Global Market and Sales- The Uppsala Model of Internationalisation

Running head: GLOBAL MARKET AND SALES
GLOBAL MARKET AND SALES
Name of the Student
Name of the University
Author Note

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Introduction
The main aim of this paper will be to evaluate the Uppsala model of internationalisation
critically in relation to current expansion of international business and comparison with another
internationalisation model, which is the model of product life cycle. This essay will include the
main components of the Uppsala model along with its comparison with the product life cycle’s
model, and will analyse the relevancy of the Uppsala model in describing the nature of
internationalisation that is evident in the current market conditions, using examples to illustrate
the points. Critical evaluation and compare these two internationalisation theories. Theoretical
concepts will be applied in this paper, which will help to identify and discuss two suitable real-
life instances to illustrate both the theories on internationalization. At the end, a conclusion will
be drawn to assess whether Uppsala model is totally suitable in modern business environment or
not.
Uppsala Model of Internationalism
The Uppsala model, which gets its name from a business school of the city of Sweden,
can be regarded as the internationalization model that relies on wisdom and learning. It can also
be stated that the utilization of the gathered knowledge about important markets may not be vital
for the success of the internationalization if the conditions of the foreign market are homogenous
and stable. On the other hand, if the organizations are successful in gathering knowledge and
data on similar markets, it will require only one stage to enter related market places. There are
four stages on which the procedure of progressive internationalization is founded on. The stages
are foreign sales subsidiaries, export via independent representatives, production and
manufacturing units in global markets and sporadic export. The Uppsala model is also known by

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the name of progressive model and possess the power to explain how companies get success
while learning and gaining knowledge during their operations related to internationalization.
Market specific knowledge is assumed to be obtained mainly via market experience while
operations knowledge can be shifted from one country to another. Geographic diversification is
facilitated with the help of general knowledge that can be easily achieved. Although a slower
process, the knowledge acts as an impulse for the internationalization and helps in generating
business opportunities (Pyddoke–VTI 2017).
Advantages
The process is evolved as an interplay between the growth of knowledge regarding the
global operations and market and a growing resources commitment towards those markets. The
model possesses certain primary issues such as how the companies learn and in which ways are
their learning impacting the behaviour of investment. This Uppsala model focuses on the process
of showing the knowledge that is exercised by the organizations in order to influence the
investing behaviour of the people present in the market place across the world. Insufficient
knowledge possessed by the management of the business entities regarding performing their
businesses on fresh markets restricts the organizations to follow international commitments
through a gradual process. If the management is successful in gathering more knowledge about
the market places, less will be the risk and, the commitments done by them will be stronger,
manly in the foreign or international market places.
The identification of the target-market also plays an integral role in this Uppsala model of
internationalization. One organization which uses this model is NUMMI (New United Motor
Manufacturing Inc), which is regarded as the joint venture between Toyota and General Motors.
Toyota is benefitted from access to the US market, and on the other hand, General Motors is