Internationalization Strategies: A Theoretical Approach to the Input Mode Choices in the Foreign Market and the Inclusion of Real Options Modeling for Decision Making

This theoretical essay aims to present the main approaches to the strategic decisions of internationalization and enter a discussion on the inclusion of real options theory in decision making that involves the input mode choices in the international market. Multinationals are faced with the acting choices in international trade, foreign direct investment (FDI) and the contractual relationship. The relevance of this study is through the introduction of a discussion of the new approach (real options) to input mode setting in the international market. Therefore, we present the main approaches to international business theory as well as its extensions. The methodology was descriptive. The strategic decision to internationalization involving the choice of input mode is a special case of diversification strategies. Three approaches to strategic decisions on internationalisation have been identified: the product life cycle approach, vision-based on dynamic features and capabilities and approach of real options. The approach of real options is a response to the needs of managers to capture the uncertainty and turn it into opportunity. It was not possible to identify trends in the approaches of the international theory and the strategy of input modes; however, the contribution of this paper is focused on strengthening and broadening the discussion on the use of an approach that provides for the capture of uncertainty not held by other theories existing related to international business. It is observed that no theory overlaps the other, but they complement each other: the approach of the product life cycle is complemented by the approach of the resource-based view and dynamic capabilities; the discussion is expanded with consideration of environmental uncertainty captured by approach to real options theory that provides the transformation of uncertainty into opportunity.