The's Theory Of Internationalization ( Johanson ) And Stephen Hymer's Three Determinants Theory
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Over the last few decades there has been a substantial amount of attention being diverted towards born global firms who unlike ordinary firms, have defied the traditional stage wise process of internationalization. These firms have long puzzled researchers and challenged the basic perception of internationalization. As a result it has given way to a new field of research and aroused global interest in the emergence and success of these firms. This essay will go on explain why born global firms emerge, the factors that influence them and examples of born global firms in the real world. Uppsala’s theory of internationalization (Johanson & Vahlne, 1977 ) and Stephen Hymer’s Three Determinants theory are used to further analyze this essay.
Nature of Born Global Firms
A born global firm is defined as “a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries”. (Benjamin M. Oviatt and Patricia Phillips McDougall ) A more detailed definition defines born global firms as “companies who have reached a share of foreign sales of at least 25 per cent within a time frame of two to three years after their establishment”. (Business strategy review). According to Uppsala’s model of internationalization (Johanson & Vahlne, 1977) firms have four distinct stages. A firm at stage one takes no part in regular export activities owing to the fact that it’s a start up, at stage two it may