Uppsala Model and Introduction to Internationalization

662 Words3 Pages
The Uppsala Model
Internationalisation can be described as “the process of increasing involvement in international operations” (Welch & Luostarinen, 1988, p. 36).
At any rate, why a company should internationalize, and how?
The fundamental reason for exporting, in most firms, is to make money. However, as in most business activities, one factor alone rarely accounts for any given action. Usually a mixture of factors results in firms taking steps in a given direction. The table below provides an overview of the major internationalization motives. They are differentiated into proactive and reactive motives. Proactive motives represent stimuli to attempt strategy change, based on the firm’s interest in exploiting unique competences
…show more content…
There, they have enhanced knowledge of the market and more control of resources, thereafter gradually when the companies have become more experienced and acquired better resources, they expand to the more distance market. (By distance market, they refer both to the cultural distance; as well the differences in language, politics, geographical and the difficulty to acquire knowledge and information from the market) (Hollensen, Global Marketing, 2007, p.64). Secondly, most often companies entered a new market through export before establishment of foreign sales subsidiary or foreign production. The following table can clarify this concept: (Forsgren and Johanson, 1975)
In reference to the interdependence of market knowledge and market commitment the two Swedish professors developed a matrix model in order to show the positive correlation between market knowledge and the commitment decision. The core explanation of the model is that increased market knowledge will lead to increased market commitment, and vice versa. (Andersen,
Open Document