Summary of Internationalization Theories (UPPSALA, Network Model & Born Global)

Main Ideas and Concepts

• Uppsala Model (Stage Model)

  Describes a gradual internationalization process for organizations.

  • Two key aspects:
    • Geographic diversification (starting with nearby markets).
    • Increasing market commitment (from sporadic exports to establishing subsidiaries).
  • Based on analysis of Swedish companies (e.g., Volvo, Atlas Copco).
  • Assumes firms grow domestically before expanding internationally.
  • Incremental decisions driven by a lack of knowledge and resources.
  • Four Stages of the Uppsala Model:
    • Step 1: No regular export activities; focus on the domestic market.
    • Step 2: Export via independent representatives; minimal investment and market testing.
    • Step 3: Establish a foreign sales subsidiary; direct sales and communication channels.
    • Step 4: Foreign production/manufacturing; deeper market integration and expansion.
• Network Model

  Focuses on internationalization through establishing relationships and networks.

  • Organizations form connections with independent actors in foreign markets.
  • Emphasizes the importance of social and industrial relationships among various market participants (customers, suppliers, competitors).
  • Strategic decisions depend on relationships and resources controlled by others.
  • Key features:
    • Firm behavior in the context of interorganizational relationships.
    • Long-term relationships are crucial for internationalization.
• Born Global Model

  Describes firms that internationalize from inception, viewing the world as a single market.

  • Characteristics of Born Global firms:
    • High activity in international markets shortly after founding.
    • Limited financial and tangible resources.
    • Strong international outlook and entrepreneurial orientation.
    • Emphasis on differentiation strategies and superior product quality.
    • Use of advanced information and communications technology for market segmentation.
    • Often expand internationally through exports and independent intermediaries.

Methodology and Instructions

• Entrepreneurs interested in internationalization should:
  • Develop a global mindset and understanding of international cultures.
  • Appreciate different beliefs, values, and business strategies across countries.
  • Maintain a focus on innovation and high-quality offerings.
  • Commit to corporate social responsibility.
  • Adapt strategies and products to fit different cultural contexts.

Speakers/Sources Featured

The video does not explicitly mention individual speakers but refers to concepts and models developed by various theorists and practitioners in the field of international business.

Notable Quotes

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Category

Educational

Video