ANALYZING FOREIGN-MARKET ENTRY STRATEGIES - EXTENDING THE INTERNALIZATION APPROACH

A new fully integrated analysis of the foreign market entry decision i s presented, encompassing the choice between exporting, licensing, joi nt venturing and wholly owned foreign investment. The choice between a cquisition and greenfield investment is examined, and so too are optio ns based on subcontracting and franchising. The model extends the insi ghts of-internalization theory, and draws on concepts from the economi cs of industrial organization. A special feature of the model is the d istinction between investment in production facilities and investment in distribution facilities - an important practical distinction that h as been overlooked in much of the international business literature. T he strength of competition from indigenous rivals is emphasized as a d eterminant of entry strategy into both production and distribution.