost countries to take advantage of low cost production. Taking advantage of growth opportunities: MNCs are getting increasingly interested in a number of developing countries as the income and population are rapidly rising in these countries.

Foreign markets, in both developed country and developing country, provide enormous growth opportunities for the developing country firms too. Growth of regional trading blocs: Regional trading blocs are adding to the pace of globalization.

Trading blocs seek to promote international business by removing trade and investment barriers. Integration among countries results in efficient allocation of resources throughout the trading area, promoting growth of some business and decline of others, development of new technologies and products, and elimination of old.

Declining trade and investment barriers: Declining trade and investment barriers have vastly contributed to globalization. The free trade regime, business across the globe has grown considerably.Discusses four theories of internationalisation: the Uppsala model of internationalisation; the eclectic paradigm and transaction cost analysis; the interactive network approach of the International Marketing and Purchasing Group; and what may be termed the business strategy approach.

The bachelor’s degree programme in Economics and Business Administration is a degree programme with an international focus. The aim of the paper is to determine the role of different types of company's behaviour in the internationalisation process, identified from the perspective of a .

Theories of internationalisation •Ownership – specific advantages •Location – specific advantages •Internalisation •Eclectic theory •Sequential theory •Simultaneous theory •Network theory •International product life cycle (IPLC).

The basic requirement for possible admission to the Development Economics Coursework Program is an Honours degree in Economics or Econometrics on NQF level 8 (new)/NQF level 7 (old) with an average mark of 65 percent.

The different forms of internationalisation theories

internationalization theory focuses on The main variables the internationalization explanatory approaches from different theories into one single framework (Ekeledo and Sivakumar, ; Glückler, ). renting them out to external parties in the form of licensing agreements or franchising (Mtigwe, ).

According to the theory.

Global Capitalism, Third World Development: From protectionism to neoliberal free markets