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Transcript of Uppsala
Aston Business School
Nico, Kunle, Che, Rufus, Mashkur and Amina 29th November 2012 Overview History of UPPSALA Swedish researcher
University of UPPSALA 1977
Definition of UPPSALA Model Important Definition Definition of Internationalization
Example: An internationalized software program
The Liability of Foreigness
Example : Wal-Marts Failure in Germany How does Uppsala differ from 2 other models What are the Internationalization Models There are three models explaining Internationalization.
Transactional Cost Analysis
Business Networking Model Understanding Uppsala There are four aspects to understanding the Uppsala Model
Market Knowledge and decisions
Market Commitment Differences & Observations How does Uppsala differ from the 2 others.
Hofstede’s 1972 link to Uppsala 1977. Introduction the model
The new IPM
Conclusion Example IKEA The internationalisation establishment chain:
No regular export activities
Export via independent representatives
Establishment of a foreign sales subsidiary
Foreign production/ manufacturing units Example IKEA Following the concept of psychic distance:
1975 Australia Example IKEA Failure in Japan 1974-1986: “The Japanese market and consumers were not ready for Ikea,
and Ikea was definitely not ready for Japan at the time” (CEO Tommy Kullberg) “Outsider ship makes it impossible to develop a business” (Johanson & Vahlne) Example IKEA Success in Japan 2001-2006: “Japan is much more open, and we are much stronger company” (CEO Anders Dahlvig)
“Today is the right time to come to Japan” (CEO Anders Dahlvig) Limitations Inability to explain complex nature of firms
Nature of Firm Experience Experience as a problem
Not always necessary
Potentially hinder growth
Psychic Argument The Born Global approach ‘a business organization that, from inception,
seeks to derive significant competitive advantage from the use of resources
and the sale of outputs in multiple countries’ (Oviatt & McDougall, 1994) The Born Global approach Forsgren (2007) investigation
Fast and discontinous internationalization process
Level of Internet usage determined market choice Different routes to internationalization Joint Venture and Strategic Alliance Route (e.g. Ningbo Bird in China)
Acquisition Route (e.g. IBM’s personal computer business by Lenovo) The New IPM (2009) Why create a new version?
Economic and regulatory behaviour
Company behaviour is also different in some aspects
Research frontier has moved as well The New IPM (2009) Consists of two variables: State variables
Change variables State variables Recognition of opportunities to the knowledge concept Other importance concepts of knowledge include needs, strategies, capabilities etc Network position This variable was identified in the original model as “market commitment”
it is pursed within a network Change variables Learning, creating and trust building
Originally labelled as “current activities” Relationship committed decisions
Originally labelled as “committed decisions” References 36 Capell,K. (26.04.2006). Ikea’s New plan for Japan. Cited from (01.05.2009)
37 Lewis, E. (28.03.2005). Is Ikea for everyone? Cited from (10.05.2009)
“IKEA: The Japanese Misadventure and Successful Re-entry”,
The Uppsala internationalization process modell revisited: From liability of foreigness to liability of outsidership; Jan Johanson and Jan-Erik Vahlne 21st May 2009)
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Sullivan, D. and A. Bauerschmidt (1990) Incremental internationalization: A testof Johansonand Vahlne's thesis, Management International Review, Vol. 30, Issue 1, pp. 19-30. Conclusion