International Entrepreneurship

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The Uppsala
Model
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Summary
 I. Introduction

 II. Uppsala’s 4 steps

 III. Advantages of this model

 IV. Limitation of Uppsala model

 V. Some examples

 VI. Conclusion
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I. Introduction

 The Uppsala model was published in 1977 and explains the

Internationalization process of some companies

 It deals with “How the organization learns / Impact of these

learnings”

 This model defends that the internationalization process of

an organization is carried out by following 4 stages

 Following this model, the companies start their international

activities without taking a high risk and gradually start
taking more risky activities.
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II. The STEP 1 : No regular export

activities
Uppsala’s 4
steps
STEP 2 : Export via independent
representative

STEP 3: Establishment of a foreign

sales subsidiary.

STEP 4: Foreign
production/manufacturing
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III.
Advantages

It gives insight on the risks

It is a risk-averse method in the company’s
environment.

It is also a reliable method

to establish maximum
success on international
level for stable
companies.
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IV. Limitation

It doesn’t discuss the reason

The model does not show
behind foreign direct
much consideration to
investment and why should it
management incentive &
be a desire as the ultimate
decision making
market operation

The original model has look

at internationalization
process purely as an internal
capability and has ignored
external factors such as
market potential and
competitive forces
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z examples of
V. Some
Companies that used
the Uppsala model
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V.I Conclusion
 The model is too deterministic

 Does not take into account interdependencies between different

county markets

 Not valid for services industries

 Not valid in situations of highly internationalized (technology, emerging

economies such as Brazil, India and China), firms and industries

 The world has become more homogeneous: distance has decreased,

therefore the firms are willing to enter into larger markets.

 - Reduce uncertainty: buy knowledge about legal and financial

standards from international consulting firm.