Understand and Critically Evaluating Entry Modes of Businesses in International Market

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Introduction Well known companies like Nike, Microsoft, Sony, Shell Group are just some of the big companies that went global and expanded their trading around the world, they are large businesses that operate internationally in many countries. Development of worldwide integration urges companies to reach out international markets and interact with foreign customers. Businesses focus on fulfilling the demand of the market by its products or services, their focus is also increasing profit, and to achieve these goals they favor to expand their work in a foreign market. Other reasons to internationalize their business may be to become stronger than the other competitors and also to lower their expenses by getting resources they need at…show more content…
Uppsala Model considers two types of knowledge objective and experience based knowledge. (UPPSALA MODEL) After first entrance firms understands how to work in foreign country, and later they step by step increase level of internationalization to physically distant countries. Can Uppsala model be applied to services? This model was mainly reliable for manufacturing industries; a paper with contrary arguments was published by BRAZIL providing two variables; environment-related and service specific, to question whether Uppsala model can be used for service firms. Psychic distance and uncertainty in environment, need for quality, face-to-face contact with clients in service delivery, capital intensity are some of the arguments that contradicts Uppsala Model. (BRAZIL) Mainly services would choose a mode to internationalize that has higher control like licensing. In 1990s in USA the business service companies used franchising as a method to internationalize their businesses, in 1999 Ilan Alon and David L. McKee conducted a research to determine the issue of franchising as mode of entry in

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