Operation modes in international markets has to the authors knowledge to date

Operation modes in international markets has to the

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Operation modes in international markets has to the authors’ knowledge to date not been directly linked to Porter’s generic strategies. During the 1980s and 1990s, much of the attention in international business research focused on international entry or operation modes (Buckley and Casson, 1976; Anderson and Gatignon, 1986; Benito and Welch, 1993; Hennart, 1988; Welch et al. , 2007). The degree of integration is thought to determine many other variables in international marketing such as monitoring and control, use of resources and financial risk (Solberg and Durrieu, 2006). Most of the literature in this field of research takes a transaction cost economics approach, explaining integration of international operations (IO) by factors such as asset specificity, uncertainty, and frequency of transactions. One key issue in this context has been to bridge the deficiencies of hierarchical solutions with those of market-based solutions, leading to a string of literature on international strategic alliances (Hennart, 1988). Much of the literature has however centred on other dimensions of strategic alliances such as (international) market positioning (Harrigan, 1988; Hamel et al. , 1991) and relationship processes (Contractor and Lorange, 1988; Inkpen and Birkinshaw, 1994; Hyder and Ghauri, 2000; Robson et al. , 2006). Somewhat less attention is given explanations offered by the incremental school of thought, emphasizing the resource base of the company, including its gradually accumulated knowledge of and insights into international marketing conditions as the firm accrues foreign experience ( Johanson and Vahlne, 1977, 1990). The main issue here is the ability of firms to make Strategy development in markets 523
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bolder commitments in international markets through down stream investments, based on their assessment of the trade-offs between risk and opportunities. Confronting the incremental school of internationalisation with the more recent writings on Born Globals (Oviatt and McDougall, 1995; Madsen et al. , 2000; Knight and Cavusgil, 1996; Rialp et al. , 2005; Gabrielsson and Manek Kirpalani, 2004 and others), another important strategic dimension emerges: that of pace of international involvement of the firm. This element of internationalisation strategy is getting increasingly relevant in view of the effects of globalisation drivers, either forcing firms to rapidly establish themselves in order to pre-empt competitors to conquer important positions in key markets (Hamel and Prahalad, 1986; Solberg, 1997) or presenting firms with a range of attractive opportunities in the global market place. The degree of market spread (or concentration) may be linked to the pace of internationalisation, but is more concerned with the geographical coverage than the temporal component: some firms cover most of the countries in the world, whereas other firms concentrate their resources in only a limited number of markets.
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