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l years for the firm to arrive at the last stage. The stage is closely related to the obtainment of information and resources of markets in India. Therefore, it would be advisable for Asiacom to establish sale agents or subsidiaries in the India markets at the beginning of its internalisation in the country.
The establishment chain has two states and two changes in it. The two states include market commitment and market knowledge. The market commitment has two elements: the amout of resources committed and the degree of commitment. It is believed that when there is a higher degree of commitment, the resources will be more integrated within the firm and their value will be created out of the integration. However, Johanson and Vahlne (1993) believed that a lowest resource may be committed by a firm to enter a new market. Higher resource commitment will take place with the high level of stages in the establishment chain. Therefore, as for Asiacom, it needs to commit a certain amount of resources and maintain a corresponding degree of commitment to the India markets according to the different stages in the establishment chain. The market knowledge can be used to make decisions on market commitment. It include general knowledge and market-specific knowledge. Only when Asiacom has possessed enough two kinds of knowledge, it can commit more resources to the new market and increase degree of commitment.
Two changes are current business activities and commitment decisions, which influence the two state aspects. To speed up the possession of market knowledge in India, Asiacom may employ personnel with experiences in investing and promoting in India markets and accordingly transfer the experiences to the company experiences. Moreover, the problems, opportunities, existing market risks and uncertainties in India market will affect Asiacom’s decisions to commit resources to the country.

3.2 Psychic distance

The firm needs to pay sufficient attention to psychic distance when conducting international production. Psychic distance patterns relate to language barriers, cultural, conventional and religious differences, ethics, political behaviors and so on. They are nearly completely different from those in home markets. These factors may constitute great barriers to the flow of information between Asiacom and India markets (Buckley & Ghauri, 1993). Therefore, it is necessary for Asiacom to carry out special research in India’s social and political systems, culture and religion. The firm has to avoid potential conflicts with the country’s culture and ethics in product publicity, naming and promotions. What is more, the language barriers have to be removed by engaging persons good at Hindi. This is a incremental process of learning.

3.3 Product diversification pattern

As far as the product diversification pattern is concerned, Asiacom shall also abide by the gradual strategy. At the initial investment in India markets, the firm lacks sufficient knowledge and information of customer needs and expectations as well as other aspects of the markets. It is appropriate for the firm to launch one specific product to the markets. Gradually, it may try to diversify its products when it has possessed more information of the markets. In this regard, the diversification of products arises from the deep understanding of local markets. Asiacom may imple