Process- and stage models outline certain steps which the company follows when
expanding internationally. These models were primarily developed already in the
1970’s but have proven to be surprisingly resilient in spite of significant changes in
the economic environment. New theories fail to give comprehensive insight into the
international expansion of modern firms. This thesis describes a firm’s international
expansion in the 21
st
century, as well as determines the reason for the process- and
stage models still receiving significant attention. According to new theories and our
case study, Acne Jeans, the modern firm will internationalise early and fast. Hence,
the process- and stage models fail to explain the short time it takes from a company’s
founding to its internationalisation, as well as the speed at which the
internationalisation takes place. Some of the steps are also out-dated. Yet, the models
do prove to have some explanatory power.
International trade has been the subject of much attention and trade has been
expanding fast over the last few decades. This has led to an increase in many forms of
international business. International trade is believed, and has been proved, to bring
with it great potential benefits for most parties involved, such as for the nation’s
economy and for the firm itself. Consequently, public policy makers have shown
significant interest in the international development of firms. And the managers of the
individual firms have tended to focus on exporting and internationalisation, since
international activities can provide a useful platform for the exploitation and
exploration of competitive advantages.
The firm’s international expansion has been of great interest and it has also been the
focus of much prior research. However, most models of this phenomenon were
formulated several decades ago. The most prevailing ones are the process- and stage
models developed during the 1970’s. None of the more recently written theories
capture the internationalisation process of a “modern” firm in an entirely satisfactory
way. They are much more focussed on describing the evolvements in the international
economic environment than outlining a description on how firms actually behave
when going international. In fact, these papers neither provide comprehensive insight
into the actual behaviour of the moden firm, nor do they give an explanation to the
fact that the process- and stage models are still widely used
Purpose and General approach
Having studied the evolution in the global economic environment and the
developments in theory we are curious to see how well the process- and stage models
describe a firm’s internationalisation process today. The purpose of this thesis is to
determine how a modern firm’s international expansion can be described in the 21st
century as well as establishing the reason for why the process- and stage models are
still widely used for describing firms’ internationalisation processes.
The approach chosen for this thesis has been to start by determining the major
changes in the economic environment. Through an extensive review of research we
have formulated developments in the environment, both on the macro level and on the
firm level. The review of changes in the economic environment is followed by a
description of how economic theory has developed during the course of the last few
decades.
Following this section, we establish how the develpments in the economic
environment have given rise to a new type of multinational corporation.
In the next section we look into the process- and stage models, which are the most
prevailing models to date describing the firm’s international expansion. They were
primarily developed and formulated during the late 1970’s. Two of the most well
known models are Johanson & Vahlne’s Uppsala Model, formulated in 1977, and a
stage model published by Lars Håkanson in 1979. These models are indeed still
widely used. The Uppsala model is for example used by Andersen (1993), Coviello &
McAuley (1999) and Andersson (2000). And Håkanson’s model is referenced in
Bagchi-Sen (1995), Westhead et al. (2001) and Ettlinger (2003), among others
Author: Sebastian Hybbinette, Peder Stubert,
Stockholm School of Economics ,Department of Economics
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