FREE ESSAY ON INTERNATIONALIZATION MODELS

INTERNATIONALIZATION MODELS

A- STAGES (UPPSALA) INTERNATIONALIZATION MODEL
The Model Characteristics: 1- the export development process has a sequential nature
-successive stages represent higher degrees of international involvement/commitment;
2- the process is a gradual acquisition, integration and use of knowledge about foreign
markets and operations; 3- the process is also one of organizational learning; 4- the
model is experience/knowledge-based - the more experience the firm gains in time, the
more it is prepared to commit itself to this market and to launch new activities; 5- from
this higher commitment the firm will gain experience/market knowledge; 6-
internationalization is a slow process, beginning with local representatives in
culturally close markets; 7- firms would enter new markets with successfully greater
psychic distance; 8- the concept of psychic distance -factors preventing or disturbing
the flow of information between firm and market, including factors such as differences in
- languages- cultures- political systems- educational levels- levels of industrial
development- tastes among consumers- values, behaviors, attitudes.
9- the main structure of the stages model: a) state/static aspects of
internationalization variables the market commitment and knowledge about foreign markets;
b) change aspects of internationalization variables decisions to commit resources and
current business performance. 10- the concept of market commitment is composed of two
factors: a) the amount of resources committed- the size of investment in marketing,
organization, personal, etc.; b) the degree of commitment - difficulty in finding an
alternative resources and transferring them to alternative uses. 11- international
activities require both a) general knowledge -can be transferred from one country to
another; b) market specific knowledge -gained mainly through experience in the market.
12- there is a direct relationship between market knowledge and market commitment - the
better the knowledge about the market, the more valuable the resources and the stronger
the commitment to the market (especially true for experiential knowledge). 13- additional
market commitment as a rule will be made in small incremental steps. 14- However the
exceptions are; - firms with large resources experience small consequences of their
commitments, and can take larger internationalization steps; - when market conditions are
stable and homogenous, relevant market knowledge ca