Evolution of Strategy in the

Internationalization Process
When one thinks of multinational enterprises, one often thinks of giant companies like IBM or
Nestle, which have sales and production facilities in scores of countries, but companies do not start
out giant entities, and few think globally at their inception. Therefore, as we discuss strategies
throughout this text, we shall note that companies are at different levels of internationalization and
that their current status affects the optimal strategic alternatives available to them. Although there are
variations in how international operations evolve, some overall patterns have been noted. Most of
these patterns relate to risk minimization behavior. In other words most companies view foreign
operations as being riskier than domestic ones because they must operate in environments, which are
less familiar to them. Thus, they initially undertake international activities reluctantly and follow
practices to minimize their risks. But as they learn more about foreign operations and experiences
success with them, they move to deeper foreign commitments that now seem less risky to them.