Internationalization Concept -The Uppsala Internationalization Model

Internationalization consists of standardized products or service through globally standardized marketing and production processes that target standardized customer needs. Internationalization can be described as the process of increasing involvement in international operations. Another definition denotes internationalization as the process of adapting firms’ operations (strategy, structure, resources, etc) to international environments. Both definitions emphasize the crucial fact that internationalization needs an overall support from the organisation as it is changing the environment to expand in various manners the process mostly consists of macro factors to evolve.

The Process of Internationalization

Internationalization fundamentally alters the price-setting strategies of domestic economic agents. This is true for agents operating in product markets, factor markets and financial markets.… Read the rest

External Environment Factors Causing Uncertainty in Organizations

Businesses are bound to encounter several forces whenever they are in operation. In some cases, these forces are over and above their control. In spite of this reality, there is no single business which can exist without going through the external environmental forces. It is therefore imperative for a business establishment to put into consideration all the possible external forces which may affect its operations either positively or negatively. In this regard, opportunities and threats are worth noting because they account for the external factors which would often affect a business environment. When the external factors are considered and concurrently compared with the internal factors, it will be possible for a business management to formulate the right policies of dealing with the inevitable external forces.… Read the rest

Concepts of Windows and Corridors for New Ventures

A window is time horizon during which opportunities exist before something else happens to eliminate them. A unique opportunity, once shown to produce wealth, will attract competitors, and if the business is easy to enter, the industry will become rapidly saturated. Bicycles did not become viable commercial products until people needed them as transportation. When that need occurred, hundreds of bicycle manufactures rushed to take advantage of the “window of opportunity.” Literally every successful product and service has had an optimal period of time for commercialization. Those introduced too early have usually failed, and those introduced too suffered from crowded markets.… Read the rest

Economic Impacts of Deficit Financing

Deficit financing can be regarded as a necessary evil which has to be tolerated, at least in the developing economies; only to the extent it can promote capital formation and economic development. This extent of tolerance is called the “safe limit of deficit financing”. This safe limit shows the amount of deficit financing that the economy can absorb and beyond which ‘inflationary forces’ may be set in motion.

The economic impacts of deficit financing are:

Deficit Financing and Price Level

There are two opinions regarding the effect of deficit financing on the price level especially in a developing country. According to one view, deficit financing need not be inflationary in character especially if it is used during the peace time.… Read the rest

Deficit Financing

Deficit financing is understood in different ways in different countries. It is understood as the excess of current expenditure over current revenue which is financed either through public borrowing or the creation of new money by the government. So the deficit budget is also called deficit financing in USA. But in India deficit financing is understood in a different way from deficit budget. While the former refers to a situation where the current expenditure exceeds current revenue of the government, the latter is taken to mean the excess of aggregate expenditure (both on current and capital accounts) over aggregate revenue.… Read the rest

Types of Economic Systems

It has been already pointed out that the way in which the three basic economic questions are answered depends on the economic system which functions in a country. To understand how these answers differ among the economic systems, we should understand the different types of economic systems.

Major Types of Economic Systems

Economic systems may broadly be classified into three categories: Capitalism, Socialism and Mixed economy. A number of other types also emerged but all of them came close to any one of the above three types of economic systems. Let us now discuss the features, strengths and weaknesses of each one of these economic systems.… Read the rest