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5. FDI are extremely high, activities are diversified and company is present on
all or in most of foreign markets.
New Scandinavian literature insists on fast learning process by improved
communication between branches in foreign markets, which needs network
organization (7, p.7).
Gradual internationalization has best use in case when it is expected that
foreign markets differ from host, but have some similarities. When company
decides to enter gradual internationalization, it is assumed that it knows only host
market, and that knowledge about foreign markets may be achieved anger research
which generates certain cost. When expected that research cost may be high,
gradual internationalization postpones entry on foreign market or it chooses "zero
strategy" of remaining on host market with licenses given t foreign companies.
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Globalization of activities
A concept of simultaneous internationalization or globalization of activities
implies that company enters all foreign markets at the same time. Globalization
model assumes that foreign markets are similar to host, and that eventual
differences are minor. This implies that experience on any single market may not
be used on the others, so there is no learning from experience and there is no
research cost. Simultaneous internationalization is preferred in cases when
company has know-how with certain level of protection (patents, licenses,
copyrights etc.). This know-how is subject to imitation and aging, so that
simultaneous entry facilitates use of monopolist’s advantage before it dissolves.
Globalization is a phenomenon of a new age (80’s of 20 th century). It is a
modern process which creates new conditions for international operations whereby
creating new distribution of work activities worldwide in which certain industries
and companies have their growth perspective only in global market. International
distribution of work activities in last two centuries differed in internationalization
of production, trade, distribution and consumption in globalization process. New
trends based on high technology and used not only on different levels of economic
activity from production to consumption, but also in IT which is not bound by
traditional barriers to trade. New information and know-how became most
important attribute of international competition and new basis for international
allocation of capital, financial and human resources.
Globalization process does not have the same meaning for all industries and
companies (8, p. 324). Among many factors which fostered globalization of
company activities, two are critical:
• product (technology)
• homogenization of consumer behavior