GSM Lecture 3

Management > Global Strategic Management > Methods of internalisation

Methods of internationalisation

There are three methods of internalising activities:

1. Export: serve a foreign market using domestic production
2. License: serve a foreign market using local operations carried out under license by a local firm
3. FDI: serve a foreign market using local operations owned by the firm. To consider FDI, a firm may refer to the FDI theory, internalisation theory or the eclectic paradigm.

Modes to choose a method

1. OLI framework
2. Uppsala model
3. Network/systems theory

Factors

OLI framework

Uppsala theory

Process of FDI

Network/Systems theory