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Critical Review of International Marketing Concepts and Theories

Introduction

In the past few years, internationalization process in small and medium business has attracted the attention of many scholars and business managers. The focus is derived from their activeness and expansion of their business in the international markets. Managers in small and medium businesses have opted to internationalize their activities and apply the strategic changes to achieve their growth objective. The internationalization has been through the application of various models, such as the Uppsala Internationalization Process Model, International Entrepreneurship Theory, and Network Theory (Elango & Pattnaik, 2007).

In the past days, business internationalization was explained through the use of stage model which was a step by step process. Under this model, the firm that wishes to start any international activity later, should get involved in the international market and eventually owns subsidiaries abroad. The model resembles the Uppsala model that was proposed by Johansson, Vahlne in 1977 before it was criticized, and others were developed and adopted. New models, such as The Network Approach model brings out the significance of creating a good relationship with suppliers, customers and also the market in stimulating business internationalization (Jan 2004).

>In the current business era, advancement in technology and the reduction of trade barriers have made the global economy more integrated, and such globalization has enabled managers to internationalize their business more easily and more efficiently. Over the last years, researchers have put into question the efficiency of Uppsala model in explaining the internationalization process of the SMEs, hence introducing other new models such as the Network Model and the International Entrepreneurship model to explain why and how businesses internationalize. Various theories explain the different process of business internationalization (Amal & Rocha 2010).

The objective of this research is to enhance the understanding of the internationalization process of small and medium businesses through various models. This research seeks to analyze the available theories and their significance in internationalizing SMES and their validity in the future expansion of the SME markets.

The Uppsala Internationalization Process Model

The theoretical framework of this model was developed at first in 1975 by Johansson and Wieldersheim-Paul while studying the four Swedish firms. Through this, they realized that when firms internationalize, they move together in a series of increasing steps, which were termed as establishment chain. The model has its roots in the behavioral theory of businesses which describes internationalization of businesses as a gradual process of the firm in increasing its international awareness. It is expressed in the model through establishment chain and psychic distance.

As argued by Elango and Pattnaik (2007), the Uppsala model entails the interaction between knowledge development of foreign markets, the developing operations within it, and the increase in committing resources to such markets. The model describes the dynamic model and also the internationalization process of a firm.

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