What does the stages model emphasize in the internationalisation of SMEs?

What does the stages model emphasize in the internationalisation of SMEs?

• A. Rapid scaling and growth
• B. A phased approach with increasing commitment
• C. The importance of networking
• D. Adapting to local regulations

Answer: (B)

The stages model emphasizes a phased approach with increasing commitment in the internationalisation of small and medium-sized enterprises (SMEs). This model suggests that SMEs typically progress through distinct stages as they expand into international markets. Initially, a firm may operate at a low level of international involvement, such as exporting a small volume of goods. As the firm gains experience and confidence, it may move on to more significant forms of international engagement, such as forming partnerships, undertaking joint ventures, or establishing wholly-owned subsidiaries. This step-by-step process allows SMEs to mitigate risks and gradually increase their investment and resources in foreign markets. By framing internationalisation as a series of stages, the model highlights that firms are not expected to jump into global markets all at once but rather to make incremental progress based on their capabilities, resources, and the external market environment. This understanding is critical for SMEs as it provides a pragmatic pathway for growth and helps avoid overwhelming challenges that can arise from sudden and aggressive global expansion.

The stages model emphasizes a phased approach with increasing commitment in the internationalisation of small and medium-sized enterprises (SMEs). This model suggests that SMEs typically progress through distinct stages as they expand into international markets.

Initially, a firm may operate at a low level of international involvement, such as exporting a small volume of goods. As the firm gains experience and confidence, it may move on to more significant forms of international engagement, such as forming partnerships, undertaking joint ventures, or establishing wholly-owned subsidiaries. This step-by-step process allows SMEs to mitigate risks and gradually increase their investment and resources in foreign markets.

By framing internationalisation as a series of stages, the model highlights that firms are not expected to jump into global markets all at once but rather to make incremental progress based on their capabilities, resources, and the external market environment. This understanding is critical for SMEs as it provides a pragmatic pathway for growth and helps avoid overwhelming challenges that can arise from sudden and aggressive global expansion.