TITLE:
Internationalization Strategies: A Theoretical Approach to the Input Mode Choices in the Foreign Market and the Inclusion of Real Options Modeling for Decision Making
AUTHORS:
Lucimeire Cordeiro da Silva, Josir Simeone Gomes
KEYWORDS:
Internationalization, Strategy, Product Life Cycle, Resource Based View, Real Options, Brazil
JOURNAL NAME:
Open Journal of Business and Management,
Vol.11 No.5,
September
12,
2023
ABSTRACT: This theoretical essay aims to present the main
approaches to the strategic decisions of internationalization and enter a
discussion on the inclusion of real options theory in decision making that
involves the input mode choices in the international market. Multinationals are
faced with the acting choices in international trade, foreign direct investment
(FDI) and the contractual relationship. The relevance of this study is through
the introduction of a discussion of the new approach (real options) to input mode
setting in the international market. Therefore, we present the main approaches
to international business theory as well as its extensions. The methodology was
descriptive. The strategic decision to internationalization involving the
choice of input mode is a special case of diversification strategies. Three
approaches to strategic decisions on internationalisation have been identified:
the product life cycle approach, vision-based on dynamic features and
capabilities and approach of real options. The approach of real options is a
response to the needs of managers to capture the uncertainty and turn it into
opportunity. It was not possible to identify trends in the approaches of the
international theory and the strategy of input modes; however, the contribution of this paper is focused on strengthening and
broadening the discussion on the use of an approach that provides for the
capture of uncertainty not held by other theories existing related to
international business. It is observed that no theory overlaps the other, but they complement each other: the approach of the product life cycle is
complemented by the approach of the resource-based view and dynamic
capabilities; the discussion is expanded with consideration of environmental
uncertainty captured by approach to real options theory that provides the
transformation of uncertainty into opportunity.