MERCANTILE DOCTRINE

This doctrine said that we should avoid import a lot because it will be very bad for our country.

THE WORD TRADE MEANS IMPORT AND EXPORT.

Protectionism was a policy by governments to restrict international trade so that the country
could increase the local industry.

They are different policies that governments can introduce to restrict international trade.

THEORY OF ABSOLUTE ADVANTAGE

PROTECTIONISM CONTRARIO A LIBERALISM

Beneficiarse de las ventajas de cada lugar. International trade can work properly if we focus in
what we are good at.

LOCATION THEORIES

PESTEL, political factors afectan como por ejemplo; Brexit.

PORTER´S DIAMOND MODEL- With the use of it, we can understand the country. Hablaremos
de cada uno;

-Production factor conditions; Consider if the workforce has the skills and knowledge
that I need, and we have to consider as well what we call it progressive factors. Check the
population because we as a company may need the help of other companies, so can I rely on
third companies in that market or not?

I should also take into account the resources that the country offers.

Infrastructure, for example the roads. Is the logistics possible or not?

-Home demand conditions; If my market is big, I have more opportunities to sell more.

TWO ADDITIONAL FACTORS

Any political decision, tsunamis..

INTERNATIONAL PRODUCT LIFE- CYCLE THEORY

This at the time was a theory of relevance.

UPPSALA MODEL

Most relevant theory nowadays. Internationalization is a matter of learning, internal resources

(am I capable to become international?), and an interplay between market knowledge and
market commitment.

Very important the short cultural distance. Ej; España y Portugal

If I go abroad, I must take into account how different we are. The language, the religion.. This
model says that depending on knowledge and commitment you decide if you export or you
invest directly.

NO EXPORT- INDIRECT EXPORT- DIRECT EXPORT- INTERNATIONAL CONTRACTS- FOREIGN

DIRECT INVESTMENT
At the beginning companies do not export, once they have good demand, they will start to
export INDIRECTLY, it means that I hire a third party so that this person will send to others, I
have no contact with the end consumer. Once this works, what if i do it on my own? DIRECT
EXPORT, when you are really good at that, international contracts, we can create franchising to
have even more presence in the market, and then we have the last step of internationalization,
which is foreign direct investment, you need a very well knowledge about the country you are
investing in.

The more commitment you have, the more control you have about the process.

4. The idea behind this figure is that depending on how you entry that country, you will have
more or less control and commitment.

I have to know my resources, what I capable of doing. My resources are related to my

commitment, and my commitment is related to the market entry mode that I choose.

I will do little investment if the country has a high risk.

I will be interested in good investments if the host market size is very good, big potential
markets can afford big investments. We can invest more depending on the familiarity; ej; con
Arabic countries between them se conocen más, pero por ejemplo nosotros tenemos menos
familiaridad con ellas. Of course, I will invest if the country risk is low.