The Eclectic Paradigm: What Are The Reasons For Internationalization?

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Reasons for Internationalisation

 Companies can decide to go global or to enter international markets for various reasons, and these different objectives at the time of entry that enable the business to produce different strategies and the performance goals, and even forms of market participation.

 Increase Sales: - if a business succeeds in the US, going international will likely improve the overall revenue. Approximately 96% of the world’s population lives outside of the United State and 90% of the world’s population do not speak English, that suggest that customer is global and if a business has to look beyond the end of the domestic market, you have real upside potentials

 Improve profit: - a lot of export market are not a
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Eclectic Paradigm: - The Eclectic paradigm and transaction cost analysis – It is the length, types and pattern of international production and it is founded on the juxtaposition of the ownership-specific advantages of the company considering foreign production. The propensity to internationalise the cross-border markets for these, and the attractions of a foreign market for the production (Dunning 1988).
International market entry decision is often made in a rational manner, based on explaining of the costs of the transaction.
Industrial Network: - Both Uppsala model and the Eclectic Paradigm above concentrate on the right condition of the business in producing its international marketing activities. It is the firm or individuals within the business who decide how it will enter a specific market abroad. Johanson and Mattsson (1986) believe both models leave out characteristic of the firm and the market that seem important in the industrial system.
Turnbull (1986) recommend that a major weakness is a one-sided focus on the activities of the manufacturer together, that negotiate in the flow of goods and services to the customer
Business Strategy approach: - this is based on the idea of Pragmatism (Welford and Prescott, 1994) with the company making trade-offs between a number of unstable decision to internationalize and the way it adopts to do so Reid (1983) argues that foreign expansion is contingency based and
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