Resource based theory of internationalisation - Theoretical evidence

Abstract

Internationalisation has become a prevalent area of concern for both academics and practitioners alike. Within the academic literature there are three models of internationalisation that continuously appear, these include the 'stages model' the `network model' and the 'born global model'. The question of strategic capabilities required to pursue these models are yet to be explored. Specifically focusing upon these three models of internationalisation, this review develops a theoretical rationale for the capabilities that will be needed for each internationalisation strategy. Utilising the resource based view (RBV) of the firm developed by Jay Barney (1991), this review has identified a number of resources and capabilities, which allow firms that follow these internationalisation paths to become and remain successful during this strategic shift. These resources must be 'valuable' to the firm, 'rare', 'hard to imitate by other firms and are also 'organised' if they are to provide a competitive advantage for the firm. The main argument presented is that there are important theoretical differences between the competitive resources and capabilities of firms appropriate to each internationalisation path. The stages model relies heavily upon the development of knowledge, and is optimised by a slow incremental commitment to psychically close markets. The network model stresses the importance of strategic partners and the development of relationships, and thus represents a core competitive advantage for these firms. Finally the born global firms rely heavily upon innovations to gain entry into the market, and once there ensure the maximum rent is gained by offering these innovative products to the international marketplace. The thesis that is argued has been developed from the academic literature that has been assessed on this topic, as the competitive resources and capabilities that firms possess will essentially dictate the model of internationalisation that is followed.