The 20th century is one of the most revolutionary periods in economic history as national economies around the world dramatically shifted and changed to cater to burgeoning demanding global markets. Barriers to cross-border trade and investment fell as businesses around the world capitalized on the opportunities posit by globalization. Globalization, although not a new phenomenon, has proliferate to the business world exceedingly well in the second half of the 20th century to drive economies to unprecedented levels. Globalization according to Hill (2003) "refers to the shift toward a more integrated and interdependent world economy. Globalization has two main components: globalization of markets and globalization of production." In the first context globalization of markets, refer to the historic merging of global marketplace as the fall of barriers to trade has made international selling and buying much easier.
[...] Conclusion Given the above discussion, it is clear that internationalization of SMEs differ from those of MNEs. MNEs are large corporations with plenty of resources, and scarcely depend on the government for incentives for participating in international trade. In fact most MNEs find better opportunities for development in international markets rather than in domestic ones. SMEs on the other hand are largely dependent on the government for developing the domestic market as well as the process for transforming from domestic to international organizations. [...]
[...] Nevertheless, SMEs are some of the most important sources of national income, which is why it is imperative that the sector is encouraged to participate in international market operation to reap its benefits in the long-term. Bibliography Albaum, G., Strandskov, J., Duerr, E. (2002), International Marketing and Export Management, Fourth edition, Harlow: Prentice Hall. Cavusgil, S. T., and Zou, S. (1994). Marketing Strategy Performance Relationship: An Investigation of the Empirical Link in Export Market Ventures, Journal of Marketing Vol 1-21. [...]
[...] Reuber and Fischer (1997) for example note that the top manager exposure to foreign markets help in establishing firm's internationalization behaviours at the operational level. For SMEs, knowledge of the international markets, its demand and environment create management awareness, which reflect on the process of internationalization (McDougall et al 1994). Exposure would extend foreign strategic partnership, exploration of international markets, pricing, marketing and product development strategies. It would also influence firms to take the initiatives in leading markets based on comparative competencies (Ghoshal 1987). b. [...]
[...] Liberal or restricting domestic policies therefore can promote or constrain, respectively, domestic SMEs from achieving the desired level of performance for internationalization (Stewart 1997). b. Import/ Export: The second aspect of internationalization of SMEs is the trade structure. Cavusgil and Zou (1994) for example identify basic company offerings; contractual link with foreign distributors/agents, export promotion and pricing consideration as some of the aspects for export performance of marketing strategy construct. To become competitive at the international level SMEs must comply with international standards and performance. [...]
[...] In this context, the researcher shall discuss how internationalization of SMEs could help boost international trade and investment in the following sections, emphasizing on the role of the government. Part 1 Methods to encourage both domestic SMEs to export and foreign SMEs to invest used by the government 1. Domestic SMEs: a. System of Government Domestic SMEs greatly rely on the organization of the government and the political structure therein. According to Cavusgil and Zou (1994) development of SMEs to the international level greatly depends on the internal environment and how it influences businesses. [...]
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