Internationalisation Flashcards
Definition of internationalisation?
Internationalisation refers to the principle of cooperation and solidarity among nations and people. It advocates for the idea that nations, cultures and people can work together across borders.
What is the main reason for internationalism?
Financial incentives- but involves risk due to the level of investment required. Benefits may outweigh risks.
What are the 2 categories that factors involved can be placed in?
Pull- factors that attract company to a foreign location.
E.g cheaper labour, new markets, economies of scale.
Push-factors in a company’s home that act as a catalyst to overseas growth.
E.g market saturation, trading regulations, cost of production
What are the ways of internationalising?
Exporting- shipping and selling products internationally.
Foreign Direct Investment (FDI) - acquires assets including shares in a foreign company.
Outsourcing production or service delivery- an agreement between multinational company and local company so the latter can produce goods and services.
Why would a company internationalise?
To reach new markets
To gain more efficient production
To have proximity to key resources
Access to technology skills
Market saturation and change in taxation/regulations
