" International Entrepreneurship 9 2. It gives time for the firm to first 2. It oversimplifies theseek its legitimacy and set its complexities of the process asfoundation before going global well as ignoring the impact of(Axinn and Matthyssens 2002).the exogenous variables (Fletcher 2004).ConclusionInternationalisation possesses significant advantages as well as challenges toentrepreneurial SMEs. It is considered as the process of bringing together resources andstrategies and adapting them to international environment. Among some of the advantagesinclude:Market diversification and internationalisation can be made effective through variousapproaches including the stage theory approach as well as the „born global? approach.Theincentive to venture into international markets through exportation and creation of subsidiarieshelps firms increase rents as well as increased access to technology with an ultimate goal ofremaining competitive.Different firms adopt different strategies to internationalise which include evolutionarystrategies as well as born staged strategies. The „born global? focuses on SMEs venturing intoglobal market from their conception to growth while the stage theory approach focuses on astaged model of both the product life cycle model and the Uppsala model. One of the advantagesof this approach is that it helps entrepreneurial SMEs to identify the loops within their productdesigns and evaluate them before they get to the international market. Further, it gives time forthe firm to first seek its legitimacy and set its foundation before going global. However, stagedmodel is considered to be too „deterministic? in nature since firms often skip stages of growth. ItInternational Entrepreneurship 10is also accused to oversimplifying the complexities of the process as well as ignoring the impactof the exogenous variables.Evolutionary strategy is therefore preferable used since it helps to diversify global marketsince it has the potential to reach a diverse audience although the challenges associated with thisinclude the time to create a foundation that can be unstable since the venture requires fast pacedmarket entry strategies.Question 2: The OECD suggests that SME’s have a tendency to move to markets that aregeographically or psychologically close to them. Again, using relevant illustrative examplefor each approach, address the following two questions:a) What are the advantages of this approach?b) What are challenges that are presented by moving to markets that are geographically orpsychologically distant and are these more of an issue for the service or the manufacturingsector? Over the years psychological and geographical distance has been used to explain anddescribe the international trade trajectory (Eriksson and Sharma 2000). It has been studied thatpolitical, environmental and cultural distance has been used to describe the concept ofpsychological distance (Johanson and Wiedersheim 1975). Distance has been used as a factor indetermining market information and knowhow.On sustaining internationalisation of SMEs, OECD claims that entrepreneurial SMEstend to focus on markets that are psychologically as well as geographically close to them. One ofthe studies of OECD-APEC that focus on „Removing Barriers to SME Access to InternationalMarkets? identifies various challenges and barriers of SMEs? internationalisation (Fliess andInternational Entrepreneurship 11Busquets 2006). Some of the identified challenges include SMEs? limitation of resources as wellas international information and contacts coupled with the lack of requisite managerialknowledge. The study further identified the external environmental factors that stimulate SMEsto internationalise with the inclusion of supply chain links, global trade infrastructuralimprovement, social ties as well as immigrants links.Firms therefore often tend to concentrateon domestic markets and maximise their inputs and outputs in an efficient environment ofknowledge management.Advantages of Domestic Marketing by SMEsDomestic marketing has been hailed due to its simplicity in market entry, lower financialrequirements as well as less information to entry compared to foreign market venture. Themarketing strategy offers a myriad of merits both to the owner/manager as well as to theemployees. One of the identified advantages of domestic marketing is the fact that workers caneasily communicate due to shared culture and language. Unlike the international markets wherethe management and the workers may be of different culture and speaking different language,domestic market offers entrepreneurial SMEs the opportunity to understand one another andaddress issues based on a common ground (Perry 1990). Another advantage of domestic marketing is the fact that it is easier for firms to predictconsumer preferences and to understand the market niche (Aaker, Kumar and Day 2008). This isbecause the market is narrow as well as easily accessible and hence, easy to gather marketinformation. The taxation of local and domestic SMEs is considered much lower than that of theforeign firms. In addition, local and domestic firms can benefit from tax cuts based on theemployability alongside the sustainability attainment level. International Entrepreneurship 12Since information about the local and domestic economy is easily accessible, it istherefore easy for SMEs to predict the economic downtowns and in turn, adjust their strategiesaccordingly to maintain their competitive advantage as well as bolster their market performance.Since a broad based market venture poses a huge challenge when it comes to management andglobal trend management, domestic marketing presents the advantage of efficiency andeffectiveness in resource mobilisation, market investment determination as well as quickconsumer preference responsive strategies to entrepreneurial SMEs. Challenges Posed by International MarketingAlthough OECD seeks to drive SMEs? focus on the global market, the current SMEs stillneed to confront the external marketing challenges. One of the challenges posed by marketingbeyond the SMEs? psychological and geographical locality is that it is an enormous task to buildpotential public relations in a new geographic area since it requires massive capital expenditureto create the necessary momentum as well as effective message localisation (Gillespie andHennessey 2010). Another challenge posed by SMEs during international marketing is theattainment of an effective leadership team with the required knowledge base for a specificgeographical market. This is because different locations require different approaches andstrategies under the type of management with attractive inter-cultural competence.Maintaining high ethical standards in foreign markets poses a great challenge since thereputation of the firm is at stake (Carasco and Singh 2003). A firm like Nike lost its glory indeveloping countries owing to their low wage policy to their workers in the developingcountries. The success and failure of a firm is linked to its ethical base, which can be easilyshuttered anytime. The ability to efficiently bring on board new regions to fit into the firms? "