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Internationalisation Process

Internationalisation Process. Methods of internationalisation. Export based Direct exporting Indirect exporting Non-equity based Licensing Franchising Equity based Joint ventures Foreign direct investment (fdi) Consortia, Keiretsus and Chaebols. Why invest abroad?. Supply factors

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Internationalisation Process

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  1. Internationalisation Process

  2. Methods of internationalisation • Export based • Direct exporting • Indirect exporting • Non-equity based • Licensing • Franchising • Equity based • Joint ventures • Foreign direct investment (fdi) • Consortia, Keiretsus and Chaebols

  3. Why invest abroad? • Supply factors • Production costs • Distribution costs • Availability of natural resources • Access to key technology • Incentive schemes to reduce costs

  4. Why invest abroad? • Demand factors • Saturation of home market • Avoidance of trade barriers • International product life cycle • Demand from business customers now abroad • Demand from overseas governments for inward fdi (incentive schemes) • Strategic issues: e.g. matching rivals; seeking more ‘local’ responsiveness.

  5. Theories of internationalisation • Ownership – specific advantages • Location – specific advantages • Eclectic theory • Sequential theory • Simultaneous theory • Network theory • International product life cycle (IPLC)

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