Internationalisation Theroy Two Case Studies Essay

4010 WordsMar 22, 200917 Pages
International Business Environment Assignment Sections 1. Internationalisation Models & Theories 2. Asian Choice- Honda Motors Ltd 3. American Choice - General Motors 4. Comparison of the Honda & General Motors in terms of internationalisation theory Internationalisation Models & Theories by Ninad Pattalwar To explain the internationalisation of the firm there are mainly three traditional theories which are behavioural theories which include the Uppsala model, Network approach, the Eclectic Paradigm and other theories that are borrowed from the main perspective of economics. However there is extensive literature suggests that firm internationalise mainly due to external and internal triggers such internal triggers for internationalisation of firms consists of factors such as management’s interest in internationalisation, foreign queries about the organisation’s products and saturated home market (Hollensen, 2004). On the other hand the external triggers for a firm to globalise include drivers such as country, cost, customer and competitive influences. • The Dunning eclectic theory is also known as OLI Model. Let’s assume if the firm possesses net ownership advantage vis-à-vis firm of other nationalities in serving particular markets. These ownership advantages largely take the form of the possession of the intangible asset, that is, at least for period of time, exclusive or specific to the firm possessing them. Assuming condition that ownership is satisfied, it must be more beneficial to the enterprise possessing these advantages to use them itself rather than to sell or lease them to foreign firms, that is, for it to internalise its advantage through an extension of its own activities rather than externalise them through licensing and similar contract with independent firms. Assuming conditions that ownership is gained and

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