The Pros And Cons Of Internationalization

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The previous model, considers that companies internationalize only from a certain point of life, after having already obtained a certain amount of experience and maturity. However, the model presented below proposes a different internationalization process logic, which is increasingly adopted in the current context. Therefore appears the accelerated internationalization process; which considers that companies are born globalized or internationalized (Freeman et al., 2009). Researches of companies that focus from birth on the foreign market started about two decades ago. So over time, according to Rialp et al, (2005), several designations were suggested for this kind of firms: Born-Global, International New Ventures, High Technology Start-ups,…show more content…
The competitive advantage of these companies and their permanence in the market lies: in their ability to respond to imbalanced resources existent between different countries and, on the ability to create markets were their previously didn’t exist. This sustained competitive advantage depends on three factors. First, on their ability to identify and act (sometimes through high tariffs) to emerging opportunities before the competitors reduce the profits in markets in which these were installed previously. Second, on the knowledge of markets and suppliers, and ultimately on their ability to attract and maintain a loyal network of business partners (Oviatt and McDougall 1994). The second group of Geographically Focused Start-Ups is composed of start-ups focused on a specific region. Unlike the first group of companies operating in diverse geographical regions, Geographically Focused Start-ups base their competitive advantage on the response of specific needs of a geographic niche. The success of these businesses is based on its ability to coordinate various activities along its value chain; activities such as, technological development, human resources or production (Oviatt and McDougall…show more content…
licensing) joint venturing, acquiring an existing company, and establishing a wholly-owned greenfield investment (Pan & Tse, 2000). Laufs & Schwens (2014) argue that the foreign market entry mode choice will determine first, the degree of commitment that the company will need in the external market (Hill, Hwang, & Kim, 1990); second, the risks that will have to be faced in the country of destination (Hill et al., 1990; Hill & Kim, 1988); and third, the level of control that the company can obtain on its activities developed abroad (Anderson & Gatignon,

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